Draw Them in with Content: Enabling Buying Decisions through Visual Commerce

Draw Them in with Content: Enabling Buying Decisions through Visual Commerce

The content that goes behind selling a product has rapidly scaled over the past decade, with more and more features to capture user-generated content and professional footage to sell products. This trend has been styled Visual Commerce and is a key part of the buyer’s journey – approximately 75% of internet users search for visual content before carrying out a purchase1.

The path to a sale has never been easy. Buyer journeys at a brick-and-mortar store always included some amount of comparison shopping and brands tried to influence buyers by helping them visualize their product on a mannequin or styled as part of a setting, or having a sales associate available to talk to. 

With eCommerce becoming all-pervasive and accelerating faster than retail these days, brands need to take over even more of that visualization in order to provide a seamless omnichannel experience – that is, to persuade a buyer to make an informed purchase decision without being able to touch and feel it. 

Visual commerce is about using compelling content in context to attract, influence and convert buyers on their journey. In short, heightening user engagement to drive sales.

High-quality content for product visualization

What they need is a step-up from static 2D product images. What they need is a branded visual experience, one that incorporates interactive content that is engaging as well as informational and is consistent in its messaging. 

Lookbooks and digital catalogs using large, high-resolution photos and livestreaming videos that show 360° views, as well as entertaining content such as GIFs and memes, are included in this list.

Add curated user-generated content as well as shoppability layers to visual assets to create shortcuts in the sales process. 

Immersive content using virtual reality (VR) and augmented reality (AR) can project a homeware product into the users home or help buyers visualize an accessory as part of a look in 3D. IKEA’s AR app goes as far as helping the buyer design entire rooms2. The more diverse your media, the higher the search engine rankings

User-generated content provides social proof and builds trust. According to a Bazaarvoice survey in December 2020, nearly two-thirds (62%) of consumers from Australia, Canada, France, Germany, the UK, and the US said they were more likely to buy a product if they were able to view customer photos and videos. Roughly a quarter of them were influenced by UGC on or used Facebook to make purchases based on UGC3. In fashion, up 9 out of 10 shoppers trust an influencer more than traditional advertisements or celebrity endorsements and this, alongside peer reviews (55%) and social media (74%) impact purchase decisions4.

There exist tools and platforms that allow you to

  • aggregate posts from your users on multiple social media channels such as Facebook, Instagram and Pinterest
  • curate the best content for your site
  • tag your products on their posts
  • display them as galleries or besides specific products, and
  • study the analytics of user engagement. 

Such shoppable posts can take users directly to the payments page and avoid extra time till purchase. 

Besides providing fresh and eye-catching imagery at low cost, using UGC and reviews also is a badge of authenticity, develops customer loyalty and builds trust. Would-be buyers can also see the context and the lifestyle in which the products are being used.

Product discovery through a personalized experience 

Artificial intelligence (AI) and machine learning (ML) are the ever-evolving technologies that underpin the rich personalization features of visual commerce. They help brands offer ever more individualized and dynamic content, offers, and recommendations to customers based on their demographics, preferences as well as past and present behavior. Content works harder over more buying journeys.

AI-powered visual search improves product discoverability. This feature enables people to go straight to a product using pictures clicked on their mobile devices, thereby increasing engagement, conversion rates and consequently, customer lifetime value. ASOS is a good example of an eCommerce website that does this well.

Visual configurators can also give a 360° view of the product and empower buyers by offering them options to change or personalize details. Allow them to point to a part of the product or use icons rather than use naming conventions that they may be unfamiliar with. Allow them to save and start over.

Gucci configurator for knitwear

Easy and seamless experience

The end goal of visual commerce is to reduce friction in the buying journey. The experience overall needs to be easy and seamless, else it will result in abandoned carts. IKEA users, for example, don’t love that they have to open up the IKEA website or app, besides the AR app, to complete the purchase. Amazon, on its part, had a consumer camera called the Echo Look, which enabled users to take videos and selfies, before folding its functionality into the Amazon shopping app.

Visual commerce for a digital world

Fashion shows are being reimagined as heightened visual experiences for a digital tomorrow, to market to buyers who are not there in person5. Even in B2B industries such as manufacturing, the lack of trade shows and exhibitions have given a push to visual commerce, showing that visual commerce is here to stay6

For more information about BORN Group’s expertise in brand and customer experience, click here.

