September 1, 2010, 6:03 PM

Fundamental shifts are afoot in e-commerce technology, analyst says

Tech execs will need the CEO’s backing to keep up, says Brian Walker.

Don Davis

Editor in Chief

Lead Photo

Brian Walker, Analyst, Forrester Research

E-commerce no longer begins and ends with a company’s web site. The Internet enables consumers to interact with e-commerce companies in many ways—including mobile phones, social networks and in-store displays—and that transformation into what he calls the Splinternet requires significant new technology investments, says analyst Brian Walker of Forrester Research Inc.

“If the board and your CEO aren’t behind this, you will struggle,” Walker writes in a new report entitled, “What every exec needs to know about the future of e-commerce technology.” “The job is too big. You will need to evangelize the transformation and then willingly collaborate with others to drive the change through the company, including your team.”

Among the major changes Walker highlights are:

  • The Internet becoming a bigger part of consumers’ lives. By 2013, half of retail transactions will take place online or be influenced by what consumers see on the web. “Companies need to continue to shift spending to enable the online channels or risk losing their competitive position,” Walker says.
  • The web browser will be just one of many e-commerce touchpoints. Consumers will interact with retailers, manufacturers and distributors through mobile phones, tablet computers like Apple Inc.’s iPad, Internet-enabled store checkout systems and posters and catalogs with embedded tags that link to online content.
  • Many of these new touchpoints will be built with proprietary technology, such as that of the Apple iPhone and Google’s Android operating system, and more will emerge. “The future of the Splinternet is one where you must develop systems that can easily integrate and support these existing—and emerging—customer experiences in order to compete and capitalize on changing customer expectations,” Walker says.
  • Consumers expect consistent information, policies and fulfillment and service options across channels. “Companies at the forefront of enabling consistency and usability across touchpoints—such as Netflix, Amazon.com and Best Buy —are seeing benefits in customer satisfaction and loyalty,” he writes.
  • Supply chains will have to be strengthened as retailers sell through new online channels—such as Amazon.com’s marketplace or Apple’s iTunes for digital content—and rely increasingly on drop-shippers to expand selection. “Most retailers today don’t have the systems in place to manage this kind of multichannel selling and fulfillment model,” Walker says.

Walker encourages e-commerce companies to invest in flexible systems that can serve customers across channels; improve the way they develop and manage content, including how they obtain information from suppliers and share it with trading and channel partners; and to focus on understanding their customers by using tools such as personas and web analytics.

Unfortunately, he says, “organizations work against themselves much of the time when it comes to execution. Reporting structures, incentives and long-standing policies frequently get in the way of driving multichannel commerce and service.”

Companies need to adjust the way they operate and incent employees if they are to meet customers’ changing expectations. And that kind of transformation, Walker says, requires the buy-in of a company’s top management.

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