by Nour | Mar 17, 2022 | Uncategorized
If we have learned one thing from the past year, it’s that things can change in an instant — changes we thought we had years to prepare for, behaviors we assumed we’d stick to forever, expectations we have of ourselves and our organizations. This is true of the way we live, the way we work, and the way we shop and buy as consumers.
In early 2021, the EY Future Consumer Index (Index), which has surveyed thousands of consumers since the early days of the pandemic, found that 80% of U.S. consumers are still changing the way they shop. Sixty percent are currently visiting brick-and-mortar stores less than before the pandemic, and 43% shop more often online for products they would have previously bought in stores. One of the most significant effects of Covid-19 is the realization that, for many of us, geographical location has become less relevant — so long as there’s an internet connection. This flexibility allows more consumers to move away from urban centers; the latest Index data shows that 26% of respondents plan to live in less densely populated areas, up from 22% in April of 2020.
Using the EY Embryonic platform, we also saw, almost overnight, e-commerce strategies shift from a perpetual top priority on every retailer’s three-year plan to a desperately needed lifeline that could enable them to survive a global pandemic. We found that retailers made approximately $10 billion in e-commerce investments, acquisitions and partnerships from May to July 2020. These investments spanned logistics capabilities to enable last-mile, asset-light approaches like ghost kitchens (restaurants with a space for kitchen equipment and facilities, but no dining area for walk-in customers) and dark stores (retail distribution centers that cater exclusively to online shopping), as well as product portfolio investments geared toward digital capabilities in AI and blockchain.
For some retailers, this past year has accelerated previously existing efforts to innovate. But for many others, it has spurred a great reset of the way they think about consumers’ needs and the future of digital commerce.
What consumer experience do you want to create?
To be successful in e-commerce, you need to think bigger than e-commerce. The core question retailers must ask themselves first is not, “What e-commerce investments do I need to make?” but rather, “What consumer experience do I need to offer?”
This is a culture change for many retailers who’ve long had a mentality that’s anchored in brick-and-mortar stores. The consumer experience is rapidly evolving from one that’s built upon the transactional process of in-store shopping to one that’s rooted in deep, ongoing and enriching relationships. As a retailer, you need to create an interwoven journey that’s relevant to your target consumer — and structure your channel ecosystem, e-commerce included, in a way that provides value along that journey.
Considering the consumer’s entire journey is especially important in today’s environment, where people’s social needs, such as feeling a sense of community, will impact their buying habits as the conditions of the pandemic continue to change. While the shift toward online shopping will likely remain, the desire for post-pandemic social interaction will likely drive people back to stores. Case in point: The Index found that 38% of consumers intend to do more shopping online and visit stores that provide great experiences.
In order to offer consumers the journey they need, retailers must understand the future of experience-led capabilities. E-commerce is a key piece of that future. But it’s not just about being online — it’s about doing it right and continuing to consider how in-person shopping fits into the customer’s overall journey.
So, how can retailers think about this integrated consumer journey, and how e-commerce fits into it? Here are some core questions to help define investment and operating model decisions.
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Do I have an agile, adaptive technology platform that understands that every consumer journey is different?
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Is my organizational structure free of silos — which isolate e-commerce, merchandising, store operations, supply chain, and marketing — that interrupt the experience?
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Have I considered my assortment congruity — what’s online and what’s in store and the logic behind channel exclusivity?
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How can I be price-competitive and still maintain margin? For example, how can I introduce impulse purchases in an online environment? What role does store layout and merchandising play in this?
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How do I orchestrate the consumer journey from digital to physical and back again?
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And finally, how do I maintain the experience all the way to consumers’ doorsteps?
It all comes down to delivery.
E-commerce success depends on the last mile.