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Footnotes

1. Visual Commerce 2017: How Image Recognition and Augmentation Are Changing Retail, eMarketer, https://www.emarketer.com/Report/Visual-Commerce-2017-How-Image-Recognition-Augmentation-Changing-Retail/2002059

2. IKEA’s Revamped AR App Lets You Design Entire Rooms, Wired, 20 Apr 2021, https://www.wired.com/story/ikea-revamped-ar-app-design-entire-rooms/

3. User-generated visual content can influence purchases, eMarketer, 21 Feb 2021, https://www.emarketer.com/content/user-generated-visual-content-influence-purchases

4.  The State of Fashion 2018, McKinsey and the Business of Fashion,  https://cdn.businessoffashion.com/reports/The_State_of_Fashion_2018_v2.pdf

5.  5 Digital Artists Reimagining The Fashion Show, Vogue UK, 23 May 2021, https://www.vogue.co.uk/fashion/article/digital-artists-reimagining-the-fashion-show

6.  COVID-19 Driving Visual Commerce Accelerator for Hand-Selected Manufacturers, Manufacturing Tomorrow, 2 Jun 2020, https://www.manufacturingtomorrow.com/article/2020/05/covid-19-driving-visual-commerce-accelerator-for-hand-selected-manufacturers/15326/

Shopping in Augmented Reality: The Impact of AR on eCommerce

Shopping in Augmented Reality: The Impact of AR on eCommerce

In 2016, Pokémon Go drew millions of individuals around the world into the streets to ostensibly play a game that simultaneously familiarized them with location-based services and augmented reality (AR) technology. 

What was once a gimmick in apps such as Snapchat and Instagram to add real-time special effects, transformations or filters to pics – bunny ears, anyone? – is now big business. 

AR has been on the radar of developers and marketers since 2017, when with a view to making the technology go mainstream, Apple announced its augmented reality framework. Called ARKit, the framework made it easier to develop apps for iOS apps and games. Consequently, the options available to brands have exploded.

Total spend worldwide on AR as well as virtual reality (VR) is expected to have topped USD 18.8 billion in 2020, an increase of 78% over 2019. This is set to rise considerably through to 2024, reaching USD 72.8 billion.1 Consumer mobile AR experiences spending alone is expected to rise from USD 1.38 billion in 2020 to USD 1.93 billion in 2021, before climbing to USD 4.18 billion by 2024.2

Brands as diverse as Gucci and Ikea are using AR technology to enhance their user experience with virtual trials.

Not surprisingly, AR has especially gained traction with beauty and furniture brands as people saw what filters could do to faces. Beauty brands such as Ulta were some of the first adopters of AR. L’Oreal ModiFace develops custom AR hair, cosmetics, and jewelry apps for brands like Amazon, Sephora, and Estée Lauder. Perfect’s YouCam’s 3D face scanning enables virtual makeovers. Samsung’s Bixby Vision uses ModiFace’s platform to let users try on makeup from Sephora, CoverGirl, and Laneige.3

Gucci let customers see what their Ace sneakers would look like on their feet, using technology developed by Wannaby, a Belarus-based startup, whose Wanna Kicks app also showcases other sneaker brands such as Nike, Adidas and Allbirds. Nike’s app can also measure customers’ foot sizes. AR has been a part of Gucci’s marketing mix before. The brand offered a customization service for select sneakers, bag,s and clothing items by equipping stores with a tool that let customers point an iPad or iPhone camera at a real product available in-store, personalize it and then see it in a real-world setting.

Snap, the maker of the Snapchat app, is looking to AR to make its platform profitable and commerce-oriented. Snap said it will be investing in more features to drive customer engagement and as an advertising tool4. Companies such as Target and Dior even have profiles on Snapchat.

Finally, Ikea has offered AR as part of their in-app experience since 2014 but their Place app takes it up a notch with users able to render digital renderings of their furniture in their living room. 

At this point though, while most brands are using AR the way movies use special effects – to enhance the user experience – most brands can’t definitively point to how much AR results in sales. Ulta says they look at AR as a way to ensure brand loyalty5

Regular fashion brands haven’t embraced AR as much because there are many ways clothes can look on a person depending on their body shape. ASOS is one of the few brands that have with its See My Fit function allowing users to visualize a dress on 16 virtual models between sizes 4 and 186

The future of AR is, to put it mildly, bright. Snap, which made the concept of filters commonplace, is betting on smart glasses, but these are first aimed at developers and creators7. Facebook and Apple are also expected to debut smart glasses for consumers in the next few years.

Besides clarifying business objectives and goals, brands looking to AR tools should choose carefully the kinds of AR tools as well as their licenses, and make sure they are compatible with the devices and operating systems that are in play.

What kinds of AR tools can you choose from? 

