Contextualized E-Commerce: The key to an optimized e-commerce channel.

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1 Business Solutions Guide: contextualized e-commerce Contextualized E-Commerce: The key to an optimized e-commerce channel CoreMedia Business Solutions Guides are intended for operational decision makers that seek to enhance productivity, improve customer experience and drive new revenues. This guide focuses on how a consistent, contextualized approach to online engagement for both businesses and consumers can positively impact the e-commerce experience at critical points in the buying cycle, including: The Contextual Journey Context redefines consumer expectations Managing the entire consumer lifecycle Contextual e-commerce application scenarios Contextual e-commerce requires an integrated approach An integrated approach to contextual e-commerce CoreMedia and SAP : showcasing contextualized e-commerce

2 The Contextual Journey Today s online customers are empowered like never before, engaging with organizations across a range of touchpoints and enjoying the benefits that come from greater price transparency, increased access to information, and personalized content from their social networks and online communities. E-commerce growth shows no signs of slowing despite the current financial downturn. According to emarketer forecasts, retail e-commerce in the U.S. is set to grow by 43.4 percent by 2015, with three out of every four of those who go online in the U.S. actively making purchases on the Web 1. It s clearly not just a U.S. phenomenon either, with the Chinese e-commerce market set to be worth $311 billion by However, to be competitive on the Web and to optimize the conversion of online engagements into profitable interactions organizations need to integrate contextually aware applications into their online engagement strategies. These applications must address factors such as mobility, social networking and location awareness. Adapting the customer experience to the customer s needs and situation the essence of contextualization is proving to be a critical element of any successful customer engagement approach. In this paper we will show how a consistent, contextualized approach to online engagement for both businesses and consumers can positively impact the e-commerce experience at critical points in the buying cycle. We ll also examine how organizations can integrate contextualization into their broader Customer Experience Management (CXM) approach to create a self-reinforcing feedback loop that delivers support at every stage of what Forrester Research describes as the journey towards user context 3. 2

3 Context redefines consumer expectations With the continued growth of online retail activity, there s a growing recognition that the e-commerce experience has evolved away from the basic transactional interactions that were typically conducted from PCs via Web browsers. Mobile commerce is the most significant factor in this transformation. A recent report by ABI Research reported that mobile shopping will reach $163 billion worldwide by 2015, representing 12 percent of all global e-commerce turnover 4. This is a fundamental shift in consumer behavior that is dramatically changing the way organizations need to approach their customer relationships. The increasing connection between mobile phones and social networks also presents challenges for organizations. According to Citi Investment Research, Facebook now accounts for 14 percent of time spent online in the U.S. that s up from 8 percent just a year ago 5. And people are increasingly using their smartphones to access their social networks. ABI Research estimates that the number of users accessing social networks from mobile devices will exceed 550 million in 2011, and the figure will more than triple to over 1.7 billion by the end of In addition to mobile and social growth, we re also seeing a growing interest in location-based data, which enables organizations to respond to consumer based on where a customer actually is, right now. Services such as Tripit and FourSquare can now offer whole new levels of contextual data that organizations can factor into their customer engagement activities. And this is only the beginning. By 2015, a combination of emerging technologies and services including augmented reality browsers, new display technologies, enterprise applications, devices, content management and service providers will lay the groundwork for enterprises to completely redefine end-user expectations at every stage of the e-commerce lifecycle. The opportunity for organizations that are prepared to take advantage of these advances is enormous. The Gartner Group predicts that the global net economic effect of context-aware computing will exceed $140 billion per year by In order to manage these evolving expectations and remain competitive, organizations must be able to manage and deliver targeted content experiences, along with contextually relevant e-commerce opportunities to any consumer touchpoint on any network-enabled device. 3

4 Managing the entire consumer lifecycle In identifying the role of contextualized solutions across the consumer lifecycle, it s important to understand the scale of the challenge. While contextual e-commerce can clearly be applied to streamline specific stages of the buying cycle, the longerterm winners will be those organizations that move more quickly to integrate and apply this approach across the entire lifecycle. Consumers are increasingly comfortable with multichannel engagement. They may discover a product or solution after being targeted by an campaign, then go online to check online reviews and feedback, before discussing the offer with their friends on Facebook. When they are ready to buy, they might make the purchase on their mobile device, but opt to collect their order from a retail outlet. Whether the customer engages at the point of sale, via their mobile, by contacting a call centre, on a website, by using a kiosk, via or through one of their social networks, the experience has to be seamless across multiple channels. Contextual e-commerce application scenarios With continued growth of online retail spending, the e-commerce experience has quickly evolved beyond simply transacting; consumers are increasingly going online at every stage of the e-commerce lifecycle to discover new products, conduct research and make price comparisons, as well as to exchange feedback with friends and peers. This extended online presence creates an ideal opportunity for retailers to forge deeper, stickier and more profitable relationships with their customers. However this will require a more comprehensive and context-aware e-commerce platform that can support multiple Web channel processes while dynamically personalizing each customer s online experience. Advanced organizations will quickly identify contextual opportunities across the customer buying cycle from initial product discovery to ongoing support and upsell. Possible contextual e-commerce applications include: J JTargeted e-commerce opportunities based on CRM records, social media recommendations, and customer purchasing histories J JImprove conversions by delivering contextual editorial content based on location, time-of-day, purchasing history, stated preferences J JDifferentiated special offers depending whether you re in-store, at home, in a competitor s store J JImproved support thanks to more context-aware service staff J JExchanging feedback on websites and social networks 4

