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For years, e-commerce practitioners have obsessed over the idea of a slippery funnel, built to maximize retail metrics like conversion rate and average order value.

Today’s disruptive digital products and services are quickly making this way of monetizing things obsolete.

Every connected device or service that hits the market, from tablets and televisions to ad platforms and social networks, brings with it new opportunities for marketing and selling your company’s goods and services. But in many cases, blindly pursuing the traditional retail path of pushing customers through a “shopping experience” will only alienate them.

The most innovative marketers overturn this mindset as they search for new ways of generating revenue. Rather than seeking new channels in which to push old ways of selling, they are starting with new, disruptive product experiences first, and then working backwards from there to create custom buying mechanics that fit them like a glove.

Turning it upside-down

In this upside-down paradigm, maximizing the value of every transaction becomes less important than how good consumers feel about the overall experience of interacting with your brand over time. Great disruptive product experiences are so delightful, entertaining, or genuinely useful to people that they convert again and again almost automatically because a company’s buying mechanics are frictionless, timely, contextual, and everywhere.

To illustrate this at Elastic Path, we’ve abandoned traditional diagrams that show customer flows in a funnel or cycle because they don’t capture the nuances of how consumers actually engage with today’s spectrum of touchpoints. Instead, we map them onto a perpetual timelineDigital relationship map

In the era of disruptive digital commerce, there's less urgency to make big, quick conversions than there is in the retail model. The first actual buying event (in red) may not occur until well into the above conversation, but once it does, the quality and desirability of the experience itself stimulates a high level of purchasing and consumption. If you think about it, this more than anything else is a driving force behind the subscription economy that everyone’s talking about.

How do you move towards disruptive digital selling?

Monetize everywhere

The first trait of disruptive digital commerce is that monetization can happen anywhere. Not just on every device, but at any opportunity where a potential brand interaction might occur. This could mean a traditional website, or a mobile app, or a Facebook page, or deeply embedded inside someone else’s software product. What separates good monetization from bad, however, is how well you pull off the other three things.

Make it short and sweet

If you build it right, they will register. When a digital experience is truly delightful, entertaining ,or useful enough to customers, they will provide you with everything you need to create monetization mechanics that are so seamless, they’re almost invisible. As proven by Amazon’s 1-Click, Apple’s iTunes accounts, or Starbucks’ mobile payment app, having registrations and frictionless purchasing methods that do not involve shopping carts or lengthy, distracting checkouts are the keys to monetizing everywhere.

Be respectful of context

This is one of the most overlooked principles today. Nowhere is it more apparent than in the recent failures of high profile f-commerce storefronts. As Forrester Research analyst Sucharita Mulpuru noted, selling to consumers on Facebook is "like trying to sell stuff to people while they’re hanging out with their friends at the bar."

She’s partially right in that buying won’t happen if you simply impose a retail experience on consumers who are busy doing something else. But when mechanics are kept short, sweet, and respectful of what people are trying to accomplish at a given point in time, the results can be astonishing. Just ask one of the millions of folks who have ever purchased a Mighty Eagle in Angry Birds, paid for a venti caramel latte with their smartphone, or rented a movie from the iTunes Store.

Present a unified front

Big players like Apple, Netflix, and Facebook, with their massive user bases and cross-platform clout, have spoiled consumers into thinking that it’s easy for us to be consistent across touchpoints. Regardless of how you interact with them, these companies have the wherewithal to offer you with a single, consistent view of your entire relationship with them. People see their Facebook accounts or Spotify subscriptions as things that exist outside the limits of any one device, and they love it.

Unfortunately for us, this can be tough to emulate because of limitations in current e-commerce software, as well as the walled gardens of those same big players that make it hard for everyone else to consolidate a single view of their customers across incompatible platforms. 

The technology that makes it happen

Luckily, there are solutions emerging to help companies of all sizes meet this challenge. While some of the capabilities needed to conduct this kind of commerce may already been in your stable, several stand out as newly emerging functional areas that will become critical in the months and years to come:

  • Truly smart and agile APIs. Not just programming interfaces that expose basic e-commerce services, but intelligent middleware layers that make it dead simple for internal teams, digital marketing agencies, contractors, or anyone else to “plug in” and embed core merchandising, monetization, account, and ownership functionality into anything and everything.
  • Entitlements. Systems and processes that dictate what a given user has the right to do, and when, where, and for how long. As digital relationships between brands and their customers grow in complexity and duration, the ability to manage them properly will become a key asset.
  • Relationship-based analytics. As the metrics that matter evolve from being transaction-focused (traffic, conversion rates, average order value) to relationship-based (engagement, average revenue per user, customer lifetime value), so too must the intelligence tools that companies need to make sense of this data.

I’ll be exploring these themes a little further in future posts. But for now, keep these things in mind when you plan out the future of your online business. As the tidal wave of digital disruption continues, they’ll only grow in importance.

David Chiu

Published 8 March, 2012 by David Chiu

David Chiu is the digital commerce strategist at Elastic Path and a contributor to Econsultancy.

4 more posts from this author

Comments (2)

Helen Trendell

Helen Trendell, Managing Director at ThoughtShift

Great post David on the change needed to get the most from digital. Your point about the change needed in metrics is key. Measuring the value of your digital marketing by only looking at transactions in silos, is only telling a fraction of the story. Online businesses need insights from across their data that show the full spectrum of contributions from across every different touch point and over time. I think once more businesses adopt this analytical approach, this will unlock the insights needed to create a stampede for new monetization models and technologies. I look forward to your next posts.

about 4 years ago

David Chiu

David Chiu, Digital Commerce Strategist at Elastic Path Software

Thanks Helen. You'll find the pioneers of these analytics in the social networking, gaming, and telecommunications verticals. These are the folks that already obsess over things like minutes of engagement, activity and response levels, and lifetime value, and they are on the right track.

about 4 years ago

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