How to uncover digital commerce effectiveness

Uncovering digital commerce effectiveness

A couple of years ago, digital commerce promised to dominate the B2C and B2B markets. But that growth curve has stalled. Digital commerce was estimated to have leaped ahead by five years in the initial months of the pandemic.³During the April-June 2020 quarter, Walmart’s digital commerce sales grew 97% year-on-year (YoY).⁴ Amazon’s sales during the same period grew 40% YoY to $88.9 billion.⁵But as restrictions eased, consumers fell back into their old habits of going out, see products firsthand, and bring them home immediately. According to an IMF study across 47 countries from January 2018 to September 2021, the online share of total spending jumped from 10.3% in 2019 to 14.9% at the peak of the pandemic, but then fell to 12.2% in 2021.⁶ As of early 2022, the share of online spending across the countries in the IMF study was only 0.6 points higher than it would have been without the pandemic.Globally, companies struggle with geopolitical and supply chain issues, as well as economic slowdown and high inflation.⁷ Key priorities today are to cut costs, improve cart-to-order conversions, and reduce customer complaints.To uncover digital commerce best practise in these market conditions, the Infosys Knowledge Institute surveyed 2,500 businesses across 12 industries in 20 countries, with each company having revenues greater than $500 million (see Appendix A).

The research identified and assessed five key aspects of digital commerce platforms:

A commerce platform’s key digital capabilities relevant to customers of business-to-consumer (B2C), business-to-business (B2B), and business-to- business-to-consumer (B2B2C) companies.
The organizational structure, comprising the leadership and structure of roles across functions.
The underlying technology architecture, or the foundational structure, of a digital commerce platform.
The analytics use cases of digital commerce operations.
Other integrated business systems (such as inventory management, product information, customer information, pricing systems for improved transparency and flow of data within the organization.

The research asked each respondent to rate their performance over the past two years on 12 desired business outcomes. These outcomes covered customers, financials, strategy, and operations, and included outcomes like cost reduction, increasing customer retention, and improving app performance metrics.

Respondents were then assigned points based on their self-reported performance on these outcomes, and categorized as below into performance tiers based on their score:

Bottom tier = Performance score of less than 5

Middle tier = Performance score of 5 or 6

Top tier = Performance score of greater than 6

Finally, we used linear regression models to understand which digital commerce capabilities impacted performance scores or increased the likelihood of being in the top tier for performance.