As pandemic-induced e-commerce competition heats up, digitalization alone will not be enough to sustain a business. What else is needed?
Amid the furious pace of pandemic digital transformation, companies are now forced to adopt a digital approach, navigating through challenges they have never encountered before.
These include ensuring that their platforms load quickly when presenting large catalogs of products, and meeting the always-online demands of consumers that have grown accustomed to shopping at any time of the day.
Failing to meet these requirements could incur losses in not just customer spending and brand image, but also in search engine rankings, with some estimating that a six-hour downtime can impact rankings by 30% for up to 60 days.
To go beyond just existing digital platforms and truly flourish in the digital age, businesses cannot risk stagnating at the first stage of digitization. They need to look at future proofing themselves and building a sustainable digital payments business.
This can be achieved by adopting three strategies: reacting quickly to issues through close monitoring; being proactive in identifying points of weakness; and using data science and analytics to uncover future needs, vulnerabilities, and novel solutions.
Agility to meet customer expectations
Digital-first businesses need to keep a close eye on their operation using various tools and observability platforms. These often highlight critical digital metrics, shedding light on the average time a page takes to load, the rate at which customers leave websites without making a purchase, and most importantly, instances of an outage of a website and applications.
To illustrate this better, imagine a newly digitalized business as a freshly built dam.
To make sure that the structure continues to operate optimally, operators will constantly be on the lookout for even the smallest hairline cracks, swiftly patching those up before cause a catastrophe.
Similarly, merchants should keep their ears to the ground and be fully ready to respond with corrective actions.
Building reliability and resiliency
While keeping a keen eye on operations is vital, this reactive approach is unsustainable at scale, especially in the highly competitive and dynamic e-commerce landscape today.
Going beyond monitoring, leaders will have to weed out vulnerabilities early and combat them before they become a threat to business continuity.
Businesses need to proactively search for points of weakness and implement improvements or reinforcements in their systems, even when there are no obvious signs of a fault.
This precautionary posture is imperative to digital-first businesses as the goal is not to simply solve problems on hand, but to develop systemic solutions to issues that may plague your operations in the future.
One example of how merchants operating online can preemptively protect themselves is by adopting a multi-cloud infrastructure that can help introduce a form of redundancy into their operation strategy. This protects their websites and applications from going offline if any one provider experiences an outage; in turn ensuring continuous accessibility and high-quality customer experience.
A well-thought-out cloud strategy can also help digital-first businesses plan for future bandwidth demands. PayPal’s own studies have found that seasonal sales events featuring price discounts are continuing to grow even in the pandemic, led by key events such as Singles Day, Black Friday, and International Women’s Day.
By understanding this growing trend in consumer behavior, business owners can work with their cloud service providers to improve access to flexible capacity and handle traffic surges on the most crucial shopping days of the year without risking an outage.
Harnessing data for the future
Along the way, there are bound to be blind spots that will evade scrutiny, popping up unexpectedly down the road.
The use of advanced technologies like AI, ML and advanced analytics can be instrumental in preparing for and mitigating these risks. For instance, business owners can use operational data that they have accumulated over time to generate actionable insights, supporting them in strategic planning and the design of more efficient and sustainable operations.
Business owners can analyze e-commerce transaction data to detect transaction patterns and underlying trends in their customers’ spending. With these insights, they can roll out better time-based promotional campaigns, manage inventory according to demand forecasts, and personalize shopping to create more engaging customer experiences.
As the world continues battling the pandemic, businesses have to continue innovating, developing, and adopting appropriate strategies to stay ahead of the curve.
This is especially true for e-commerce merchants: close to nine in 10 shoppers we surveyed for our Borderless Commerce report expected their online spending to remain the same or increase in the coming year, signifying intense competition even after businesses have gone digital. It is by being responsive to threats early , proactively assessing the business to uncover vulnerabilities, and digging into data analytics to harness predictive prowess that digitized businesses can thrive in a digital first world.