  • Location-based tools use GPS or position-detectors to determine current location, then adjust the environment and create objects in it. 
  • Marker-based tools are based on image recognition and the more advanced they are, the better they are able to detect 3D markers and real-life objects. 
  • Superimposition-based AI where objects are overlaid onto a real environment. One good example is IKEA’s Place app. 
  • Projection-based AR are the simplest type of AR and just project holograms onto a surface. 
  • AR codes use the basic idea of QR codes to add interactive content to the world around you. Amazon’s Augmented Reality App, for example, allows you to scan the QR codes on their packing boxes for interactive, shareable experiences.

At BORN, we pride ourselves on human-centered design. If you would like to know more about our capabilities in augmented reality and other forward-looking innovation, click here.

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Footnotes

1.  VR and AR market size, Statista, https://www.statista.com/statistics/591181/global-augmented-virtual-reality-market-size/

2. Consumer mobile augmented reality (AR) experiences spending worldwide from 2019 to 2024, Statista, https://www.statista.com/statistics/1222728/consumer-mobile-augmented-reality-spending/

3. Gucci’s iOS app lets you try shoes on remotely in AR, 26 June 2019, VentureBeat, https://venturebeat.com/2019/06/26/guccis-ios-app-lets-you-try-shoes-on-remotely-in-ar/

4.  How Snap aims to turn augmented reality into a monetization machine, ZDnet.com, https://www.zdnet.com/article/how-snap-aims-to-turn-augmented-reality-into-a-monetization-machine/

5.  Despite advancements, AR struggles to take off in retail, Modern Retail, 22 Jan 2020, https://www.modernretail.co/retailers/despite-advancement-ar-struggles-to-take-off-in-retail/

6. Asos is using AR to promote and sell fresh products in lockdown, The Drum, https://www.thedrum.com/news/2020/05/18/asos-using-ar-promote-and-sell-fresh-products-lockdown

7. Snap Plans Hardware Push With AR Spectacles, Drone, The Information, 30 Mar 2021, https://www.theinformation.com/articles/snap-plans-hardware-push-with-ar-spectacles-drone

Assessing The Pillars of Modern Digital Infrastructure

Assessing The Pillars of Modern Digital Infrastructure

Seeking to better understand customer experience expectations of digital commerce, Avalara commissioned business intelligence platform PSFK to research key trends and technologies along the purchase journey. The resulting five-chapter report features Avalara customers, partners, and thought leaders.

What did we learn?

Consumers expect retailers to have ecommerce and mobile capabilities. Their expectations are high; they bank on researching each stage of the purchase journey online. Real-time accuracy and transparency are essential, as is a seamless experience.

There’s a lot at stake. Global ecommerce totaled more than $3.5 trillion in 2019. By 2023, online retail sales in the United States alone are expected to reach $969.7 billion.

To succeed in this increasingly crowded field, retailers must deliver an exceptional customer experience at all stages of the customer journey, from discovery to post-purchase support. Technology is a key component of success, helping to build trust and therefore loyalty.

Mobile has elevated expectations: Consumers count on retailers to deliver a true omnichannel experience, tailored to them, no matter how they shop. Retailers that sideline mobile risk alienating a growing portion of the market. Mobile sales have doubled since 2015 and are expected to account for 44% of ecommerce by 2024.

In short, retail today must be “digital-first, fluid, and agile,” as the current pandemic has highlighted. In recent months, retailers reliant on physical stores alone were often unable to connect with customers. Those with an established online and mobile presence could meet consumers where they were — at home or on the move.

No matter the circumstances, the more agile a retailer’s overall digital infrastructure, the better the experience for customers passing through these five stages:

  • Discovery
  • ‘Store’ experience
  • Shopper education and assistance
  • Payment and tax
  • Fulfillment and support

Discovery

Consumers shop across all digital platforms in today’s hyper-connected world, including through social channels as well as through Alexa, Google Assistant, or Siri. Managing customer relationships is key. A dynamic outreach with visual search streams and shoppable content helps retailers rise above competitors. 

‘Store’ experience

To convert browsers to buyers, ecommerce retailers need more than an online storefront; the whole shopping experience must be streamlined, secure, and increasingly, curated. An adaptive homepage and social shopping options help provide the experience consumers crave, as does augmented retail. People respond well when given the option to virtually try on products.

Shopper education and assistance

Online shoppers are increasingly coming to expect personalized support at key moments, as they might receive in a brick-and-mortar store. They value well-timed expert opinions. Authentication tools and Artificial Intelligence (AI)-powered chatbots help customers navigate product catalogs and retailers understand when human interjection is necessary.

