How AI and Automation Will Transform E-Commerce Operations

Online retail and e-commerce providers are struggling to meet shopper expectations amidst ongoing inflation, higher costs and lingering supply chain woes. A new independent survey that queried nearly 2,000 global shoppers found that 88 percent of U.S. and 79 percent of U.K. shoppers said that online retailers delivered poor experiences at least once in the past year, citing increased pricing, late product shipments and excessive shipping costs as their primary frustrations. Today, shoppers expect more from online retailers, demanding free guaranteed on-time shipping, deeper price discounts, and personalized deals — or else they will purchase elsewhere. To fulfill these raised expectations, online retailers must improve e-commerce operations, back-office integration and omnichannel selling strategies well before the holiday 2024 shopping season commences.

Fortunately, online retailers can invest in new automation and artificial intelligence (AI) strategies right now to make dramatic improvements well ahead of the Holiday season, which starts in October. Investing in automation lets retailers scale operations quickly by streamlining business processes and reducing overall operational costs, thus allowing them to reduce shipping prices for discerning consumers. Furthermore, these investments will vastly improve overall customer experience. For example, automating customer service tasks will allow them to address customer inquiries immediately without having to wait for an available human representative to respond. Furthermore, automating back-end retail operations — from inventory to order fulfillment — will enable them to fulfill and ship goods swiftly without manual intervention or human error derailing the process.

Long-term success with automation and AI is best realized when retailers commit to a concerted effort and specific plan rather than testing a few piecemeal projects. With readily available AI and machine learning technologies offering infinite possibilities to boost autonomous systems, retailers can use predictive analytics algorithms to provide insight into what customers really want before they even know it themselves. This will help them sell products tailored to customers’ specific needs based on previous purchase behavior or preferences, ultimately enabling them to deliver a more personalized experience each time. Additionally, retailers can leverage AI to predict areas where stock needs replenishment well ahead of time so they won’t run out too soon or have too much leftover inventory wasting away on shelves.

Top Priorities to Get Ready for AI

Getting ready for AI requires having accurate business data as a core foundation. In order for retailers to access high-quality data that allows for AI-driven insights, retailers must ensure that they have solid business process design, well-connected systems and the automated processes that come from those efforts to truly leverage the power of AI technologies.

This spring, the top priorities for retailers will be connecting and automating their key operations, including fulfillment, procurement, inventory management, shipping, returns and overall customer experience. This will enable them to deliver guaranteed on-time shipping and access to the most desired products, which is what shoppers want the most. AI will also allow retailers to boost overall customer experience and service by significantly enhancing their personalization capabilities. AI-driven algorithms can analyze customer data to help them better understand customer preferences and behaviors, allowing retailers to offer tailored product recommendations and personalized shopping experiences. These customized experiences improve customer satisfaction while increasing the likelihood of repeat purchases.

From there, retailers should examine other operations across the rest of their organizations — including HR, marketing and social integrations — to determine where they can automate across those sectors. Having a complete automated business should be their ultimate goal or else they may get eclipsed by competitors with innovative business models and seamless operations.

AI: More Personalized Offers Across All Channels

Shoppers want relevant personalized offers from retailers that provide discounts and special deals at the right moments. These types of offers are viewed as most desirable by shoppers as many comparison shop across multiple sites to find the best deals. Moreover, the right personalized offers lead to increased loyalty rates among shoppers who expect seamless journeys across platforms where their preferences are already known before they even browse the catalogs of products offered. Here are four AI-driven personalization approaches that retailers should embrace:

• Make frequent, customized offers leveraging similar or related products based on past purchases or searches that shoppers are most likely to buy.
• Personalize the pages shoppers are shown or the ads they receive based on past purchases or product searches.
• Send free products or samples and customer loyalty gifts based on positive reviews or other key inputs.
• Suggest complementary products to drive upsell and cross-sell opportunities with each shopper.

Retailers can take these efforts a step further by leveraging automation to obtain valuable data on consumer purchasing habits. By connecting all their systems together, retailers can better see items that are frequently purchased or frequently returned by a shopper and can then show them offers that are most likely to be purchased based on historical behavior.

From there, they can feed all that buying data to a customer data platform, developing curated customer journeys or promotions to fit specific client sub-segments or niches. This will allow them to offer special promotions to brand devotees or improve re-purchase emails, prompting those communiques with special offers when a product a shopper purchased is likely to run out.

Start Holiday 2024 Planning Now

Retailers should fix siloed systems immediately, jump-starting the automation planning process now to ensure readiness once the October selling season begins. They should also stress-test e-commerce systems in advance to be certain they can accommodate spikes in order volumes. This process will help them avoid any logistical issues that may arise when it could be too late to fix them. Lastly, now is the perfect time to evaluate all shopping channels to ensure that the holiday shopping experience is as seamless as possible, going across all touchpoints from initial product research on Google and other search engines, marketplaces like Amazon.com and eBay, and third-party product review sites to their own brand websites where most of the purchasing is completed. This will ensure that all product descriptions and prices are accurate across each destination shoppers visit.

Investments in automation and AI will deliver online retailers significant boosts to sales and customer loyalty, so it's wise to begin the planning process as soon as possible.

Mark Simon is the vice president of strategy at Celigo, an integration-platform-as-a-service (iPaaS).