5 Contextual e-commerce requires an integrated approach With the rapid growth of online retail spending, the e-commerce sector has realized that the traditional distinctions between B2B and B2C are fading away along with the need for separate Web channels and parallel processes. The requirement now is to build on a single e-commerce, e-marketing and e-service platform that addresses all key target audiences: J JConsumers allowing consumers to enjoy quick, easy and consistent online experiences across multiple touch points J JBusinesses helping organizations to leverage powerful and convenient self-service Web solutions and manage all sales and service interactions from a single place J JWeb Channel Managers easily set-up and manage their Web presence with simple, step-by-step website management As online experiences become increasingly driven by business processes and transactions, 8 websites can no longer exist in isolation from the rest of the business. As a result, organizations will need to offer an experience that fully combines key e-commerce, Web, CRM, backoffice and fulfillment elements. This demands an integrated approach that can deliver contextual e-commerce functionality seamlessly, ready-torun and integrated directly with existing enterprise ecosystem solutions including inventory systems, customer relationship management (CRM) systems, enterprise resource planning (ERP) systems, and more 9. Gartner estimates that most organizations e-commerce initiatives can have as many as 15 to 20 primary or core integration points to complete a business process, 10 so it s increasingly important for businesses to work with a solution provider that can deliver close integration with core enterprise applications such as CRM and ERP particularly as the potential number of customer touchpoints and hence integration points increases. An integrated approach to contextual e-commerce. 5

6 CoreMedia and SAP : showcasing contextualized e-commerce CoreMedia, a leading provider of Web Content Management (WCM) software, provides precisely the kind of integrated e-commerce solution that businesses are demanding and need to address the challenges of contextualization. CoreMedia delivers a key component of the next generation SAP Web Channel Experience Management (WCEM) solution. This WCEM solution offers a full range of e-marketing, e-commerce, and e-service functions for creating and deploying Web shops as a profitable sales, service, and interaction channel. CoreMedia s unique strengths in contextualization enable organizations using SAP Web Channel Experience Management to optimize their online sales, marketing and service channel performance by incorporating contextualized content into the e-commerce dialogue and transform the shopping process into an adaptive shopping experience. Integrated storefront with contextual content models. The areas highlighted in green represent contextualized content. They are shown as an example for the purposes of this document only. 6

7 Conclusion For consumers, the emergence of a new generation of context-enriched online services that leverage factors such as the customer s social aspects, search preferences, presence status and location are set to offer a much more enjoyable and relevant online experience. For organizations and their service providers, contextualized e-commerce opens up the opportunity to secure new levels of customer engagement and loyalty and this is set to prove a key differentiator in today s increasingly competitive marketplace. By incorporating relevant content into product data to create stickier and more informative browsing experiences for current shops and by attracting new users searching for more engaging content, online retailers can really start to optimize the performance of their e-commerce channels. Working together, CoreMedia and SAP demonstrate how the right mix of product and contextualized content can increase up-sell and cross-sell opportunities, and significantly strengthen customer loyalty. 1 emarketer forecast, March Credit Suisse China 2015 report, as reported in Forbes, Jan 4, CMO: The Future of Mobile is Context, Forrester Research report, July ABI Research, 5 Citi Investment Research and Analysis quoted on All Things Digital: The Facebook chart that freaks Google out, September 26, ABI Research, Mobile Social Networking study, September The 2011 Gartner Scenario: Current States and Future Directions of the IT Industry, Gartner, January Web Content Management Will Weave Its Way Into More Enterprise Applications, Forrester, March The Online Customer Engagement Software Ecosystem, Forrester, February Gartner, Hype Cycle for e-commerce, August

8 Germany, Switzerland, Austria CoreMedia AG Ludwig-Erhard-Straße Hamburg Germany Tel Fax The Americas CoreMedia Corporation 118 Second Street, 5th Floor San Francisco CA USA Tel Europe, Middle East and Africa CoreMedia Ltd. 90 Long Acre Covent Garden London WC2E 9RZ United Kingdom Tel Asia Pacific CoreMedia Asia Pacific Pte. Ltd. 25 International Business Park #0 106 German Centre Singapore Tel For more information, please visit our website: Copyright CoreMedia AG. All rights reserved. SAP and SAP NetWeaver are registered trademarks of SAP AG in Germany and in several other countries. (1111-BG-EN-CON001)

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