Payment and tax

Checkout must be seamless on the front and back end. Customers are one step closer to a purchase when their payment information is automatically (and securely) provided. Other best practices include offering one-click purchase options, digital layaway options, and in-cart optimization. Currency conversions aid cross-border sales, as do accurate tax and customs calculations. To foster trust, reveal shipping, tax, and other applicable charges up front.

Fulfillment and support

What happens after a customer clicks “Buy now” is an integral part of the customer experience. Flexible delivery options, including in-store pickup and returns, are a must in the age of near-immediate gratification. AI and machine learning can help streamline logistics and reduce costs. Customer loyalty can be fostered with product setup, ongoing support, as well as programs that encourage customer evangelization.

Exceed expectations

Exceeding expectations is key to successful digital commerce. Gain deeper understanding. Get the report here.

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Welcome to BORN’s Partner series! Through this program we look to highlight thought leadership from our vast array of technology partners. Follow along using the hashtag #thisisBORN and #BORNpartner!

Today, we’re thrilled to call attention to our longtime partner, Avalara. Avalara utilizes the PFSK platform to help assess which components of modern commerce infrastructure are some of the most essential. We hope you get a broad overview in this highlight post and explore deeper at Avalara’s site for the full white paper.

How to Increase Customer Lifetime Value With Visual Product Discovery

How to Increase Customer Lifetime Value With Visual Product Discovery

The global pandemic prompted a huge shift in consumer behavior — including notable breakdowns and disruptions in customer loyalty. 

As supply chains suffered a shock that restricted inventory and forced long-time customers to look elsewhere, another important transformation was taking place. 

Brands and retailers that hadn’t been focused on their eCommerce presence suddenly went “all-in.” And those that already had strong websites and solid operations in place to serve online shoppers took things up a notch. 

The resulting advancement in customer experience created a new breed of consumers. These shoppers have sky-high expectations from brands when it comes to everything from product recommendations to fulfillment to customer service, and more. 

Building Loyalty in the Post-Pandemic Landscape

Now that the initial “shock to loyalty” is leveling out, the onus is on brands and retailers to create customer experiences that are so intuitive, delightful, and memorable that they’ll entice these new, more demanding shoppers to come back time and time again. 

The brands that invest in keeping the new business they’re seeing in the long-term — or those that crack to code on how to increase customer lifetime value (LTV) — are poised to be at a tremendous advantage in the coming months. Today’s blog post with BORN partner Syte helps illustrate that advantage by going into detail on LTV and how visual product discovery helps win over shoppers. 

LTV is so essential because loyal customers don’t just return to your website more often, they are also more eager to spend with your brand. In fact, 39% of loyal customers will spend more on a product, even if there are other, less-expensive options available elsewhere.

Still, when looking to build lasting relationships with customers, brands and retailers often overlook the most critical element of the customer journey: product discovery

After all, if shoppers can’t find what they’re looking for in the first place, why would they come back?

Why Visual Discovery Wins Over Shoppers 

Innovative brands and retailers are increasingly using visual AI to take their product discovery experience to the next level. This emerging technology, which includes image recognition capabilities, allows retailers to pinpoint specific details about each product in their inventory and to use that unique visual data to surface the most relevant items for each shopper. 

Visual discovery tools that leverage AI, including camera search and smart recommendation carousels, enable shoppers to easily find products that suit their tastes, even when they don’t have the right search terms or the time to navigate through dozens of product listing pages. 

Connecting shoppers with their ideal products so seamlessly leads not only to a higher conversion rate but also to a dramatic rise in customer lifetime value. 

In fact, Syte’s data analysis from July-December 2020 found that when shoppers interact with on-site visual product discovery tools — specifically those powered by visual AI — they are more likely to become long-term, high-value customers:

  • Compared to high-intent “add to cart” shoppers, those who engaged with on-site product discovery tools had a 12% uplift in retention rate at the end of a 30-day period
  • The higher retention rate among users of visual discovery technologies also translated to a 19% uplift in customer LTV within a 30-day period, compared to all customers.

These numbers demonstrate that today’s shoppers deeply value brands that help them find what they want intuitively and quickly — and that they see this process as a core element of an improved customer experience. 

Brands that rise to the challenge of creating an outstanding product discovery experience will become a trusted destination for shoppers and drive long-term value from new customers. To learn more about how these solutions impact customer experience and drive business value, take a look at our partner Syte’s blog.

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Welcome to BORN’s Partner series! Through this program we look to highlight thought leadership from our vast array of technology partners. Follow along using the hashtag #thisisBORN and #BORNpartner!

Today, we’re happy to call attention to our visual search partner, Syte, and talk about how they help transform Customer Lifetime Value with effective visual product discovery.

