Incremental innovation in digital commerce

Embracing agility & resilience: The strategic advantage of incremental innovation in digital commerce

Sven van Hegelsom
Sven van Hegelsom
Customer Value Director, commercetools
Published 11 April 2023

In the current dynamic technological environment, businesses from various sectors must continuously adapt to address ever-changing customer expectations. The ability to maintain competitiveness and relevance is predicated on agility and flexibility. That's why incremental innovation has emerged as a critical strategy for thriving in this fast-paced context.

Incremental innovation in digital commerce

Organizations engaged in both B2B and B2C digital commerce confront the dual challenge of coping with the rapid pace of technological change while fulfilling customers' increasingly demanding expectations. How can organizations attain adaptability while ensuring a robust, scalable commerce solution that supports their business objectives?

It’s a big cliché: The only constant is change. The pace of change we are experiencing today is unprecedented. Technologies like ChatGPT are becoming mainstream in months. So, companies need to be adaptive and prepared for what lies ahead. Incremental innovation is the answer. How are you preparing for the impact of augmented reality on consumer behavior?
Sven van Hegelsom

Customer Value Director, commercetools

Understanding incremental innovation

Incremental innovation involves the regular implementation of minor enhancements to existing products, services or processes, as opposed to the radical transformation of entire technological systems. This allows companies to respond nimbly to evolving customer expectations and needs, continuously refining and adjusting their offerings to align with market shifts.

Adopting such a strategic approach enables companies to identify and address pain points before they escalate into significant issues, promoting customer satisfaction and loyalty. Through the ongoing optimization of their offerings, businesses can maintain their market positions and secure a long-term competitive edge.

Cultivating a culture of incremental innovation

Many organizations recognize the merits of cultivating a culture of incremental innovation, as opposed to pursuing “big-bang” technological overhauls. Incremental innovation is more cost-effective and less risky, as it facilitates rapid iterations and yields faster returns on newly released functionality.

Promoting incremental innovation can also empower employees, stimulate creativity and capitalize on the workforce's collective knowledge. The expeditious delivery of innovation allows employees to witness the rapid realization of their ideas, fostering a sense of value and investment in the organization's success.

Integrating data-driven decision-making into the incremental innovation process can help businesses identify and prioritize areas for improvement. By harnessing analytics and performance metrics, organizations can pinpoint opportunities to optimize their systems, enhance customer experiences, and ultimately, drive growth. Data-driven insights can also enable businesses to anticipate and respond to emerging trends and customer preferences, ensuring they remain ahead of the competition.

Establishing an environment conducive to cross-functional collaboration is crucial for nurturing a culture of incremental innovation. Encouraging teams from different departments to collaborate and share ideas can result in innovative solutions informed by diverse perspectives and expertise. This approach can facilitate the identification of synergies and opportunities for improvement that may have been obscured from a compartmentalized perspective.

Selecting commerce to enable incremental innovation

Organizations reliant on monolithic platforms often face challenges in implementing incremental innovation, as these systems inherently lack the necessary flexibility and scalability. Monolithic platforms are characterized by large, tightly coupled applications that render even minor changes cumbersome, time-consuming and costly. Consequently, businesses may be compelled to undertake extensive overhauls, which are resource-intensive and disruptive.

In contrast, companies that rely on MACH™-based solutions can effectively execute incremental innovation, thanks to the inherent flexibility and scalability of these systems. MACH, the foundation of composable commerce, utilizes a modular, decoupled architecture to create digital experiences. This approach enables businesses to rapidly develop and integrate new services, facilitating agile, frictionless changes to their systems.

Incremental innovation across B2C & B2B industries

Regardless of the specific business strategy, incremental innovation offers a promising path forward for both B2C and B2B enterprises, as evidenced by the impressive results achieved by companies adopting this process.

A notable B2C example is Mars, which sought to differentiate its M&M's brand online and enhance its Digital Commerce capabilities. After migrating from a legacy platform to commercetools, the brand began with a small minimal viable product (MVP) to introduce a new checkout experience. Mars then built its own configurator as an incremental innovation, further proving business value. The company is now transforming the entire stack, delivering unique, personalized brand experiences online and unlocking new revenue streams through constant feature updates.

