This blog explores how digital commerce is changing the face of the service industry, from the way hospitality leverages augmented reality and personalization, to how energy companies are utilizing dynamic pricing. Read ahead to find out how these commerce technologies are helping services to stay competitive, and how they might apply to your business.
When considering the service industry, you don’t necessarily first think of commerce technology. More likely, you think about people – the ones who actually use the service. What pain point is the service solving? What is the demand for the service? How do you encourage customers to use the service?
Since customers, people, are at the heart of the service industry, it’s worth contemplating what people want: convenience, speed, choice, personalization. In today’s consumer-led world, the businesses that put people first are ultimately going to be the ones that win. How can the service industry give the people what they want? One powerful route is with commerce technology.
In this blog, we’re going to take a look at a couple of key service industries, and how they’re using commerce technology to better meet the demands of the modern consumer.
Travel & Hospitality
Think about the way you travel now compared to 10 years ago. You might regularly use a smartphone app to find the best hotel deals, book a train ticket, or purchase a travel experience as a gift. Not so long ago, if you wanted to go on vacation you needed to visit a travel agent or engage a sales rep via telephone to get the best deals, but now consumers are just as happy to purchase a long-distance flight on their phone as they would buying a liter of milk.
There’s no question that the travel and hospitality industry has fully embraced the digital revolution, but let’s look at the ways that commerce technology is utilized to attract and engage new customers, build trust, and increase service sales.
Travel companies now have access to a wealth of data about a potential traveler, from their birthday, location, gender, to what their purchase habits are like. Using commerce technology, the hospitality industry can leverage this information to create personalized offers, such as discounts on a spa break near the customer’s birthday, or special bundles every year around the same time they have historically booked larger vacations. Not only does this increase the sales potential for the business, but matches the consumers’ increased demand for more relevant deals.
Ever been looking at a particular destination or hotel, then gone off to do something else, only to receive an email or push notification reminding you to book? That’s retargeting, and it utilizes commerce technology that is proven to increase conversion. These emails or notifications benefit from automation technology so that sales reps don’t waste any time chasing details or individual customers, as everything is done digitally and without manual interaction. This saves your business both time and money, and increases the chances of revenue.
Visual Commerce and VR
How many times have you booked a holiday simply because you saw a beautiful picture on your friend’s social media, or watched a film in that location? For the travel and hospitality industry, visuals are everything. So-called ‘visual commerce’ technology which includes augmented and virtual reality is taking this one step further, by allowing potential travelers to take a virtual tour of a hotel or destination before booking – increasing trust, and therefore the chances of conversion.
One of the most important ways the travel and hospitality industry can take advantage of commerce technology is through a digital self-service portal. It doesn’t matter whether it’s the end consumer (the traveler) having access to a portal that consolidates all relevant information about the booking, or the vendor (the hotel, for instance) tracking which rooms are booked, who is a repeat customer etc. through a self-service portal. This technology is about enabling customers to gather data and make decisions autonomously – saving both time and money.
Once upon a time, if you were a small hotel, you’d stand almost no chance against a big chain with a larger marketing budget. These days, commerce technology allows smaller businesses, such as independent hotels or restaurants, to work with larger hospitality brands and be included in their offerings – opening up a vast new database of potential customers and increasing selection for the hospitality vendor. Customers are happy they have a wider choice and can support local businesses. All of this is achieved through marketplace technology.
As you can see from the examples above, there are numerous ways that the travel and hospitality industry can utilize commerce technology to ensure that they are the market leaders going into the future.
Now, let’s take a look at the Finance & Insurance industry.
Finance & Insurance
Gone are the days when the only way to send money abroad was by visiting the local branch of your bank and making an appointment with your bank manager. To say that commerce technology has revolutionized the finance industry would be an understatement. Not only have digital-first banks changed the perception of how a bank’s brand should be (from dry and technical to today’s fun, emoji-filled and playful brands), but they have changed the way that people and businesses all over the world manage their finances.
Banking basics are now digitized, such as paying bills, setting up direct debits, and seeing bank balances, but the role of commerce technology has enabled financial services to offer a whole host of new products and services.
You may have heard of ‘fintech’ – any financial services company that leverages new technologies to differentiate its offering. This covers everything from cryptocurrency to blockchain technology, and it has a monumental impact on the future of commerce.