The Clock is Ticking: It’s Time to Leverage Customer Data Platforms

The Clock is Ticking: It’s Time to Leverage Customer Data Platforms

The period of leveraging third-party cookies is coming to a screeching halt, with new regulations and privacy concerns arising daily. While this may be troublesome for marketers who rely on this data, there are options beyond third-party cookies. The time to migrate to a Customer Data Platform or CDP is now.

The key to effective digital marketing is high-quality customer data. Marketers know the much-discussed phrase ‘know your customer ‘ or KYC goes beyond just knowing their names and what they purchased in the past. High-quality data results in superior engagement and lifetime-value conversations. 

How well do you really know your customers though? Traditionally, organizations have used customer relationship management (CRM) systems operated by salespeople to organize and manage data from customer interactions. For example, a history of a customer’s past purchases would be tracked, or utilized to create a record of potential customers. These are then analyzed to drive sales. 

Further customer-relevant information is stored in other discrete, unconnected systems. Marketing systems and customer service information might only partially appear in CRM systems while unstructured data such as those from delivery platforms, i.e. systems that interact at channel touch points such as email software, webpages, social media or surveys would not be connected to those systems. It was hard to build up and maintain a persona of the customer from all this data that also stayed current. 

Besides demographic and transactional data, you can have behavioral data on the web and mobile from data management platforms (DMP), such as those that serve advertising and are used for retargeting using cookie – information that might expire in 90 days or the cookie’s lifetime – as well as in-store interactions. 

Each of the types of data mentioned above comes with different levels of personalization.

What is a Customer Data Platform?

All the information listed above can now be captured, labeled and stored in a CDP to form a more complete view of the customer to allow for better marketing efficiencies. The CDP Institute defines a CDP as “packaged software that creates a persistent, unified customer database that is accessible to other systems.” 

A CDP not only manages data from a wide variety of customer interactions and combines them with marketing content, but also makes it easier to comply with data protection regulations. This tool is usually managed by a marketing team without much technical support.

Features of a CDP

CDP software must include features such as the ability to;

  • Scour data from all sources, both online and offline, ideally in real time.  
  • Retain all original detail and segment them according to rules.
  • Store data for as long as users want.
  • Build unified customer profiles including identity, attribute and device data, and offer them to marketers in a web-based interface.
  • Integration with external systems to enable activation.

The data from a CDP can then be used to create a 360-degree view of the customer and their journey that is both individual and unique. Such a segmented model leads to superior insights and personalization, and as a result, increased engagement en route to a consistent multichannel user experience. Anonymous users are recognized as loyal customers who interact with the company via their channels of choice. 

CDPs could take the form solely of data assembly, including; campaigns (data, analytics and customer treatments) and delivery (data platforms, analytics, engagement and message delivery). They must have the ability to send segments and segment instructions to other execution tools for the execution of campaigns, mobile messaging and other channel activity. Some may even include activation features such as recommendations, optimization and testing.

Advantages of Leveraging CDP’s

Unique view of the customers: A CDP links internal CRM first-party data, second- and third-party data from business partners and providers, offline data, event and activity flows, data from the back office and data on transactions, customer behavior and experience. This granular data creates dynamic and unified profiles that can be updated in real-time.

Agility in decision-making: A CDP’s ability to use real-time information such as user behavior and changing technology trends to stay updated allows an organization to stay flexible and thrive in a dynamic business environment. They can do this by tweaking promotional metrics, pricing strategies, inventory scheduling and optimizing relationships with supplies and partners. 

Democratized business intelligence: The availability of customer data in one centralized platform allows users from different departments, customer touchpoints and cross-channel marketing efforts to have access to the same data.

Increased operational efficiency: CDP’s allow organizations to be more competitive – with centralized information at the push of a button, ready-to-use integrations and real-time analytics, they reduce the time between getting insights and using them to make decisions that impact the bottom line. 

A better marketing and user experience: A CDP combines operational data from the back office with front office and experience data. On the basis of permissions given, companies can offer their customers a personalized experience that is tailored to their needs and wants at the right time via the preferred channel.

Reliable data protection: A good CDP automatically recognizes the purpose for which data is recorded and sets the course for a holistic data protection strategy. Collected information is only added to the customer profile if the required declaration of consent is available. With the third-party cookie falling in importance and increased regulatory oversight of data collection, it’s expected that 1 in 4 CMOs will invest in consent and preference management software in 2021. Customers can trust that their data is optimally protected.

Choosing the right CDP for your business: CDP’s are already a key part of many marketing automation tools. With a tsunami of data expected from the Internet of Things applications, they are going to become its beating heart.  