Today’s consumers aren’t keen on excuses, especially when it comes to accessibility, affordability, and convenience. The Index found that only one in five (21%) U.S. consumers say they are forgiving retailers and brands for service disruptions due to Covid-19. In other words, the pandemic is no longer a reasonable excuse for not delivering orders on time. Today, retailers are vying for limited shipping capacity in the last mile due to surges in online shopping. As many of us experienced after Black Friday in 2020, it took weeks for products to finally arrive on our doorsteps. Even the most advanced e commerce capabilities can’t conceal the importance of fulfillment, as delivery becomes a cornerstone of the experience.
The store as fulfillment center.
The Index found that 37% of U.S. consumers will buy online and pick up in store more often in the future. But buyer beware: curbside or in-store pickup can quickly lose its luster if consumers endure long wait times in a jammed-up parking lot, or if their local store inventory can’t accommodate their online purchases. So, while the store as a fulfillment center can be an effective strategy, it requires systems and business units that communicate with each other to deliver on the promise. As services scale, so must retailers’ ability to deliver a consistent experience.
Regardless of how consumer behavior continues to change, retailers must be prepared to continue to develop stronger deeper relationships with their customers — both online and in person.
Source :
https://hbr.org/2021/05/how-e-commerce-fits-into-retails-post-pandemic-future?fbclid=IwAR0iPgVslWAa8HPtdKuR4pNz1uQyHZIGMYy0mgMsNMugxQjMJRkTYdWghJA
by Nour | Mar 11, 2022 | Uncategorized
According to UN trade and development experts UNCTAD, the e-commerce sector saw a “dramatic” rise in its share of all retail sales, from 16 per cent to 19 per cent in 2020.
The digital retail economy experienced most growth in the Republic of Korea, where internet sales increased from around one in five transactions in 2019, to more than one in four last year.
“These statistics show the growing importance of online activities”, said Shamika Sirimanne, UNCTAD’s director of technology and logistics. “They also point to the need for countries, especially developing ones, to have such information as they rebuild their economies in the wake of the COVID-19 pandemic.”
The UK also saw a spike in online transactions over the same period, from 15.8 to 23.3 per cent; so too did China (from 20.7 to 24.9 per cent), the US (11 to 14 per cent), Australia (6.3 to 9.4 per cent), Singapore (5.9 to 11.7 per cent) and Canada (3.6 to 6.2 per cent).
Online business-to-consumer (B2C) sales for the world’s top 13 companies stood at $2.9 trillion in 2020, UNCTAD said on Friday.
Bumpy ride
UNCTAD also said that among the top 13 e-commerce firms – most being from China and the US – those offering ride-hailing and travel services have suffered.
These include holiday site Expedia, which fell from fifth place in 2019 to 11th in 2020, a slide mirrored by travel aggregator, Booking Holdings, and Airbnb.
By comparison, e-firms offering a wider range of services and goods to online consumers fared better, with the top 13 companies seeing a more than 20 per cent increase in their sales – up from 17.9 per cent in 2019.
These winners include Shopify, whose gains rose more than 95 per cent last year – and Walmart (up 72.4 per cent).
Cashing-up
Overall, global e-commerce sales jumped to $26.7 trillion in 2019, up four per cent from a year earlier, the UN number-crunchers noted, citing the latest available estimates.
In addition to consumer online purchases, this figure includes “business-to-business” (B2B) trade, which put together was worth 30 per cent of global gross domestic product two years ago.
Source :
https://news.un.org/en/story/2021/05/1091182?fbclid=IwAR0PTLur5qU7nDk9rSaNNLYB6iJcA1tV9RmrA8h2a8le5xXrOYYI5lR5jcc
by Nour | Mar 6, 2022 | Uncategorized
The pandemic accelerated the uptake of e-commerce globally as people turned online in the face of lockdown restrictions. According to Forrester, there was a 25.7% surge in 2020 to make e-commerce worth $4.2tn and it expects retail sales worldwide to climb a further 16.8% in 2021.
