Edition #2: The Ugly Truth: 8 Reasons Why E-commerce is so Difficult for Telcos

E-Commerce is the cornerstone of any modern retail strategy. So why do telcos find it so difficult to get e-commerce right? Maplewave’s SVP of Products & Services, Grant Carstensen, shares his thoughts in this edition of Telco Talk.  

E-commerce is growing faster than it ever has before, but most telcos still struggle to sell plans and devices online. Why is this the case?

The answer comes down to complexity. It’s really the same reason that telco retail in general is challenging; it’s just amplified in the digital channel when you don't have a sales agent there to guide the customer through the process.  

Here are the 8 reasons why e-commerce is so difficult for telcos, and how to overcome these challenges and bring a great online experience to life.

Telco E-Commerce Barriers

1. Service Configuration

Shopping online is easy on the surface. Add to cart, pay, ship, done. This is certainly the case for your average retailer who sells fixed products.  

In the telco world, unless you’re buying an accessory, most purchases are not so straightforward. Plans must be selected and configured. Devices must be activated. On top of that, the sales experience itself changes depending on what the customer is buying.  

Think about a customer who wants to sign up for a fixed-line service, like cable TV or internet. Before you can sell that service, you need to check if the service is available in their region.

When these transactions take place in-store, all the supporting systems already are integrated and speak to each other (hopefully!). When it comes to e-commerce, this is not something an out-of-the-box solution can do without extra integration work. So, many telcos simply don’t offer this experience online.

2. Credit Checks & Financing

When a customer purchases a high-end device or signs up for a post-paid account, credit checks and financing come into play. There are a lot of requirements that accompany these types of sales. These checks and balances are simple to perform in-store; you can just place a phone call. But online, it becomes tougher to validate this information without human intervention.  

This is why some telcos will actually require their customers to call the support centre to finalize an e-commerce transaction. What a bad experience! It’s possible to do this through e-commerce, but your solution would need to perform multiple API calls instead. Again, another function that your typical e-commerce solution may struggle with.

3. Regulatory Requirements

Telco transactions are subject to a myriad of regulatory requirements. To limit fraud and terrorism, many countries require ID checks when selling certain services or registering SIMs. Not only do telcos have to confirm the customer’s identity for the financing side, but they also must conform to government regulations or face fines and prosecution. The stakes are high if telcos can’t confidently do this online!

Again, secure integrations are required to make this work in an online environment, which can be tricky without the right technical solution.

4. Contracts

Unlike your typical online retailer, telco transactions often end with the signing of a contract. Again, that’s simple enough in-store. But in an online environment, how do you get a contract securely signed and sealed? Digital contract solutions are the answer, but they must be capable of remote signing, and be integrated into the online flow.  

5. SIM Cards

There are a lot of other edge cases that are more complicated than a straightforward new activation, such as porting an existing SIM card. How many customers could tell you what their ICCID number is, or for that matter, what a SIM card even is? That makes performing SIM activations online even more difficult. Again, integration can solve this, but it's another step. It's important to get that customer experience right to not lose customers during this process.

6. Level Of Complexity

So, when you consider all these things together, there's a high level of complexity, both from an implementation perspective, and in what the e-commerce platform needs to do. But there's also a level of complexity for the customer, so if it’s not dead simple, they’ll just opt to walk into a store instead.  

The e-commerce experience is pivotal. It can't be clunky; it can't be confusing. You really have to take that customer through the journey in a way they understand to ensure they don't fall out of the process.

7. Level Of Integration

Let's imagine you’ve designed a great customer journey, you have solutions to take care of all these steps, like confirming their identity and finalizing the transaction. That’s great. But the level of integration that’s needed to bring that all together means you now have a full-on integration project on your hands; one that's multi-party, multi-vendor, includes your own team, and an Enterprise Service Bus (ESB) most likely.  

Your integration project also involves different APIs, different contracts, and you must create a project plan to bring it together with heavy dependencies.  

To deliver that great customer experience, think about everything that’s required - all the systems that must be integrated in an automated way, needing to validate the customer’s identity, checking the billing stack to see what their credit looks like, and connecting with a check credit agency through an API.  

Depending on the market you're in, you might have government systems that need to do additional identity checks. Depending on the transaction type, your solution might need to talk to the product catalog to be able to show and configure the offer. It will need to integrate to activate that service, as well as with inventory systems, and payment integrations, of course.  

So, there are a lot of things that must come together to deliver a great customer experience. Now, you have an IT project on your hands to bring all those systems together. And then on top of it, if you want to offer click-and-collect and other experiences that span channels, you have yet another integration into the inventory solution, as well as the in-store commerce system, etc.  

8. Cash/Market Acceptance

Lastly, depending on where you do business, there is the additional challenge of cash and market acceptance. At Maplewave, a significant number of our customers operate in developing markets. Some of these are heavily cash-based markets, which creates yet another barrier to e-commerce. These customers may not have a credit history or the ability to make payments online.

In these cases, it’s important to develop a journey where customers can place their order online and pay in-person with cash. Maybe they order online and pick up in-store, or you bring in lockers and other technologies that can facilitate a cash payment upon collection.

The Solution

To sum up, e-commerce is difficult for telcos because there are a lot of requirements, the customer experience can be complicated, and you need a lot of expertise to bring this type of project to life.

But what’s the solution?

Standard e-commerce solutions don’t work well for telco. They’re built for selling physical items, but will struggle with all the integrations, service configuration, and activation – basically everything related to telecom commerce.  

If you had a big budget, you could hire an SI firm to bring together all the best-of-breed players to create a custom solution. But really, who has budget like that these days, and the time to manage a large project with multiple vendors!

What telcos should be looking for is a telco-specific platform with an e-commerce solution built-in. This way, all the complexity of your customer journeys and customer experience is already figured out, designed, and implemented. When integration abstractions are already in place, it’s just a matter of doing the last mile integration to all these systems to bring them together. This way, you get a shorter path to market, have to deal with fewer vendors, and have less customization work.

Additionally, when your solution is part of a platform, you’ll get access to the same integrations and functionality as the rest of your channels – all with a single vendor. This means customers get a consistent experience, whether they’re shopping in-store or online.

That’s what we offer at Maplewave. Because our system is designed for telco transactions, all those integrations and solutions are already built in, which offers the most functionality with the shortest path to market.

What’s Next For E-Commerce?  

E-Commerce can be daunting for telcos, but it’s also really exciting. It’s an essential part of the path to owning the customer relationship. By having a strong digital presence, telcos can really deepen their customer relationships.

As e-commerce adoption grows, telcos can evolve this channel to include marketplace sellers, like streaming services, to give customers that “one stop shop”. And of course, as e-SIM devices become dominant, incorporating this functionality into your e-commerce solution will open up even more self-service journeys. But more on that another day.

Wrap Up

Telco e-commerce is hard - but this strategic channel can’t be overlooked. With the proper platform-based approach, you can bring an autonomous digital shopping experience to your customers. If your online shopping experience is impossible without significant human intervention, it’s time to give this channel the attention it deserves.