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The (r)evolution from click-to-buy to experience-to-buy

Retail Trends – by Ward de Kruiff 

Digitization plays an important role in our lives. From both a business perspective and consumer point of view, we are part of an economy that is inextricably linked to countless mobile apps and where growth in streaming service offerings seems to have no measure.

While the impact of digitization on retail is significant, the path of digital transformation and innovation is often taken late. With the rise of e-commerce and mobile commerce, many companies over the last few decades, have been busy integrating e-commerce, only realizing at a later stage the importance of marketplaces such as Amazon, Ebay, Tmall and Bol.com as part of an omnichannel strategy. In 2022 and 2023, many companies have set a focus on direct-to-consumer market share growth as a key strategic objective. This is good, but perhaps somewhat late, when considering the evolution of retail commerce. Optimization of retail commerce, whether you label or prioritize it as e-, digital, unified, mobile or social commerce, is undergoing constant change.

In the age where we like, swipe, share and hashtag, the evolution of e-commerce has become an undeniable part of how we experience and consume. Over a 30-year period of e-commerce, two major factors are already contributing to how retail commerce is rapidly changing. On the one hand, the so-called digital natives and especially Gen-Z; the next generation consumer in the 10 to 26 age group. On the other hand, the speed at which we are constantly pushing technological boundaries. The latter leads not only to the evolution of the web as we know it today but also to the evolution of retail.

Social commerce, with a scale of €35 billion, is a good example of how relatively new channels such as Snapchat and TikTok are resulting in new business models around influencers and user-generated content, changing the shopping and consumption patterns of precisely the digital natives. It is therefore important to ask yourself the question – as a retailer, how high is social commerce on your agenda for 2023 and with what technology will you enable it?

With the gradual shift from the traditional web as we know it today to the decentralized eb, new opportunities arise for retailers. In addition, it also poses a threat if evolution is not recognized in time. After all, the next phase of the Internet is also the next phase for further digital transformation and innovation. With Web3, new economies are emerging, those of the creator and experience. With this, in a "cookie" free world, we move beyond targeting audiences on centralized platforms such as Meta and Google, and communities are built on their own, decentralized platforms.

This offers an opportunity to get very personal with the consumers who are part of a community. In time, when companies move in the direction of further digital transformation and innovation, marketing investments can be redeployed, new revenue categories/streams can be tapped, and, for example, with the savings on ad buys, loyalty can be transformed.

The evolution of retail is about blending and connecting our physical, digital and virtual worlds, both product, store and environment. It is about the evolution of content. From Web2 to Web3, from 2D to 3D. From digital to virtual. People will always remain central to this, with the right deployment and application of new technologies helping to ensure that we, and at least the next generation of consumers, will experience and consume everything differently. Especially when you consider that the economy for virtual goods is already close to 60 billion[1], twice the size of the music industry.

AI, AR, VR, gaming, edge computing, robotics and payment technologies are some of the many technologies that will impact the revolution of retail and business strategy. Specifically, these could be AR + AI platforms for virtual try-on of clothing and makeup, for example, a digital marketplace within the mobile eco-system, containing virtual goods, i.e., digital twins of physical products, optionally with smart contracts attached to these.

For example, with the help of the right technology partners, retailers can develop games with the application of new technologies, provide digital avatars not only with skins or 3D wearables but also with conversational AI, or develop photorealistic virtual people with real-time, live communication as an additional service - or information channel replacing the chatbot. Retailers can also transform loyalty programs with e.g., digital collectibles, realize loyalty token solutions for tokenized customer engagement or for controlled access or a slightly different design of customer journeys. 

With all these solutions and experiences with blend spaces, Web3, and metaverse, the (r)evolution of consumption, from click-to-buy to experience-to-buy has already started.

Learn more about how EPAM helps enterprises stay ahead of virtual experiences in retail: https://www.epam.com/our-work/media-entertainment-and-telecom/entering-the-metaverse

[1] The promise and peril of the metaverse, McKinsey, published March 29, 2022