It has also meant more customers than every are buying from retailers beyond their borders. Zion Market Research has found the global cross-border e-commerce delivered revenues to the tune of $562.1bn in 2018. By 2027 that figure is predicted to reach nearly $5tn.
This comes in the face of massively changing consumer expectations for product availability and delivery.
“The base level of shopper expectations have shifted. When Amazon launched Prime, shrinking standard delivery times from weeks to days, it was a game changer. However, it has only taken a few years for anything more than a couple of days to be completely unacceptable,” says Rob Sellers, head of retail at VCCP.
“Wherever products are manufactured or however complex the supply chain to get them to our houses, we expect almost immediate fulfilment.”
KPMG’s 2020 UK retail report found that 43% of consumers now select next-day delivery, a 4% rise on last year, while a massive 73% say they would have been dissuaded from a purchase if there had been a delivery charge associated with this, compared to 57% a year earlier.
The duration consumers are willing to wait for free shipping is also falling, from an average of 5.5 days in 2012 to 4.5 a year ago.
“But the average shopper has absolutely no appreciation of the complexities of the global supply chain,” continues Sellers. “They trust big platforms and retail brands, like Amazon, Nike and John Lewis, to handle that for them. What they care about is getting the product they want – when they want it and at a price they want.”
And at the moment, that comes at a huge environmental cost. According to Boston Consulting Group, transportation activities account for 17% of global greenhouse gas (GHG) emissions.
Over 90% of world trade moves by sea with maritime shipping accounting for 3% of all global emissions – a figure that could rise to 10% by 2050 according to experts.
Meanwhile, on land, the World Economic Forum estimates a 36% uptick in the number of delivery vehicles on our roads in the next decade.
But KPMG found that consumers also expect brands to be more sustainable in their supply chain. Over a third (37%) of shoppers now base their buying decisions on retailers’ ethical and sustainability policies, while 67% consumers claim to care more about the environmental impact of the goods they buy today than they did five years ago.
Nearly half (43%) of shoppers were frustrated or dissuaded from the purchasing process due to the packaging used, and with a growing expectation for lower-emission delivery and logistics procedures, KPMG urges that this is one area in which retailers have no choice but to move with the times.
Yet the trade off for speed is that orders can’t be consolidated, meaning more packaging waste. There’s also fewer packages dropped off per mile, and therefore more delivery vehicles on roads.
In an effort to maintain its delivery targets, Amazon has been building its own air fleet to rival the likes of UPS and FedEx.
“Most people say they are willing to pay more for sustainable brands, but many also wonder why they should have to,” says Michelle Whelan, chief executive of VMLY&R Commerce.
“The bottom line is that consumers are torn three ways. They want it cheap, they want it now and they’d also like it guilt-free. They do care, but they won’t necessarily do anything about it. The onus is therefore on brands to remove the friction of guilt in a way that keeps life convenient and affordable for customers, or make it a truly meaningful part of the experience.”
In response to the spotlight on the damaging impact of cargo shipping, last week a raft of brands including Ikea, Patagonia and Unilever signed a pledge to only use zero-carbon ships by 2040.
There are other brands trying to do e-commerce globally differently. Luxury marketplace Farfetch, for example, has baked sustainability into its business plan, creating several features including carbon-neutral shipping and return, with the brand taking responsibility for offsetting emissions. It has also built-in circularity, selling pre-owned products as well as in-season items and enabling easy donation to charities. It has established a Positively Conscious initiative, which enables shoppers to buy brands according to ethical and environmental criteria. Sales via this are growing faster than the overall Farfetch marketplace.
“It’s difficult for the consumer to truly understand the supply chain as there is not enough transparency from the brands and retailers. We even see that within companies there is not a holistic understanding of sustainability throughout the supply chain,” says Neda Eneva, global marketing director at Arch & Hook.
Arch & Hook is an Amsterdam-based startup that’s working with retailers to provide sustainable alternatives on things like hangers, furniture and fixtures, and transportation.
