The Next Generation Of E-Commerce Will Be Defined By 3 Key Elements: Convenience, Speed And Trust

Thanks to growing consumer preference for e-Commerce, some estimates put online sales as growing 23.6%, processing 14.8 million sales and encompassing $146.8 billion. Last November’s success of Singles Day in China, with $35.8 billion in a single day sale, is a positive harbinger.

According to a report from Mastercard SpendingPulse, U.S. holiday online sales grew 19% more in 2019 than they did compared to 2018, as overall sales increased by 3.4%. But it’s not just the volume of digital commerce that’s growing. It’s also the number of ways shoppers can shop: in addition to desktop e-Commerce, there’s conglomerate sites, social media ads, mobile shopping — and the latest growing trend, shopping through voice enablement.

Legacy retailers and e-Commerce players alike must meet this challenge, and the complexity and scale of meeting the expectations of this generation of customers is daunting. They demand new ways of access and convenience, have zero tolerance for downtime or slow performance, and see trust and security breaches as existential issues.

There have been bumps — or, rather, crashes — along the road. A 2018 survey found that 80% of customers say they have suffered a technical glitch in retail, and 28% reported that such negative technology experiences would result in less visits to the business. Similar stories can be found around consumer’s experiences around privacy and breaches — a 2019 IBM study, for example, found that 58% of U.S. consumers have had their personal data compromised, or know someone else who has. 64% of these consumers have opted not to work with a business due to concerns about whether they could keep their data secure.


To me, all these failures reflect a lack of availability, performance and security. To fully meet the demands of customers in this high-volume and high-complexity period of time, most organizations must turn to the hybrid cloud, balancing reliability and security provided by on-prem infrastructure and the speed and flexibility provided by the cloud and beyond. What are the factors that retail technology leaders must weigh?

Convenience And Speed

The simple truth about retail is that there can be no downtime. When it comes to consumer demand, a break in operations is a death knell. And this means any break, whether it’s a slowdown, pause in operations or complete breakdown of your systems.

For this fundamental demand, it’s not only about choosing infrastructure that can maintain high levels of availability and performance — that, I believe, is understood by the retail industry. The more difficult challenge is ensuring that the infrastructure is also flexible enough to deal with unpredictable spikes and demand swings. This is what retail businesses must do to provide always-on service that is constantly fast, even in the face of unpredictable demand. This is a primary reason why we’re seeing rapid growth in the hybrid cloud, as it provides the infrastructure that can adjust for a wide range of workloads.


Consumers are savvy about their data. They’re under no illusion about what happens to it, and how at risk it is. IBM’s study on consumers showed that 70% understood that their data travels beyond the original organization, to potentially hundreds of third-party vendors — a particular vulnerability, given that companies reported that 59% of data breaches were caused by vendors or third parties. The 64% of customers who opted not to work with businesses indicates that consumers, however, are shaping their shopping behavior based on how companies are handling their data.

Businesses must think about how they can control their data on multiple levels. Consumers are not just looking for security but transparency, and the assurance that their data is not being used in ways unknown to them. Regulation is following close behind, adding extra pressure; along with GDPR in Europe, the California Consumer Privacy Act was enacted in January 2020.

Businesses stay ahead of the curve and integrate technology that protects and controls data wherever it resides, with the ability to track where it is. There are more options than ever for retail businesses to secure and control where their customers’ data goes, wherever it might reside across the hybrid cloud. There’s no longer any excuse for businesses not to protect their data — but this is a crucial factor to consider when building hybrid cloud infrastructure.

Flexibility + New Experiences

The complexity of shopping not only means more pressure on performance, but also on delivering new and personalized experiences. Retailers are still struggling to integrate multiple shopping channels to build a unified retail experience, and data from each is still siloed. The potential for integrated experience is still in an experimental phase, but promising for even traditional channels — Kroger, for example, is leveraging IoT to give customers a digital shelf experience that delivers personalized and relevant information on nutrition and pricing.

Hybrid cloud for retail must factor in the growth of AI and new technologies. The experiences that AI and IoT can offer — from tailored brick-and-mortar experiences to digital assistant-to-online shopping experiences — requires cloud native development solutions. This also means allowing for the flexibility of an infrastructure that can support new technology and apps that are cloud native.

The potential returns are immense. Take Walmart as another example, which sought to connect its brick-and-mortar experience to the unique digital shopping experience of Walmart’s, and leveraged hybrid cloud infrastructure cloud to do so. Among other benefits, offers recommendations for customers to lower their total costs by showing how they can build “smarter” baskets and using particular payment methods. The experience now extends to the physical store, with faster order fulfillment and in-store pickup options. In the process, Walmart broke down operational silos and optimized functionalities across channels. Walmart in 2019 reported 40% year-on-year growth for its e-Commerce sales.

Integrating Everything

The good news is, with the hybrid cloud, businesses do not have to compromise on any one of these components to meet the demands of their customers. With this new generation of technology, businesses have more control and choice in how they can compete for the new generation of shoppers. However, with the uptick in sales volume from last year as well as the success of Singles Day this year, it’s clear that the time for careful strategy is now, weighing the factors that will make or break them for the heavy retail seasons to come.

As Vice President of Z Software at IBM, Barry Baker is responsible for the IBM Z Software portfolio, including: strategy, product/offering management, software design and development, and support covering transaction and data processing, enterprise modernization and DevOps, and IT management and optimization.

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