Normet, a technology company providing complex machinery, equipment, spare parts and services for underground mining and tunneling projects, serves as a compelling B2B example for incremental innovation. With a traditional focus on person-to-person interactions between sales representatives and clients, Normet leapfrogged their digital offerings.

We are taking the first steps in digital commerce. However, we understand that we need to adapt to the changing needs and be future-proof as well [...] One of the challenges now is how do we build and design an architecture or modular approach that is fit for the future as well? That’s where the MACH approach from commercetools helps a lot.
Pekka Jaarinen

Director of Digital Services, Normet

By partnering with commercetools, Normet was able to utilize the modular solution provided and enable incremental innovation with a slow, staged rollout, taking in customer feedback and iterating based on that. Another way in which the company adopted incremental innovation was how it began with the spare parts portion of its business. This required digitizing a product catalog of over 25,000 items, and then moved on to other more complex areas, such as machinery.

The compelling business case for incremental innovation

Adopting incremental innovation offers a strategic pathway that is characterized by reduced risk, cost-effectiveness and accelerated ROI from new functionality releases. A modular approach, supported by MACH architecture, empowers organizations to implement swift, seamless changes to their technical offerings, ensuring their ability to adapt and respond to the rapidly changing needs of customers. Fostering a culture of incremental innovation, complemented by data-driven decision-making and cross-functional collaboration, enables businesses to enhance their digital commerce capabilities and navigate the turbulence of constant change.

Industry leaders are increasingly recognizing the transformative potential of incremental innovation in delivering tangible business value. By embracing this strategic approach, organizations can rapidly respond to shifting customer expectations and market dynamics, while minimizing risk and maximizing resource efficiency. Incremental innovation has become a vital component of sustainable growth and competitive advantage in today's fast-paced digital commerce landscape.
Sven van Hegelsom

Customer Value Director, commercetools

1. Accelerating time to value

By implementing incremental changes, businesses can swiftly realize the value and benefits of their investments. This approach enables organizations to respond more quickly to changing customer preferences and emerging trends, ensuring they maintain a competitive edge and stay ahead of the curve.

2. Mitigating risk and ensuring continuity

Incremental innovation reduces the risk associated with large-scale system overhauls. By focusing on smaller, targeted improvements, businesses can maintain continuity in their operations and minimize disruption. This approach allows companies to test and validate new features and processes on a smaller scale, reducing the potential negative impact of changes that may not yield the desired results.

3. Enhancing customer satisfaction and lifetime value

Incremental innovation allows businesses to continuously refine their offerings in response to customer feedback, enhancing customer satisfaction and loyalty - for example via A/B testing. This approach ensures that companies remain in sync with evolving customer needs and preferences, leading to higher customer retention rates and increased lifetime value.

4. Encouraging employee engagement and innovation

Fostering a culture of incremental innovation can inspire creativity and collaboration among employees. Rapid innovation delivery allows employees to see their ideas materialize quickly, fostering a sense of value and investment in the company's success. This culture can lead to a more engaged and motivated workforce, contributing to the overall growth and success of the organization.

5. Maximizing resource efficiency

Investing in incremental innovation can lead to more efficient use of resources, as businesses can allocate budgets and manpower more effectively. By prioritizing targeted improvements, organizations can optimize their operations and deliver maximum value with minimal investment.

In conclusion, embracing incremental innovation provides businesses with a strategic advantage in the dynamic landscape of digital commerce. By leveraging a modular approach supported by MACH architecture, companies can adapt to the ever-changing needs of their customers and remain competitive in an increasingly crowded market. Incremental innovation empowers organizations to enhance their digital commerce capabilities and thrive amidst the challenges of constant change.

Discover how commercetools can help your business embrace incremental innovation by visiting our Product Portfolio page.

Sven van Hegelsom
Sven van Hegelsom
Customer Value Director, commercetools

Sven is a seasoned expert in digital strategy in the Consumer Goods & Retail industry. As Customer Value Director, he articulates how a modern approach to digital commerce drives strategic outcomes for customers in EMEA.

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