Eneva continues: “There is a gap between a consumer’s awareness of the environmental impact of the brand they buy and its sourcing and supply chain journey. There is also usually a gap between pricing for locally designed/sourced goods and imported goods from Asia for example.”
Brands like Everlane, H&M-owned Arket and Reformation are approaching this through the lens of “radical transparency”. When you shop on their sites, you’ll be given a breakdown of every part of the supply chain and how it factors into the end cost of the product.
Reformation has developed a methodology called ’RefScale’, which measures and shares the environmental impact of every garment it sells, such as volume of carbon dioxide and amount of water used in production.
“Other brands, including Allbirds and Veja, have found cultural kudos and justified premium pricing because of ethical behavior, not in spite of it,” continues Sellers.
“Projection of personal value through brands we choose to wear has always been a truth of fashion, but now those values are as likely to be broadly beneficial to the planet or society as much as they might be about other social standings.
“So the hope is that the standout behavior of some beacon brands, and some broad improvements from some of the biggest players, will stack up to a total reduction on the negative impact – either societal or environmental – that the total category has.”
Source : https://www.thedrum.com/news/2021/10/22/global-e-commerce-booming-are-consumers-happy-with-the-environmental-cost?fbclid=IwAR3MEGgUUfmVZplt29ZE7Js_SpFmGqBJyOGbA-eK1i9AWjXx1dHFJanROG4
by Nour | Mar 2, 2022 | Uncategorized
Google’s John Mueller was asked if “unlinked brand mentions” were important in Google’s algorithm. It was apparent from John’s response that “brand mentions” is probably not a real thing in Google’s algorithm, but he also said that there may be value to site visitors who encounter them.
Brand Mentions
There is a longstanding idea in the SEO community that Google uses mentions of a website as a form of link.
One version of the idea is that if someone publishes a URL like this, https://www.example.com but without making it a link, that Google probably counts it as a link. This is the unlinked URL idea, that a published URL can be used as a link by Google.
The unlinked URL idea subsequently evolved into the idea that if a website mentions another site’s brand name, that Google will also count that as a link. This is the “brand mentions” idea.
But there was never any evidence of that until around 2012 when Google published a patent called Ranking Search Results.
The patent was several pages long and buried deep in the middle of it was the mention of an “implied link” being used as a type of link, which was different from an “express link” which is described as a traditional hyperlink.
The phrase “implied links” only occurs a couple times in this one paragraph.
Two Main Ranking Factors Discussed in the Patent
To understand what the authors meant by an implied link you have to scroll up the page back to a section labeled “Background” where the authors explain what all the patent is about.
These are the two most important factors discussed in the patent:
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The authors explain they are using independent links to a website as part of the ranking process. They call the site being linked to a”target resource.”
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The authors also say that they are ranking search results by using search queries that contain a reference to a website, what they again call a “target resource.”
The patent explains without ambiguity that this second type of link is a search query that uses a brand name, what the SEO industry calls Branded Search Queries.
Where the patent makes a reference to a “group of resources,” it is referring to a group of web pages.
A resource is a web page or a website.
A group of resources is a group of web pages or websites.
One more time:
When the patent mentions a “resource” it’s talking about web pages or websites.
The patent states:
“A query can be classified as referring to a particular resource if the query includes a term that is recognized by the system as referring to the particular resource.
For example, a term that refers to a resource may be all of or a portion of a resource identifier, e.g., the URL, for the resource.
For example, the term “example.com” may be a term that is recognized as referring to the home page of that domain, e.g., the resource whose URL is “http://www.example.com”.
Thus, search queries including the term “example.com” can be classified as referring to that home page.
As another example, if the system has data indicating that the terms “example sf” and “esf” are commonly used by users to refer to the resource whose URL is “http://www.sf.example.com,” queries that contain the terms “example sf” or “esf”, e.g., the queries “example sf news” and “esf restaurant reviews,” can be counted as reference queries for the group that includes the resource whose URL is “http://www.sf.example.com.” “
The above explanation defines what the authors call “reference queries.”
