Innovative digital commerce Part 2: Creating Value

Alexa Dart

August 25, 2020
Reading Time: 6 minutes

In part 1 of this series, we discussed monetization strategies and prioritizing the user experience. We found that the key to success isn’t the strategy itself (provided it is adapted to the product), but the way it is implemented, in particular in relation to user experience. Through case studies we determined that the degree of seamless integration into the UX is a deciding factor for the level of success the monetization strategy will have:  an innovative experience that is non-intrusive and goes beyond user expectation and standard industry implementation has more chances of being successful. This may seem completely logical but you’d be surprised how easy it is to let UX take a back seat when money is on the table, hence Part 1.

In the process, we identified three key components to success: prioritizing the user experience, understanding your value-add, and understanding your users.

Today we’d like to discuss the second key component to digital commerce success: understanding your value-add.

1.  How value is created in e-commerce: The Value Creation Model

First things first, where does value come from?

The value creation model identifies 4 areas of value creation for the stakeholders in ecommerce:


Efficiency has been pinpointed as the highest driver of value in e-commerce, which instinctively makes sense. When the cost of a transaction goes down, value created goes up. This can be achieved in many ways including reducing information asymmetry between buyer and seller, economies of scale, simplifying transaction experience, streamlining inventory management, reducing errors, minimizing loading times and more.


This area refers to the value created by bundling goods together as opposed to selling them separately. In other words, when a bundle of ‘goods’ provides more value than the sum of the value of each ‘good’.  Complementarities can be created in different ways:

    • Vertical or horizontal complementarities of goods, including when they come from another company (eg. after sales services)
    • Combination of on and off-line components (eg. in store returns for online shopping)
    • Complementarities between technologies used, activities within the organization, and more.


To keep it simple, lock-in means making it harder for users to switch to a competitor, and increasing their motivation to repeatedly engage with your organization. This can be done in a multitude of ways: brand loyalty, a sense of community, high switching costs (loyalty programs, trust, familiarity with the interface, customization) and in some cases complementarities.


This refers to more traditional means of creating new value and excitement, for example new products or services, markets, methods of production, distribution, marketing etc. As traditional as it is, this is the area that provides the most opportunity for companies to innovate and stand out! In digital commerce in particular, the virtualization of the marketplace provides ample opportunities to innovate by creating new experiences, transaction structures, and even identifying new participants. For example, car rental company Turo connects car owners and people who need a car directly to reduce inefficiencies (third party intermediary) and simplify the car rental experience.

By looking at these four complementary value creation areas, and identifying the ones in which your organization is currently actively creating value or in which opportunities can be found, you are on the first step to understanding your value-add. After all, a user’s main take-away from any digital experience is the value-add it brings them.

Even more importantly, these four areas will often overlap and feed into one another. A great example of this could be Apple: their state of the art products all work seamlessly together (novelty, efficiency and complementarity), have a unique interface with a low learning curve (novelty and lock-in), and strong brand loyalty (lock-in). This combined with the structure of the technology ecosystem increases the level of lock-in further (so much so that iPhone users that try to switch to Android phones have a hard time doing it).

Ultimately, by identifying areas to create more value in, and possibly surpass other players in your industry, you will be able to emphasise said value-add through UI/UX and stand out in the eyes of your users.


2.  Defining your organization’s objectives

The next step is to define your objectives for user engagement.

There are many different ways to do so, but to keep it simple let’s look at a method often used by digital marketers: SOSTAC.

SOSTAC is a framework that is used to define and plan digital marketing campaigns. You look at the current Situation (company, audience, competitors, channels, high level company goals), create your Objectives, define your Strategy (how you’ll get to the objectives) and Tactics (the methods you will employ at various stages to ensure strategy success), take Action, and finally Control the results/outcome.

This framework is particularly useful because it can be used to help define your objectives and action plan within the context of your current situation (highly important) with a repeatable and actionable framework. This means you can go through the exercise in a structured way whenever necessary, with past SOSTACs for reference, and ensure that your objectives are aligned, actionable and controllable.

The main output of the SOSTAC will be your objectives: you need to know what you want and expect in order to align all aspects of the digital experience. In order to do so, you can use the Five Ss:


These are the goals related to growth, whether it’s more sales, members, donations, or other. For modern digital e-commerce ventures, make sure to think through and include your omni channel initiatives.
Questions you could ask yourself include: what does growth look like to your organization? Who are you selling to/who is your target audience?


Creating dialogue and engaging with customers is an important piece of e-commerce and all goals pertaining to communication should be clearly identified. This will include the digital presence of your brand, the tone, the engagement touchpoints, and the relationships you are trying to build with your users.
Questions you could ask yourself include: how will you speak to your audience? How close do you want to be to your audience? How much engagement do you expect/need?


The core of any digital commerce product: adding value. Value is what keeps customers happy and engaged. Digital products should therefore focus on making their lives better. That can be achieved in multiple ways, whether it is by simplifying a shopping experience or giving benefits and perks… as long as it ‘serves’ the users. In essence, serve refers to the digital platform’s effectiveness when it comes to satisfying and serving the customer.
Questions you could ask yourself include: how are you serving your audience? What do they expect/need? How can you make things easier for them?


This S is quite literal. It refers to saving costs internally and/or creating efficiencies through use of digital marketing as opposed to traditional initiatives. It could also refer to savings for your consumers.
Questions you could ask yourself include: what saving opportunities does digital provide? Are there any economies of scale or efficiencies I could create across various channels? Am I providing any savings to my consumers?


Extending your brand, creating engagement, advocacy, a positive experience for your consumer base. It’s about identifying pain and pleasure points in your audience, and opportunities to create ‘magic’ or feel-good moments that have an impact and keep them coming back.
Questions you could ask yourself include: how can I be creative/think outside the box? Are there any innovation opportunities I could capitalise one? What does my consumer resonate most with? 



While knowing your value and defining objectives may seem a little ‘theoretical’, it is important to take the time to go through this exercise for several reasons. 

1- Across all our ecommerce articles, you will notice we often mention your value-add, and for very good reason: it’s what keeps users coming back to your product. The uniqueness of what you bring to the table, whether it’s a product, experience, or even a feel-good moment, sets you apart from competitors.

2 – Once you know what you value-add is and have identified the key pleasure points for your users, you will be able to emphasize them through UX and align other strategic components around it. When we discussed monetization for example, we said integration into UX is key. Knowing how you add value will help that integration without deterring from what is most appealing to your users.

3 – Combine knowledge of your value-add with a competitive analysis and knowledge of your users expectations to go above and beyond!

4 – Markets constantly shift, new competitors emerge, new technology creates opportunities to innovate… In a world that changes, and changes fast, you need to stay relevant. Going through the exercise of understating your value-add, and adjusting it through new objectives, regularly will ensure your company stays relevant.


Stay tuned for the third and final Part of our innovative digital commerce series where we will explore the third success factor: understanding your users!

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