Small Business Empowerment
Many small businesses, especially in less developed countries, might have been forced to operate ‘outside’ the financial system due to a lack of access to banks and the financial services that came along with it. This makes it incredibly difficult for small businesses to scale. Fintech and commerce technology have changed that. With the rise of smartphone penetration, so have the possibilities for small businesses. With the help of a card reading attachment, small businesses can now take card payments more easily. For markets where cash is still king, commerce technology that allows small businesses to manage orders on an app and still take cash payments is changing how these businesses operate and scale. Spryker’s customer Mercado Mayco in Mexico has done just that for small corner stores, known as tienditas. Read more about that success story here.
Similarly to the travel and hospitality industry, customers of financial services want their user experience to feel tailored to their exact needs. With the help of Artificial Intelligence and Big Data, financial services companies can use machine learning to predict consumer behavior and anticipate their needs. Whether that’s advertising a particular savings account just after pay day, or recommending extra home insurance after a new mortgage purchase, there is a great deal of potential for financial services to utilize customer data now that more and more information is consolidated into digital platforms.
Fintech enables businesses to streamline operations, saving time and money, which is especially important for entrepreneurship, as it creates a lower barrier to entry. Digital portals and automation translate into less manual interactions and lower operational costs. On the payment side of the business, fintech allows e-commerce companies to offer a faster, more secure, and more convenient payment method for their customers. Amazon popularized the ‘one-click checkout’ which is being implemented more and more in other business models, as customer’s shipping and payment data can be stored and remembered for next time.
Digitization is completely changing how the insurance industry will operate in the future, as so-called ‘e-insurance’ changes from a ‘detect and repair’ to a ‘predict and prevent’ model. AI technology is learning how to problem-solve and make better predictions about potential insurance situations, such as car crashes, or lifestyle-related early death. Almost every process involved in insurance, from underwriting and pricing to distribution and claims, is becoming more automated through technology, and will in turn increase efficiency and convenience for the end consumer. Insurance companies should ignore these advances at their peril – embracing AI and enabling the team to understand how it can be leveraged rather than seeing it as a threat will be vital in differentiating the market winners in this industry.
As you can see, the future of financial services and commerce technology are inextricably linked, but what about other service industries, like Healthcare, Transportation, or Utilities?
Healthcare, Transportation & Utilities
Some industries have a very clear link to commerce technology, while others are not so obvious at first glance. However, it’s important to think outside of the box when considering the future of the service industry, and how that might intersect with new technologies. Even sectors that are not traditionally ‘transactional’ by nature will undoubtedly have some intersection with commerce technology.
The digitization of healthcare, where patients can now organize a video call with their doctor, order prescriptions on an app, or access medical advice via a chatbot can be consolidated into one convenient portal for the patient, similar to a customer portal in the travel industry. In countries where healthcare is not free, this could include the option for transactions and payments, while in other nations with subsidized healthcare, a patient portal generates wealth in the form of consumer data that can be used to optimize and personalize the patient journey, or be retargeted to 3rd-party services, such as mental health care providers, or wellbeing apps.
Any industry that has historically relied on manual calculations and interactions are set to benefit from digitization, and the transportation and logistics industry is certainly one of them. Analytics and forecasting help with more accurate inventory management, machine learning can identify potential risks and disruptions in the supply chain, while marketplace technology can be utilized to connect various couriers and select the most efficient last-mile delivery for a product. As more and more companies operate globally, being able to connect and work with local logistics companies on the ground through a service and solution-oriented marketplace helps transport businesses to scale, all while increasing convenience for the customer.
Whether you’re looking at it from a price point-of-view or one of sustainability, energy efficiency is a hot topic and will continue to be in years to come. Technology plays a key role here, with inventions like smart meters enabling household energy consumers to track their consumption. Utility companies can utilize dynamic pricing, such as time-of-use rates to help manage rising energy demands, which in turn allows consumers to save money and energy by understanding the role of peak hour consumption habits. Other examples of dynamic pricing for energy include real-time pricing, critical peak pricing, and peak-time rebate.
Find the Right Digital Commerce Solution for Your Service Business
No matter which type of services industry you operate in, your business can benefit from sophisticated commerce technology that can help you improve efficiency in order to reduce overhead costs, elevate your user experience to foster more loyal customers, and ultimately, stay competitive.