A reference query is what the SEO community refers to as branded search queries.
A branded search query is a search someone performs on Google using a keyword plus the brand name, the domain of a website or even a URL, which is exactly what the patent defines as reference queries.
What the algorithm described in the patent does with those “reference queries” (branded search queries) is to use them like links.
The algorithm generates what’s called a “modification factor” which modifies (re-ranks) the search results according to this additional data.
The additional data is:
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A re-count of inbound links using only “independent” links (links not associated with the site being ranked.)
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Reference queries (branded search queries) are used as a type of link.
Here is what the patent states:
“The system generates a modification factor for the group of resources from the count of independent links and the count of reference queries…”
What the patent is doing is it is filtering out some hyperlinks in order to only use independent links and also to use branded search queries as another type of link, what can be defined as an implied link.
How the Idea of Brand Mentions Was Born
Some in the SEO community took one paragraph out of context in order to build their “brand mentions” idea.
The paragraph begins by talking about using independent links for ranking search results, just as is described in the background section of the patent.
“The system determines a count of independent links for the group (step 302).
A link for a group of resources is an incoming link to a resource in the group, i.e., a link having a resource in the group as its target.”
The above statement matches exactly what the entire patent talks about, independent links.
The next section is the part about “implied links” that has confused the search industry for the past ten years.
Two things to note in order to more easily understand what is written:
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A “source resource” is the source of a link, the page that is linking out.
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A “target resource” is what is being linked to (and ranked).
This is what the patent says:
“Links for the group can include express links, implied links, or both.
An express link, e.g., a hyperlink, is a link that is included in a source resource that a user can follow to navigate to a target resource.
An implied link is a reference to a target resource, e.g., a citation to the target resource, which is included in a source resource but is not an express link to the target resource.
Thus, a resource in the group can be the target of an implied link without a user being able to navigate to the resource by following the implied link.”
The key to what an “implied link” is contained in the very first mention of the phrase, implied link.
Here it is again, with my emphasis:
“An implied link is a reference to a target resource…”
Clearly, the use of the words “reference” is the second part of what the patent talks about, reference queries.
The patent talks about reference queries (aka branded search queries) from the beginning to the end.
In retrospect it was a mistake for some in the SEO industry to build an entire theory about brand mentions from a single paragraph that was removed from the context of the entire patent.
It’s clear that “implied links” are not about brand mentions.
But that’s background information on how “brand mentions” was popularized.
Question About Unlinked Brand Mentions
The question about brand mentions had a lot of background information to unpack. So thanks for sticking around for that because knowing it is helpful to understanding the question and John Mueller’s answer.
Here is the question that was asked:
“In some articles I see people are speaking about unlinked brand mention.
I want to know your opinion in this case.
Do you think it’s also important for algorithm, unlinked brand mention?”
Are Brand Mentions Important to Google’s Algorithm?
The concept of “brand mentions” appeared to be unclear to John Mueller.
So Mueller, asked a follow up question:
“How do you mean, “brand mentions?”
The person asking the question elaborated on what he meant:
“It’s like another website and article speaking about my website brand, but it doesn’t link to me.”
John Mueller answered:
“I don’t know.
I think that’s kind of tricky because we don’t really know what the context is there.
I mean, I don’t think it’s a bad thing, just for users.
Because if they can find your website through that mention, then that’s always a good thing.
But I wouldn’t assume that there’s like some… I don’t know… SEO factor that is trying to figure out where someone is mentioning your website name.”
Brand Mentions Are Not an SEO Factor
John Mueller confirmed that brand mentions are not a search engine optimization factor.
Given that the foundation of the “brand mentions” idea is built on one paragraph of a patent that’s been taken out of context, I would hope the SEO community will set aside the idea that “brand mentions” are an SEO factor.
