Series: From search to product discovery using composable commerce. How to meet the challenges of e-commerce with a modern architecture
E-commerce: new challenges ahead
After benefiting from the pandemic, e-commerce is now facing a much more difficult economic climate. Overall growth in the sector remains strongly driven by the sale of services. For products, growth is no longer there: Fevad is forecasting a decline of 1.8% in 2023 in terms of value, with a 3% drop in transactions.
On the positive side, this decline is less than last year's, and there is still plenty of room for improvement in many sectors, given that e-commerce accounts for just 10% of retail trade in France[1].
However, to seize the levers of growth, e-retailers need to continue investing, and this has become a real challenge as margins are also shrinking: 50% of e-retailers have reduced their margins in 2023[2].
This reduction in margins can be explained by several factors. Growing competition on digital channels is forcing companies to adopt aggressive price-cutting strategies in order to remain competitive. Changing consumer habits, combined with rising technology costs, have also impacted the profitability of retail companies. At the same time, companies are facing a general increase in costs, whether for energy, raw materials, logistics, or even digital marketing, with customer acquisition costs rising significantly.
In this context, an ROI approach becomes essential. Companies must continue to invest in order to remain competitive by choosing solutions that deliver value quickly. This means rethinking technology investment priorities and focusing on more agile and scalable solutions, such as those offered by composable architectures.
This architecture choice makes it easier to integrate innovations that optimize the customer experience while driving conversions, without requiring large investments in complex infrastructure. Among these innovations, the evolution of AI-powered search and e-merchandising techniques can make a real difference in site performance.
In this series of eight blog posts, we will provide you with concrete examples of how to turn your technology investments into real performance boosters and achieve a rapid ROI.
[1]republik-retail.fr
[2] fevad.com