The health crisis of 2020 has caused consumption habits to evolve at lightning speed. Physical stores have gradually given way to e-commerce platforms, more competitive, faster, with a customer experience increasingly in line with consumer needs. This is the advent of phygital.
A decline in technological investment
Before 2021, technological investment in e-commerce was booming, due to the growing importance of the digitalization of businesses and online consumption patterns. For two years, after the boom linked to Covid, investments have been reduced, due in particular to the international context and the amortization of investments which were necessary to confront the health crisis, but also to regulatory challenges or even technological developments which shift the emphasis towards other segments, such as artificial intelligence.
Added to this, the economic crisis, with consumers spending less since then, or differently. The latter are moving towards more financially affordable models, such as Lidl, the discount leader, which recently launched its e-commerce site for non-food products, but also the explosion of second-hand goods.
Brands then find themselves obliged to rethink their e-commerce model as well as their investments.
The birth of a new form of commerce without limits
Companies are revolutionizing their approach. To survive and adapt, they are looking for a modular solution that unlocks creativity for superior shopping experiences. Brands now can and should reduce costs and accelerate implementation with this flexibility. With this in mind, they are turning to composable commerce to build agile sites, integrating real-time innovations to meet consumer expectations and anticipate future needs.
Take the example of Danone, which needed to create an e-commerce solution to deal with the shortage of formula milk. With the right tools, Danone was able to create personalized online experiences for consumers across multiple markets in a matter of weeks. The company has therefore added rules to limit the number of units purchased, to ensure that the shortage in stores does not occur online.
A similar setup was implemented in markets severely affected by Covid-19, with the addition of a shopping cart function on brand websites. These features helped consumers access nutritional products they couldn’t find in stores.
Flexibility, agility and scalability
The profitability of an investment in e-commerce is then based on three pillars: flexibility, agility and scalability. Flexibility involves quickly adapting to market changes, facilitating the customization of site appearance and functionality, as well as the integration of new technologies. Agility allows you to seize opportunities and challenges by making informed decisions, experimenting with new ideas while maintaining operational stability and analyzing in real time to adjust strategies. Finally, scalability ensures consistent performance in the face of growth by adapting technical infrastructures, all thanks to cloud, caching and optimization technologies.
These features provide the ability to quickly adapt to market fluctuations, effectively manage growth and create a remarkable customer experience. Brands that adopt the approach to composability have every interest in leveraging this technology to get the most out of it. The 2022 Gartner CIO and IT Manager Study highlights that only 6% of companies have high business composability.
However, of these, 63% outperformed their peers and competitors in terms of overall performance, compared to 42% of moderate composability companies and 19% of low composability companies. Once a brand has invested in establishing a solid composable foundation, it makes sense to apply the same principles and technologies across the entire organization. This approach makes it possible to achieve a high level of commercial composability and to constantly stand out from competitors.