Mueller did say that brand mentions can be useful for helping users become aware of a website. And I agree that’s a good way to think about brand mentions as a way to get the word out about a website.
But brand mentions are not an SEO factor.
Just Because it’s in a Patent Doesn’t Mean it’s in Use
One last note about the patent that mentions “reference queries.”
It’s important to understand that something isn’t necessarily in use by Google just because it appears in a patent or a research paper.
Source : https://www.searchenginejournal.com/brand-mentions-googles-algorithm/439801/?fbclid=IwAR1MzbYURYpuquDjezC7ZMjqz5Dtv0MJOjDr-Rr1kt6Aj9TjOTR6Q9XxwGI#close
by Nour | Feb 15, 2022 | Uncategorized
The last year has certainly changed the high street as we know it. We have seen stores closing and shopping centres left entirely empty. As millions of retail staff across the country were put on furlough, virtually all retail businesses regardless of size had to re-invent themselves as pure-play e-commerce or hybrid click-and-collect businesses. As the UK starts to re-emerge from lockdown and customers are returning to the high street, retailers need to focus on optimising success, sustaining business growth and giving customers the experience they now demand.
Despite the downturn and struggle that has plagued the retail sector over the last 18 months, there is clear evidence that some brands have seen substantial growth over the past year. This growth naturally comes from online.
Experian recently reported that online retail sales rose from 12% to 34% of total retail spend in the past year – hitting levels originally predicted for 2025. In fact, the number of registered digital and traditional retail businesses grew by 8% over the last five years, 7% of these occurred in the last year. But the question is, how do retailers take advantage of this surge and optimise success to drive growth in a new omni-channel world as customers return to the high street?
We first need to take a step back and it begins with understanding the rise of digital retail.
Upping the digital game
One reason for this growth is that so many retailers have upped their game digitally. Forced by circumstances, they all had to reassess and create new customer journeys, and revamp sites to improve information and transparency. Retailers had to better connect their shop fronts to their stocks and supply chains, implement a broader choice of delivery, collect and return options. They obviously also had to scale their e-commerce architectures to cope with the surge in traffic from anxious customers and, make sure they were always-on, providing great response time and experience.
It was a matter of survival and a clear call to action. Retailers had to try and match some of the pure-play e-commerce leaders by leveraging technology like APIs to shorten delivery times and using articifical intellegence (AI)/machine learning to propose better targeted product choices. Additionally, implementing augmented reality (AR)-based virtual try-ons, expanding payment options, but also increasing the frequency of campaigns and ‘Promo days’ to drive SEO, traffic and conversion, was essential.
When applied and utilised correctly, these actions positively impact customer experience, providing the instant and trustable online journey that customers demand. Yet, with so much change to implement in a short time frame, many retailers experienced significant challenges in ensuring that their systems were always on, reliable and meeting performance needs at scale.
With the IT and technology sector rocked by a recent series of high-profile outages, retailers realised they need to have the visibility over their entire tech stack to be able to detect, understand, troubleshoot and resolve issues before they turn into customer impacting outages or poor experiences. This is the foundation to then build great customer journeys and to optimise business success.
Still, alongside the high expectation for online performance, comes the challenge that every consumer’s online experience needs to be seamless and connected.
Communication is key
The success of digital retail definitely sits on a knife-edge built from a combination of great developer and e-commerce skills, infrastructure, cloud, and the ability to scale and adapt quickly as consumer traffic changes. But in this digital and omni-channel world, all brand teams also need to build a more integrated and real-time insight into how the consumer is using their site, whether e-Commerce teams, IT and software development, marketing, supply chain & logistics, customer service or finance
This means the performance of all customer journeys and touch-points needs to be monitored. Retailers need to understand how each touchpoint performs digitally, and which journeys or campaigns are effective. Knowing where customers drop or hang in the process, what causes friction and at which points customers can get customer support are key. And, how to maintain a shared awareness of the customer situation between stakeholders at all times.
