The twilight of the digitalization era in commerce?
Accenture has put forward the thesis that the era of business digitalization has come to an end. Specialists claim that since everyone is doing the same thing, we must stop calling it exceptional. Has the digital revolution met the same fate as electricity, which became so popular that its presence is now obvious? What, then, is "the next big thing" in business?
Starting your own company today is no problem at all. Thanks to technological development and extensive sales platforms that function as virtual shopping malls with thousands of digital boutiques, it has become a fairly simple task. Even with truly little capital, with a bit of effort and willingness, we will manage. And we won't be the first to take the risk and profit from it. There are already 5 million sellers with accounts on Amazon, of which about 1.5 million are active, and in the US market alone, over 140,000 sellers can boast annual turnover of at least 100,000 USD. As you can see, where there's a will, there's a way.
Also, having your own website is today cheaper and easier to manage than ever before. What's more, we don't even need specialist knowledge to build one. The web is full of free builders that allow you to create a simple website containing basic information. No wonder, then, that 60% of small businesses already have their own website – according to Visual Objects.
Something new is coming
Something new is coming
Is having your own website or a Facebook fan page something exceptional? Not particularly. Therefore, calling our reality the "post-digital era" seems quite justified. This does not mean, however, that companies can rest on their laurels. New technologies can still be a source of competitive advantage, provided they are truly new. Running a modern business resembles the way of the samurai, whose goal is not the finale but persisting in the process – an endless journey.
Of more than 6,000 businessmen and IT directors surveyed in the Accenture Technology Vision 2019 study, only 6 in 100 claim that technological innovations do not change their companies' position. Everything therefore indicates that business has become thoroughly immersed in the ocean of possibilities offered by digital transformation. However – as Warren Buffett used to say – only when the tide goes out do you discover who's been swimming naked. What does that mean? A company that wants to build its power cannot remain indifferent to modern solutions and trends, because during drastic changes or a crisis, all shortcomings will be exposed.
Waiting for a miracle
Thanks to big data analytics, Amazon has become one of the most powerful companies in the world. Why shouldn't Polish companies take advantage of this knowledge and these possibilities? In Poland, Big Data has been talked about for several years now. Interest in the topic is best shown by Google statistics, which clearly indicate that since 2011 the number of searches for this term has been systematically growing.
Poland at the tail end of Europe
Since 2016, Eurostat experts have been studying the Big Data market. They checked whether and to what extent European companies use big data analysis to develop their business. Unfortunately, we have no reason to be proud – Poland is not even at the European average (12%). We are definitely closer to Cyprus, ranked at the very bottom (5%), than to the top performer, Malta (24%). Only 8% of Polish companies use big data analytics, which is still a better result than two years ago, when this indicator was only 6%.
Sailing under one flag
Artificial intelligence, hyper-personalization, big data – these are not just fashionable buzzwords, but above all solutions whose implementation involves large expenditures. Even if we have the financial resources for it, we may lack the time or competences. Meanwhile, thanks to the efforts of giants such as Amazon, Google or Facebook, online sellers can freely use them. Thanks to machine learning, Amazon predicts which products a customer will most readily place in their basket. It is estimated that the e-commerce giant's recommendation engine drives 35% of total sales. Is there a company in the world that wouldn't want to increase its turnover by more than a third?
Technology is not everything
What the digitalization era in commerce is and why Accenture is announcing its end
Clipperon, Nethansa's proprietary system used to optimize the sales process, offers similar possibilities. Its intelligent algorithms can very effectively predict price trends using data collected by Amazon. The system enables the creation of analyses including, among others, a turnover forecast and profit estimation, information about competitors, and a product's sales ranking in its category.
Technology is one thing, but just as important as modern software is having experience and knowledge of how to navigate the world of virtual commerce. Although the place where our goods are displayed is "non-physical," the customer and the product very much are. Therefore, it should be remembered that no system will drive sales on its own.
Only by properly combining these two elements will we develop an effective sales model that will allow us to achieve success. This is confirmed by data collected by our company. Monitoring the results of companies that decided to cooperate with us, we noticed that the Polish and German companies' Amazon accounts that we manage generate an average of 600,000 EUR in annual turnover. This is data from before the outbreak of the coronavirus pandemic. In 2020 we expect record results, since as we know e-commerce gained considerably from the global lockdown.
In the 21st century, the virtual network has become something more than a place of entertainment. Today it is almost a second, fully functional world, with its own inhabitants, laws and rules. With the development of technology, it became clear that there is no escape from it, and the emergence of the COVID-19 pandemic only accelerated the process of business migration to the internet.
Every company that seriously thinks about its future should focus on developing digital competences and deeply integrating its operations with the internet. By nurturing customers' digital experiences, entrepreneurs can succeed, and by neglecting this sphere – fade into oblivion. A company's online activity has ceased to be a nice addition to its strategy and has become its core.
About the author
Sascha Stockem is the founder and CEO of Nethansa, which provides services that increase sales on the Amazon platform, with the help of which he introduces Polish and German companies to new, promising markets.
Sascha has over six years of experience in professional selling on Amazon, where together with his team he generated a total of more than 200 million PLN in turnover. He is a speaker at many European conferences, an e-commerce industry expert and the originator of the Clipperon system, which uses artificial intelligence to optimize sales on Amazon. Previously, for nearly eight years, he developed his own retail chain and was involved in wholesale trade with networks such as TK Maxx, Obi, Kik, Tedi, Orlen, Jawoll & Woolworth.
Summary
Accenture announces the end of the digitalization era – technology has become the standard, not a differentiator. It is increasingly difficult to gain an advantage merely from being present online, given that 5 million sellers operate on Amazon and 60% of small companies have their own website. The real opportunity lies in the intelligent use of data.
Polish companies still lag behind – only 8% use Big Data analytics, compared with 24% in Malta. Ready-made tools such as Nethansa's Clipperon system, which harness Amazon's potential, can be the remedy. As the company's founder, Sascha Stockem, emphasizes, technology alone is not enough – the key is combining it with knowledge of e-commerce.
