'Legacy' tech is slowing retailers' e-commerce march

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Retailers have invested in e-commerce technologies, but still struggle with integrating them with complex legacy systems.

Legacy systems limit the ability of retailers to rapidly prototype, test and launch new digital offerings and drive consistent experience across channels – resulting in the failure to compete with modern, mobile-first ecommerce architectures. Thus, retailers are forced to make incremental changes towards digital, rather than a complete transformation.

Today’s retail space is dominated by the need to deliver a unified, connected experience. Retailers are racing to bolster their e-commerce capabilities, create in-store omni-channel environments and expand their customer base to a global audience. In short, they need to work harder to deliver a seamless, device-agnostic connected experience.
According to eMarketer, global retail e-commerce sales are expected to reach $4 trillion by 2020, and sales in the U.S. alone are projected to cross $423 billion in 2016.

Here’s what we can expect to see in as the competition and adoption of key technologies continues to increase:

Technology will become a competitive battlefront. Traditionally, retailers have used technology as an enabler of table stakes features and have competed on aspects such as product assortments, price, promotions, store footprints and marketing.

However, with fast-changing consumer trends, the retailers with the best set of tech tools will win. These include consumer-facing front-end digital presence, and both platform and architecture to ensure back-end systems work efficiently. More retailers are viewing those capabilities as key differentiators and we believe this will result in some of the larger retailers bringing core e-commerce technology in-house. We can already see this happening as in the case of Walmart’s acquisition of and Target building their own e-commerce solution.Consequently, many large e-commerce platform vendors might find themselves losing some of their marquee clients.

Amazon continues to threaten retailers. Amazon will become even more of an existential threat to large retailers and the e-commerce platform of choice for smaller retailers. Amazon's rapid adoption of next-generation technology and its efforts in reducing the distance between the consumer and the product brand with products like Amazon Echo and Dash are eroding other retailers’ relevance. Concurrently, big box retailers will transform the role of physical stores by creating new omni-channel experiences and focusing on making the store as a destination.

Retail will see a digital shift, not transformation. There will be an accelerated shift to mobile and cross-platform interactions. According to Criteo, mobile share of global e-commerce is expected to grow from 40% in 2015 to 70% by 2017, as we see consumer behavior such as online shoppers starting transactions on one device and ending on another become the norm. E-commerce will be leading this paradigm shift since it drives change and folds in new technologies that follow consumer needs.

In a hyperconnected market, brands must rely on well-differentiated services and solutions to create and maintain a competitive edge. In order to do so, companies must abandon legacy systems and adopt emerging technologies in order to fully embrace and execute digital strategies.

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