This is something BT Shop, the consumer-facing retail division of BT, realised. To improve its customer experience, everyone has to have insight into how the consumer is using your site. Departments must then use this insight to break through siloes, and collaborate across teams to optimise customer experience, and crucially drive revenue. New Relic helped BT see this by connecting both the developer and the business teams through its observability platform.
Initially used by BT development teams to get comprehensive visibility across the software stack that runs the BT Shop site, the New Relic platform allowed both e-commerce and marketing teams to track key customer experience metrics. For example, time on site or average response time, or how a campaign performs with insight into traffic sources and revenue.
BT e-commerce teams can now understand how technology changes and software improvements impact their customers and their business, with a better connection between performance and conversions. By embracing this approach, BT Shop became far more data-aware and had a greater understanding of customer journeys. This enabled the retailer to improve experiences and upsell services across the board. For example, when BT e-commerce teams decided to only show the products they had in stock to reduce customer friction, they could immediately validate the positive impact of this decision through their User Experience and performance dashboards.
Achieving results collectively
Retail has evolved quickly to meet new customer demands, there is now no way back. Digital is now expanding into high-street shops, combining the best of both worlds in a blended consumer experience. What was differentiation is now table sticks. It has never been more essential for retailers and brands today to nail online, and failure is looming if different departments care about different parts of the business. Bringing these teams together, so they can monitor and understand performance in real-time and collectively achieve the business’s overall goals is crucial.
Developer, e-commerce and retail teams can drastically improve collaboration, increase velocity, adaptability and continuously improve customer conversion if they work from data and a single point of truth. Put simply, when applied correctly, observability provides the visibility, metrics and dashboards across the software, the user experience and the business that enables this. Measuring sales, performance, and new technologies becomes more accessible, and customers can genuinely see and feel the benefit. Whether a brand chooses to do this through an observability platform or another technology, there is no doubt that the state of the retail landscape is changing, and we’re certainly going to see the continued growth of digital and online.
Source :
https://www.computerweekly.com/
by Nour | Feb 15, 2022 | Uncategorized
In its Digital Economy Index report released in March 2021, Adobe claimed that 2022 would be the first trillion-dollar year for U.S. ecommerce. The increased adoption of artificial intelligence (AI) fuels this rapid growth, which is reshaping the ecommerce experience of today’s consumers.
From subtle changes like reducing product return rates to more apparent ones like hyper-personalized shopper journeys, retailers across the globe are experimenting with AI for a variety of use cases.
Thanks to the high emphasis on customer centricity, the need for human-centric AI interaction has become a vehicle not just to outdo the competition but deliver in a more open and resilient marketplace. Studies show that 70% of American and European decision-makers in the ecommerce industry believe that AI is a significant change for their business. AI is transforming the ecommerce industry by predicting customer shopping patterns based on purchase history, products searched, and browsing habits, as personalized product recommendations increasingly influence customer choices.
By entering the realm of customer behavior, AI is already assisting ecommerce businesses in online searches, identifying prospective consumers, sensing customer interests, presenting relevant products at the right time, and implementing analytics to broaden reach and customer base. AI is helping global brands like Nike raise the bar when delivering exceptional customer experiences. The iconic brand uses AI algorithms to offer tailored workout regimens and product recommendations as part of its customer loyalty programs.
But it’s not only the prominent players—mid-sized businesses are also leveraging the AI advantage to enhance customer experience. ecommerce retailers like The North Face utilize AI-driven virtual assistants to understand customer requirements better and provide personalized product recommendations based on real-time customer inputs.
