A new global survey finds that customer loyalty actually drops when brands are slow to innovate, with millennials and Gen Z leading the migration away from those retailers.
The 2022 Commerce Innovation Report, from commercetools, also found that lack of commerce innovation negatively impacts customer experience and sales, and close to three-quarters of business decision-makers recognize that failure to adopt emerging commerce solutions will hurt their business.
“With endless options and the power of the internet at their fingertips, consumers are continuously redefining what the ideal customer experience looks like. The brands with longevity are the ones that are taking this shift into account from both a technological and cultural perspective, and are evolving to meet customer demands,” said Jen Jones, Chief Marketing Officer of commercetools, in a news release.
“Change is constant in the modern commerce ecosystem. Brands need to be nimble and meet customers where they are. This means having a finger on the pulse of their customers’ shopping behaviors and adopting the commerce experiences that resonate the best among them. Anyone who thinks they can sit still and not evolve amid changing demands will be out of business shortly.”
Key highlights from the report, which surveyed 300 global retail leaders, include:
- 73 per cent of shoppers will take their business elsewhere if a brand’s commerce experience does not meet their expectations, and over half prefer modern commerce experiences, defined by evolving customer preferences, payment options, and digital devices;
- 45 per cent of respondents say they only dedicate a minimum amount of their budget to improving or expanding commerce capabilities;
- 74 per cent recognize that failure to adopt emerging commerce solutions will negatively impact areas of the business;
- 40 per cent of respondents say their company’s current commerce solutions hinder the sale of their products or services, and 49 per cent of this group feel this issue has existed for over a year;
- Over one-third of businesses are struggling with the ramifications of an outdated commerce solution, signifying the impact a lack of innovation has on customer experience, sales, and brand loyalty;
- 52 per cent said they’ve decided not to implement a new commerce capability due to budgetary constraints.
The inventor of headless commerce, commercetools describes itself as an innovative technology disruptor that has established itself as an industry-leading e-commerce software provider. It is based in Munich, Germany with offices in Europe, Asia, and the United States.
“Businesses are beginning to understand that if they do not jump on trends and adopt the technology that enables them to provide these next-generation experiences at every touchpoint, then it will be impossible to remain competitive in today’s market,” said the company.
The report also found:
- 70 per cent said they’re most concerned about millennials, a cohort with over $2.5 trillion in spending power, taking their business elsewhere, followed by Gen Z (54 per cent) and Gen X (48 per cent);
- Only 25 per cent of respondent organizations offer next-day shipping, and even less offer loyalty programs (21 per cent);
- Despite customers expressing interest in a variety of payment options, less than half offer multiple payment methods, and less than 20 per cent of respondents offer one-click checkout (18 per cent), and even fewer (16 per cent) offer Buy Now Pay Later and cashback (14 per cent.)
“Sephora pioneered prestige omni-retail, and we know that continued investment in commerce innovation is key to our sustained growth,” said Sree Sreedhararaj, Chief Technology Officer at Sephora, in a statement.
The report said companies’ adoption of modern commerce features and digital purchase options lags behind what’s possible, and also what’s hoped for.
“Some decision-makers are excited to test new capabilities like purchasing in the metaverse or jumping on trends like NFTs. But Naysayers clearly exist among us — a vocal minority who don’t think their companies need to expand digital purchasing options or commerce features at all. We know they’re there, as loud and skeptical as ever. Whether you feel up to speed or behind the times, there’s no room in your organization for technologies that hold back your team and business,” it said.