Lenovo’s Approach to Global, Customer-First E-Commerce
Providing rewarding digital browsing and buying experiences is a top priority as the global tech company continues its shift from a product-focused to a customer-centric business model.
Lenovo is a $50 billion technology company that designs, engineers, and builds smart devices and infrastructure for consumers and businesses in 180 markets around the world. Over the past decade, the company has steadily expanded its online e-commerce platform, from selling directly in approximately five countries to more than 30 today. Flexibility and adaptability have been paramount in managing the complexities of a growing global e-commerce capability, says Ajit Sivadasan, vice president and general manager of global e-commerce, digital marketing, and platform.
“The marketplace is incredibly dynamic,” he says. “Business models, the competitive landscape, and customer preferences shift rapidly, and technologies evolve continually. To be successful, we cannot operate as a monolithic organization.”
Founded almost 35 years ago, Lenovo is currently undergoing a transformation across the enterprise, moving to a customer-centered business model—a transition that is informing many of the initiatives that Sivadasan and his team have underway. “We’ve committed to a new level of focus on our customers,” he says. “It requires a stronger data foundation and the ability to seize opportunities and incorporate best practices faster.”
In a Q&A, Sivadasan discusses Lenovo’s top e-commerce priorities, its data-driven marketing initiatives, and how it helps customers make product choices.
What initiatives are you currently pursuing to make e-commerce experiences frictionless?
Sivadasan: We’re very focused on collecting and harnessing customers’ feedback and responding to their needs in real time. Understanding the challenges and irritants they face—and being able to remove them as they occur—is critical. It requires building a real-time data collection mechanism and generating insights in the moment so we can serve the content that will make the biggest impact.
Making payments easier is also important. There is significant disruption in the payment space—for example, with digital wallet apps being built into social media platforms. We’re seeking to provide customers with options to pay the way they’d like and to make the process as seamless as possible.
Improving supply chain speed and flexibility is another priority—and a significant challenge as our e-commerce operation has grown. Today’s customers expect delivery within a very short time after placing their orders. Many of our products are highly configurable, and the manufacturing bases can be all over the world, so fulfilling those orders can be complex.
The challenge is that improvement in any of these areas is a moving target because of the pace of change. But we’ve made significant investments and are seeing notable progress.
Lenovo has implemented several data-driven marketing initiatives. What are you hoping to accomplish, and what have you learned so far?
We’re seeking to understand our customers more clearly so, ultimately, we can serve them better. With meaningful insights into our customers and an appreciation for their needs, we can strengthen our value proposition and then create more relevant marketing and experiences. The challenge for us and for all marketers is to determine how to do this on an ongoing basis. It’s not just about selling the brand; it’s about providing value throughout the customer life cycle. This requires, for example, understanding customers’ perceptions and usage of products after they buy, and what services and support they desire. This is easier said than done for a company with B2B and B2C customers around the world. We’ve been working on connecting the dots across all our data sources, which is helping us understand the end-to-end customer experience better.
From a marketing standpoint, we are working on attribution models that give us better visibility into customer behavior across devices and domains. We’re seeking to understand and coordinate customers’ omnichannel experiences—for example, understanding the difference between experiences on mobile and desktop devices and between online and offline retail channels.
Across all our efforts, setting up a framework for experimentation has been critical. We’re not striving for perfection—it’s overrated and unrealistic. Instead, we’re seeking continual improvement. We use data and insights to make incremental advances and then scale quickly based on what works.
What’s an example of an area in which applying data has been particularly helpful?
We use data to run promotions more effectively. We’re pricing products almost in real time based not just on the competition but also on customer preferences and previous behaviors. We use conjoint analysis to take that data and provide tailored product configurations and pricing. It helps us present the three or four product configurations—out of millions possible—that are most likely to meet the buyer’s needs and give him or her the best value. This approach has had a huge impact on our ability to drive conversions and profitability.
You’ve said behavioral economics has played an important role in the work you do. What principles have been useful, and how have they shaped the digital experiences you provide?
I am a big fan of psychologists such as Dan Ariely, Amos Tversky, and Daniel Kahneman and their research on decision-making. When humans are presented with a lot of information, they can freeze and make suboptimal decisions. So the way we present options and choices is critical. If we present different sets of products or product categories on the same page, it becomes increasingly difficult for people. They start looking only at the price and may not make rational decisions based on the features or functions of the product. When we show products that are incrementally, but not completely, different, buyers can better understand their choices, compare them more easily, and make clear decisions. The way we present products can have a significant effect on website usability and user experience. Getting it right can require a tremendous amount of work, research, and testing. At any given time, we could be running as many as 50 tests on our site.
What’s ahead for your digital and e-commerce platforms? What challenges and opportunities do you anticipate?
For the foreseeable future, we expect a talent crunch—a shortage of people who have the technical skills needed in a rapidly evolving e-commerce landscape. This requires tech companies, including Lenovo, to think strategically about culture, retention, and managing costs. Consumer expectations present another challenge. If people can get a product delivered within an hour from one e-commerce site, that raises their expectations for all their e-commerce experiences. Our digital platforms need the capabilities to be able to meet—and exceed—these expectations. Last, changing consumer preferences present a challenge and are causing companies to rethink their business models. We have to be flexible enough to accommodate customers who, for example, prefer subscription-based buying.
In terms of opportunities, the small and midsize business (SMB) market holds tremendous potential, especially in developing markets. Technology is enabling entrepreneurs to start businesses they couldn’t have a decade ago. We’ve launched an SMB Pro offering that allows these customers to buy “as-a-service” to minimize the capital required to make a purchase. Millennials also present a significant opportunity. We’re very dedicated to connecting with this audience and building lasting relationships with them. For example, many millennials are also gamers, so we’re very focused on how to engage them through a gaming ecosystem rather than just hardware.
Overall, with our transformation from a product-centric to a customer-centric company, we’ll continue to identify ways to provide more rewarding experiences across channels. For example, we’ll keep looking for ways to improve website performance, speed, and security, and we’ll seek to provide mobile experiences that are clean and intuitive, not cluttered or cumbersome. We’ll strive to achieve and maintain visibility across the entire customer value chain so we can retain customers for many years. The true measure of our shift to customer-centricity will be our ability to move the business model beyond customer loyalty to advocacy. That’s where we’re headed.
—by Mary E. Morrison, editor, Deloitte Insights in CMO Today