To narrow down your choices, start with an audit of your marketing goals and current systems inefficiencies such as the state of your data. Then, identify the features of a CDP that will help you reduce those inefficiencies and achieve those goals.

Peer-to-peer review site G2 has an overview of the most popular CDPs, a list which includes Segment, Exponea, SAP Emarsys, Listrak, Tealium, Optimove, Adobe Experience Manager, and Salesforce Interaction Studio.

As experts in the CDP space, we at BORN would love to connect for an exploratory session to evaluate your current and future marketing technology strategy.

How to Leverage Technology to Improve CX and Build Loyalty

How to Leverage Technology to Improve CX and Build Loyalty

What turns a browser into a customer, and a customer into a repeat customer? It may be as simple as listening and helping shoppers find what they want. That can be done face-to-face in a brick-and-mortar store. For online sellers, it requires technology.

Though brick-and-mortar retail stores have reopened nationwide, the coronavirus (COVID-19) continues to drive record online sales. July’s ecommerce sales were lower than June’s, but still up 55% year over year. Adobe Analytics expects online sales for the year to surpass 2019 online sales by October 5, 2020. For many consumers, including some who didn’t shop online before the pandemic, ecommerce is still the best option.

To capture new customers and retain old ones, retailers must provide the essentials: easy browsing, a secure ecommerce store, seamless checkout, and trackable delivery. Yet today’s savvy consumers often want more. They like to see themselves wearing your products. They may want to connect with a sales associate — like they do when shopping in person.

It can all happen online with the right technology. Chatbots powered by artificial intelligence (AI), authentication tools, and curation services can help customers navigate product catalogs. When a shopper needs more detailed assistance, human experts jump in.

Business intelligence platform PSFK examines how technology helps shape customer experience in its Digital Commerce Playbook. Key findings on the importance of customer education and assistance are summarized below and all statistics are attributed to this study;

Help them find what they want

Customers value clear information, well-timed input, and expert opinions. That’s hard to offer when consumers are anonymous, but increasingly, online shoppers are letting themselves be known. About 58% of millennials are willing to share personal information in order to get attuned product recommendations. And 36% of customers (not just millennials) expect a company to be able to provide “relevant recommendations for additional products and services after a single purchase.”

It would take an army of sales associates to offer that sort of personalized shopping experience for all browsers. Fortunately, AI-enabled support can assist with the early stages, narrowing down choices and gleaning preferences. If more personalized help is needed, it can gather information to share with human successors.

Be there for them

Consumers want to feel connected, perhaps now more than ever. Prior to the pandemic, 72% of consumers aged 18–64 said their overall customer experience would be better if they could text with a live agent in real time — too many of us have spent too many hours of our lives caught in endless cycles of automated help lines that provide no answers. Offering different, more human ways to connect can give you a competitive edge. 

Authenticate

Consumers want access to human help, but they also want assurance the products they’re buying are authentic. And unfortunately, the rise of marketplace sales was accompanied by an increase in counterfeit products. More than 70% of products purchased from marketplaces annually are counterfeit, and consumers spend almost $0.5 trillion annually on counterfeit goods.

Marketplaces are aware of the problem and working to stem the tide of counterfeit sales. Meanwhile, customers need assurance they can trust retailers. You can provide that via AI verification and blockchain tracking, among other tools.

In short, people like supporting businesses they can trust. They respond to ecommerce stores that curate selections to their taste and provide personalized assistance. It’s what they expect when they shop in person, and they’re coming to expect it online. Retailers that can fulfill those expectations are likely to outperform those that don’t.

Want more key insights about how technology can improve consumer engagement? Get the report from Avalara. 

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Welcome to BORN’s Partner series! Through this program we look to highlight thought leadership from our vast array of technology partners. Follow along using the hashtag #thisisBORN and #BORNpartner!

Today, we’re thrilled to call attention to our longtime partner, Avalara. Through this insightful piece, we hope you gain an understanding of what types of commerce technology can lift customer experience and bring loyalty to a brand.

The Benefits of Centralizing Your Business with an ERP System: Part II

The Benefits of Centralizing Your Business with an ERP System: Part II

We return here to flesh out a Part II for our article, The Benefits of Centralizing Your Business with an ERP System. So far, we’ve explored how centralizing ERP functionality has become critical in today’s commerce space. Rather than launching multiple applications and burning through valuable company resources on human error and mistakes, a single elegant ERP solution saves both time and money. 

We’ve now seen this at play in business analytics, Key Performance Indicator (KPI) tracking, project management, resource management and other metrics, and gaining operations visibility across the organization. An effective ERP solution puts all of these items in one central location.

