Optimisation vs. innovation in digital commerce

Paul Lynch at LiveArea, a Merkle company explores the differences between innovation and optimisation and argues that both are essential for success in eCommerce

The pandemic taught businesses nationwide that being able to pivot and adapt to changes is crucial for survival. Brands like Topshop and Debenhams who were too slow to adapt learnt this the hard way. As a result, three-quarters of businesses made innovation a top-three priority this year.

Last year drove huge amounts of innovation out of necessity. Continued lockdowns forced stores to shut, and companies had to quickly adapt to survive. Businesses are only afforded a brief window to keep pace with innovation. Once the early adopters nail the process, others begin to provide similar services – and it naturally becomes an industry standard.

Thankfully, there is still much to be done following on from the initial innovation. Once the technology matures, companies can put their creative spin on it, and optimise processes over time.

However, it’s difficult to decipher who is bringing completely fresh ideas to market and who is adopting and optimising them for their customers. Commerce is a fast-paced industry and the distinction between innovation and optimisation is not always completely clear.

Different paths to the same destinations

The drivers behind optimisation and innovation are the same: you want happy customers, happy co-workers, and a better bottom line.

Tapping into the wisdom of the crowd and making continuous, small optimisations is the sure-fire way to please many of your customers. From convenience to community, a solid feedback loop keeps a finger on the pulse of changing customer expectations.

Innovation offers customers the unexpected. It brings radically new experiences that may only impact a small group of customers at first, but if done correctly that group will grow often through word of mouth alone.

There’s more certainty in optimisation, as you’re fine-tuning something that is already working with your customer or proven in your industry. Tools to measure these efforts are usually more mature, making it easier to validate your work and secure a budget.

With innovation, you’re hoping that one of the 15 experiments you run pays off. This typically means working with leaner tools that let you get prototypes up and running quickly and then making larger investments to scale. Optimisation comes after the prototype has proven itself.

There’s also a lot of gratification in seeing your well-oiled machine steadily become more efficient. With nearly unending possibilities to automate and tweak the system, optimisation is a playground for data lovers.

Innovation, being more driven by gut feeling, is likely going to draw more emotional investment. This is important because if you’re doing something brand new, you’re going to have to be able to advocate for it and get others on board and excited.

The double duty of eCommerce teams

While innovation and optimisation can happen in any area of commerce, they have more recently been most associated with the digital side of business. As a result, many eCommerce teams find themselves in a hybrid position.

The digital commerce department has the most detailed view of the customer, with insights into purchasing behaviour and engagement trends that offer a wealth of opportunities for optimisation. At the same time, it’s often the department with the most access to cutting-edge tools and technologies, which sets the stage for innovation.

Ecommerce teams need to be at the forefront of change, urging wider teams to innovate and optimise to provide the best service possible to customers. 

New experiences in demand

There is a huge demand for new digital experiences. According to Mckinsey, at least 80% of customers’ interactions are now digital in nature. Retailers need to cater for the ongoing demand that is digital, especially as customer expectations remain high.

Relatively small eCommerce teams have huge jobs to fill when they need to provide new channels, personalisation, rich product information, multiple payment methods, a widening range of shipping and return options, 24/7 support, and a seamless experience that connects it all.

But to do all this successfully, teams need to be using up-to-date technology catered for the new eCommerce expectations and not ones that were built half a decade ago.

It’s why innovation and optimisation go hand-in-hand and are crucial for success.

Paul Lynch, Vice President and General Manager at LiveArea, a Merkle Company, EMEA.

Main image courtesy of iStockPhoto.com

© Business Reporter 2021

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