The rapid expansion of digital sales has had a significant impact on the transformation of customer behavior in recent years. Digital sales are growing around the world across all industries, and its total value was estimated to reach as high as $4.3 trillion during 2021. According to the Digital Economy Indexin by Adobe Analytics, growth in Q1 was up as much as by 39% compared to the previous year. In this article, I want to highlight a few points that you should focus on when developing your company’s data driven digital sales.
Did you know? We hosted an online event (in Finnish) on the theme in March 2022. To view the recording, klick to: Data Driven Digital Sales Forum – Growth Platforms.
More and more brands are looking to serve end customers directly through digital sales, challenging traditional, multi-tier distribution channels. In addition to companies' own online stores, global marketplaces such as Amazon have created a highly attractive and efficient alternative route for companies looking to enter international markets. At the same time, the digital transformation of commerce has given consumers virtually unlimited options to choose from and huge amounts of information about the products and prices of different suppliers and the experiences of other consumers.
While the global pandemic has accelerated the growth of digital commerce, it has also increased consumer awareness of sustainable development. Consumers who shop online increasingly prefer more sustainable and environmentally friendly products. They are also willing to compromise on their own comfort, for example by recycling packaging materials and settling for longer delivery times. Besides environmental impacts, consumers have begun to pay attention to social sustainability and transparency throughout the supply chain.
Data driven digital sales
Data driven digital sales are a natural next step in the digital revolution of commerce. It means turning industrial age thinking on its head and shifting focus to the customer's experience rather than the company's internal processes and characteristics of individual products. This transformation requires a comprehensive redesign of commercial capabilities.
Development must begin by deepening customer insight, creating genuine added value and reducing the friction experienced by the customer. Managing sales is truly possible only on the basis of measured data. For this reason, data should be collected from all interactions along the customer’s path, from a potential new customer to an established customer committed to the company's products and service. Knowledge-based management requires taking down systemic and organizational silos and creating a digital architecture and operating model that covers all of the company’s functions.
More added value + less friction = better customer experience
For years, many companies have developed their business models from a product-oriented approach towards services and business solutions. Today, almost any product is available as a service, often for a fixed monthly fee. This development is driven by the simple desire to reduce the friction experienced by customers in their path to purchase. Friction is also reduced by expanding digital sales channels into marketplaces that bring together an increasingly wide range of products and services under the umbrella of a single digital experience, making it easier to choose and purchase products.
Commercial capability can be seen as a network of people, processes, systems and data that is linked to nearly all key functions of the company – from sourcing to supply chain management, sales, marketing and customer service. In order to optimize overall commercial capability, data must be unshackled from its system silos. Comprehensive data management requires a company-wide digital service architecture.
Break down organizational silos
In the Industrial Age, highly specialized and hierarchical organizational models were seen the most effective way to organize work. Today, the value created by companies is increasingly in an intangible form and achieved through cooperation between the company’s various functions, often across organizational boundaries. For this reason, besides system silos, it is important to break down silos between functions and create the structures for more multidisciplinary cooperation.
What is the trend in digital sales? I would argue that the overarching trend is for digital sales to be seen as an overall capability of the organization that must be approached in a multidisciplinary way and whose development must be on the agenda of every successful company.
Finally, I want to mention two useful resources for developing your company’s digital sales:
- Vincit's Trend Analysis 2022
- Data Driven Digital Sales Forum – Kasvun alustat - view the recording of our virtual event (in Finnish)
This article was originally published in our Trend Analysis for 2022. In the review, you'll find Vincit's three tips for data driven digital sales and additional reading on the themes.
Did you enjoy this article?
Give us a clap!