ERP Solution Features

There are other important features that a centralized ERP solution should offer. In addition to business metrics, KPIs, and project and resource management, executives will want to have a clear grasp of profitability and a firm’s bottom line through revenue recognition tools along with utilities for billing and time and expense management. Other tools include features such as work-in-progress (WiP) management and estimate management.

One of the key benefits of centralizing these operations with a single solution is that executives and project managers no longer need to waste time toggling between multiple applications while risking data integrity. Another benefit concerns the streamlining of operations. Without an integrated ERP system, obtaining useful business data such as profitability can be a lengthy and convoluted process—drawing from expenses, billing, revenue, and other sources—that ultimately puts a strain on your company’s bottom line.

Effects on Today’s Companies

Such strains can be more than trivial in today’s commerce landscape where even the slightest inefficiency is magnified as your organization scales. What may seem like a small compromise, even at the executive level, once multiplied across your business this can become a significant detriment to your profitability and, in the end, your company’s success. Centralizing your firm’s ERP solution anticipates growth and changes in operations, especially as they concern the rapid pace of today’s commerce landscape.

One of the key terms introduced in our first article on the benefits of centralizing your business via ERP was the Agility Era, a phrase that describes the advertising industry’s recent turn toward flexibility and streamlined production over stable client of record relationships. 1

Here, as in our previous discussion, this term acquires significance because of the fact that an integrated ERP solution will help to navigate this commerce landscape in crucial ways. As opposed to stringing together multiple applications to handle key tasks, an integrated approach saves valuable time and resources that are crucial in adapting to the Agility Era.

Recognizing revenue—and driving profitability through the smart management of resources—is a key part of the success of companies in today’s fast-paced and flexible environment. Here we’ll look first at how an integrated ERP solution can help drive profitability by staying on top of expenses, billing, and revenue. Clean and clear access to this data is a must for executives and reap the rewards of doing it all one place.

Tracking Your Bottom Line: Revenue Recognition, Expense Management, and Billing

One of the most important challenges facing executives and managers today is the ability to track your bottom line. Revenue recognition is one art of this important puzzle, while expense management and billing play important roles as well. 

Prior to comprehensive integrated ERP solutions like Oracle’s NetSuite, firms typically monitored revenue through manual spreadsheet entries characterized as “manual, error-prone, and a time-consuming process.” An integrated ERP solution automates this process, leaving little room for human error.

Revenue Recognition

Using manual practices, alternatively, leaves companies vulnerable to calculation lapses and misinterpretation of important revenue data points. Furthermore, with the introduction of ASC 606, which addresses the recording of revenue garnered from customer contracts while governing how businesses report specific details of those customer contracts, standards compatibility is a chief concern.

As the importance of such standards increases, companies will need to remain more vigilant than ever to ensure the accuracy and diligence of their revenue recognition processes. So, how can an integrated ERP solution overcome shortcomings and pitfalls introduced by human error to provide full visibility into and recognition of revenue?

The key to rigorous revenue tracking lies in a combination of flexibility and robustness. Ultimately, a comprehensive revenue recognition engine like the one included in NetSuite provides a fully automated revenue recognition process while ensuring that firms meet important requirements such as ASC 606. 

This engine spans from simplistic revenue recognition to more complex rules defining how and when revenue should be reported. Specific events such as milestone completion or billing can be used to trigger revenue recognition in an advanced integrated ERP solution. Rules such as these can be defined at the Statement of Work (SOW) level or the project level. 

One important feature of more advanced and integrated ERP solutions, like NetSuite, lies in the ability to decouple such rules from billing. For instance, an executive may want to know revenue data based on the percentage of completion of all projects, taking into account numbers beyond those generated through billing and expenses. 

Billing and Expense Management

Nevertheless, billing and expense management are also important dimensions of managing your company’s bottom line. One of the important features of an integrated ERP solution is the ability to combine these metrics into revenue recognition and project planning. As with revenue recognition, billing and expenses should be automated and included as core functionality in an effective ERP solution.

The same kinds of pain points found in manual revenue recognition processes rear their heads in haphazard billing systems that are not automated or include error-prone, human-executed steps toward receiving visibility into billing.

Another difficulty lies in systems that are too rigid and allow only one billing method for all clients. Instead, an integrated and robust ERP solution provides a single system with multiple billing methods, along with an ability to define and combine billing rules at the project level. Such an approach—which, as we’ll see, is similar for Work-in-Progress and estimate management—is crucial for project managers across the eCommerce industry.