Ways AI helps retailers
Simply put, AI enables ecommerce players to prepare better for the game ahead. Analyzing trends and customer behavior patterns can help improve sales processes and enhance strategic go-to-market decisions that impact the bottom line. Let us explore how:
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Targeted marketing: A recent Deloittestudy revealed that three out of the top five priorities of early AI adopters are developing new products, augmenting existing products and services, and enhancing customer relationships. Targeted marketing is what ecommerce companies swear by while employing AI at the initial stages of the customer journey. With AI, they can target potential buyers in the “consideration” phase, guide them in their product research, and help them find their desired products. Using AI, ecommerce brands can define predictive patterns to forecast customers’ buying decisions and easily identify buyers who are ‘most likely to buy.’ AI enables a 360-degree customer view, allowing businesses to establish targeted marketing strategies and execute effective campaigns with rich digital content to increase conversion rates.
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Personalized recommendations: With Amazon setting new standards for personalized shopping experiences online, mid-sized ecommerce businesses are investing big time in AI to engage new customers and boost repeat sales. Studiesshow that 80% of consumers prefer to purchase brands that offer personalized recommendations. AI empowers ecommerce with a real-time view of customer preferences and helps them deliver suitable product suggestions by analyzing purchase history, clicks, and search queries. This leads to cross-sell and upsell opportunities and unique shopping experiences that have the customers hooked forever. Whether a large, well-known brand or a mid-sized ecommerce business, AI-driven personalized recommendations and one-to-one customer experiences guarantee a strong competitive position in today’s over-crowded market.
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Customer segmentation:One of the cornerstones of successful ecommerce marketing, customer segmentation, is what differentiates leaders from laggards. Thanks to AI, customer segmentation is no longer limited to the traditional demographic parameters. It is a far more complex, value-driven exercise that allows ecommerce marketers to group customers in real-time, based on behavioral data without any human bias. With an increasing demand for hyper-personalized customer experiences, ecommerce companies can no longer be happy with knowing ‘who’ buys their products. Instead, they must know ‘where, when, and how consumers interact with their business to devise successful retail strategies. AI-driven customer segmentation enables ecommerce businesses to adopt advanced targeting approaches to serve smaller customer groups with clearly defined attributes—these aids in optimizing marketing efforts immensely.
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Strengthening sales processes:By integrating AI with CRM, ecommerce businesses are fulfilling customer demands faster and boosting their sales processes to uncover new opportunities. Research shows that brands can gain more leads (over 50%) and achieve cost benefits (40-60%) by leveraging AI for sales. AI helps mid-sized ecommerce businesses to streamline their checkout process by pre-qualifying customers and leads. It simplifies prospecting, creates better buyer personas, and helps sales reps identify high-value customers. By automating lead qualification and nurturing, AI allows sales teams to focus on qualified leads. AI also automates repetitive tasks so that sales reps can spend more time on selling products. This empowers sales teams with a real-time view of deal status in the pipeline and offers insights on deal scores to improve sales forecasts.
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High-end shopping assistance (chatbots and voice assistants): AI-enabled chatbots have radically altered the ecommerce industry. Studiesshow that while chatbots have ramped sales by 67%, response times have improved by 4x, and customer satisfaction has shot up by 24%. What makes chatbots more effective nowadays is that they are highly capable of two-way communication with the user. They don’t merely tell them what to do but also listen to their questions. AI-driven virtual assistants and bots are also very effective when nudging users towards a desired location, like a webpage for new products and promotional offers. Besides providing updates on orders, returns, and loyalty points, bots are increasingly used by mid-sized ecommerce brands to function as personal shopping assistants that can offer tailor-made advice and personalized tips for a high-end shopping experience.
Many believe that the emergence of disruptive technologies like AI and machine learning (ML) have contributed to the recent boom in online retail sales—up from $1.3 trillion in 2014 to $4.8 trillion in 2021. As borderless ecommerce becomes mainstream, AI is in for more rapid integration with retailers pumping in more money in tools that enable differentiators like personalized recommendations, voice search, virtual assistants, and more.
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