The pandemic has changed the nature of retail and it has been difficult for companies to keep up with the pace of change in the wake of increased technology applications that are taking over our lives in so many different ways, literally.
While some businesses have kickstarted their digital transformation journey, others struggle to stay relevant in the market. Even those who have taken their first steps to go digital remain unsure of what comes next.
Platformification, or so-called “one-stop shop”, is a plug and play business model based on an ecosystem that draws businesses together to create solutions for the end-user via a secure platform. Although not a new phenomenon, this term is most commonly applied in the fintech world where traditional banks remain the core for financial services but utilise a fintech platform to offer other banking services.
In e-commerce, the end-users are merchants and choosing the right business partner that can provide you with an all-in-one platform for you to increase sales and grow your online business will put you in a much better position to compete in today’s digital landscape.
Finding the right business model
People often talk about the customer experience, but I’m here to talk about merchant experience and how this plays a role in the quality of interaction between the two. To stay connected with their customers in the wake of the pandemic, many brick-and-mortar stores and smaller businesses have been left with no other choice but to join the e-commerce market through online and social platforms.
For merchants looking for multiple revenue streams and exploring the market potential, they rely more on online and mobile applications that can help them transform by automating their processes and giving them a comprehensive view of their local customers.
According to an E-commerce Landscape Statistics Report (2021), e-commerce platforms in Singapore grew throughout the first 6 months of the pandemic. In Singapore alone, over 3 million people shopped in the e-commerce market this year, expecting revenue to grow at a compound annual growth rate of 9.9% between 2021 and 2025.
With the rise in e-commerce, businesses need to start thinking about how they can stay competitive in the market, and one way is to adopt the business platform model.
Unlike traditional linear business models, the platform business model aims to create and facilitate the means of connection. The seemingly new concept long existed before technology came about. One example is traditional shopping malls which used the brick-and-mortar method to enable interactions and facilitate exchanges between buyers and sellers. The only difference is that platforms are now supported by digital technology more than ever before. However, it is important to note that technology is only an enabler and using technology does not necessarily make businesses a platform.
An e-commerce enabler should embed themselves in the user experience journey and understand how adopting a platform business model makes things easier and cost-convenient for businesses. This will create opportunities for merchants to focus entirely on selling their product, instead of having to worry about maintaining and running their own core infrastructure. It should provide businesses with the connections they need to start strongly and flourish in this space.
For example, many of the SMEs we work with do not have economies of scale when talking to delivery partners or payment providers. They will never get the best rates; with off-the-shelf services, they are paying a premium. We see this challenge they face as an opportunity to negotiate really good rates with third-party logistics and payments partners, bring down costs and pass the savings on to SMEs who need it the most.
Making better data-informed decisions
Rather than relying solely on intuition and experience, merchants are highly encouraged to make business decisions based on their own data. With the platform model, merchants can easily track their data to form strong growth strategies powered by analytics. They can export their customer information, order history and product transactions into fully-fledged reports to help them sell better in the long run.
Additionally, to cater to the less tech-savvy, the platform model runs with a user-friendly interface design that is organised and easy to learn with straightforward commands, meaning it can lead to alleviation of cost and reduction of manpower in the long run.
Apart from the convenience that an all-in-one dashboard provides, merchants have the autonomy to decide which aspect of digital commerce they would like to focus on, such as social commerce, which is considered the future of e-commerce. For example, merchants can create personalized live streams that can be synced with Facebook Live posts, greatly increasing audience interaction and enhancing product exposure.
However, with technology advancing exponentially, it has become increasingly impossible to keep up without support from others. The lack of confidence to keep up with the pace of digitalisation trends is why some businesses find it challenging to switch to a platform model. Or they could just be too comfortable with their existing business model that they are not willing to take any risks.
Taking the first step of your digital journey
For many businesses, going digital for the first time may appear daunting. Retailers need to anticipate the scale of the challenge that comes with the adoption of collaborative platforms and recognize the ease that it comes with instead of running everything in-house. People often say, “when in doubt, just ask”. Those who are afraid of taking the first step should look at the vast amount of resources on the Internet, from local help desks and merchant success stories to online tutorials.
I find the easiest way to get answers to your questions is to simply reach out to e-commerce platforms’ customer support desk since they are the experts when it comes to providing answers based on merchants’ needs and guides them from setup to maintenance and growth.
Having worked with many local retailers, one thing I noticed in common after learning about their intention to go digital was that many are still unaware of how multiple channels can be integrated and managed concurrently. Because they are not able to understand how this could work, many retailers often find themselves torn between setting up an online store, opening a store on a marketplace, and creating a social media account to sell their products via live-streaming – when they could be easily doing all at the same time.
Another common misconception is that digital transformation brings about guaranteed revenue and profitability. Many merchants fail to invest in advertising and marketing but expect new customers to flow in upon establishing their digital presence. All investments do come with a certain level of responsibility and I find the most versatile merchants are those who are willing to allocate part of their budget to digital marketing like social media advertisements. To remain competitive in the market, it is prudent for merchants to monitor consumer data as a means of predicting and managing inventory and constantly look into fresh approaches when putting out new products.
To put it simply, the platform model can certainly help merchants by simplifying operations and giving them easy access to the things they need through an integrated framework. But of course, work is still required on their end to ensure success. The main objective for platformification is to maximise merchant experiences and improve all the behind-the-scenes solutions for them to smoothly conduct their business. With a more proactive and progressive digital transformation approach, businesses choosing this model will be able to enjoy the unified retail experiences they need across all channels.