ERP for Work-in-Progress (WiP) and Estimate Management

Two important components of an effective ERP system involve the management of WiP projects and the generation and delivery of project estimates. WiP management, which will be of interest to controllers, project managers, and A/R, concerns the ability to monitor and regulate current projects that are somewhere between project launch and completion. Estimate management, which is mostly a concern for project managers and accounting, allows a company to manage estimate versions, send working estimates to clients, and for accounting to track approvals and ongoing work.

WiP Management

WiP management can be segmented into three main areas of engagement: visibility, enforcement and control, and automation. As for visibility, with an effective ERP solution, project managers should be able to receive an informative overview with data on each WiP. This includes, for instance, a “WiP aging report,” which shows how long each work-in-progress has been in such a state along with anticipated releases. Auto-releasing and a portfolio-based display of WiPs are two other important forms of visibility included in an integrated ERP solution.

Another level of WiP management concerns enforcement and control, in which compliance and hierarchy come into play. How is the workflow and approval process handled for a project? Real-time integrated reports are important for knowing the exact status of WiP projects. 

As many project managers know, it would be disastrous to isolate this data in proprietary spreadsheets, especially if such platforms remain on local or unshared repositories. An integrated ERP solution ensures that WiP enforcement and control are shared laterally across your firm. Finally, automation ties back into release management, revenue recognition, and other tasks.

Estimate Management

Prior to releasing a WiP—in fact, before a project is even underway—an effective ERP solution will allow project managers to control all of the different versions of an estimate to be presented to a client. The key areas of interest for estimate management include pitch visibility, version control, and forecasting and reporting. 

As for pitch visibility and version control, an integrated ERP solution provides insight into pre-sales costs, while different versions of an estimate are shared and updated in real-time across your company. Finally, forecasting can allow collaboration between creative directors, account directors, and project managers to ensure an accurate understanding of revenue and profitability.

Conclusion: Putting the Puzzle Together

As many executives and project managers can attest, the individual tasks required to run a commerce solution can feel like a complicated set of puzzle pieces. When considering elements like revenue recognition, profitability tracking, expenses, and billing, these elements can seem like an unwieldy set of incongruous elements that don’t seem to fit any pattern or ruleset.

Furthermore, executives often sense that even when one department gets a piece in the right place, it takes a while for the rest of the firm to follow suite. This “a while” is no small concern. In fact, with poor management, such disconnects can cause crucial losses and drops in profitability.

Integrated ERP: The Right Fit

This is where an effective and integrated ERP solution becomes one of the most important decisions that a firm will make. There are of course many dimensions that figure into such a decision. But as we’ve seen throughout this two-part article series, one of the principal concerns should be the centralization of functionality into a single ERP solution. 

Whether concerned with billing, expense management, WiP management, estimate management, business analytics, KPI tracking, resource management, or profitability and bottom lines, the key to an effective ERP solution is that this information is shared and updated in real-time. Only with a truly integrated solution can your company put all of the puzzle pieces together and excel in the fast-paced and competitive commerce landscape of today.

For more information surrounding BORN Group’s ERP practice, please visit here.

Footnotes

1. https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/onmarketing/2014/08/27/how-a-creative-cfo-will-save-advertising/&refURL=&referrer=#2607740412ea

2. https://view.pointdrive.linkedin.com/presentations5e7289ae-cbb3-4f8c-9581-1c7af9e58433/preview/cab338b3-acc9-4c8d-a3ed-d32fec84dee0?auth=48e9df2d-f52b-4b02-af8c-93c80239e39f

3. http://ww2.cfo.com/revenue-recognition-accounting-tax/2018/03/asc-606-whats-impact-far/

4. https://view.pointdrive.linkedin.com/presentations/5e7289ae-cbb3-4f8c-9581-1c7af9e58433/preview/cab338b3-acc9-4c8d-a3ed-d32fec84dee0?auth=48e9df2d-f52b-4b02-af8c-93c80239e39f

5. https://view.pointdrive.linkedin.com/presentations/5e7289ae-cbb3-4f8c-9581-1c7af9e58433/preview/b68b1261-573b-41bb-b4e6-1934726d7b85?auth=48e9df2d-f52b-4b02-af8c-93c80239e39f

6. https://view.pointdrive.linkedin.com/presentations/5e7289ae-cbb3-4f8c-9581-1c7af9e58433/preview/b68b1261-573b-41bb-b4e6-1934726d7b85?auth=48e9df2d-f52b-4b02-af8c-93c80239e39f

7. https://view.pointdrive.linkedin.com/presentations/5e7289ae-cbb3-4f8c-9581-1c7af9e58433/preview/1ebef84d-f911-4108-af84-54b1ddd6c47f?auth=48e9df2d-f52b-4b02-af8c-93c80239e39f