What will create or limit ecommerce success in the second half of 2020? We’ve looked at the circumstances of the first half of the year, the position retailers are in right now from a competitor, customer, and business point of view, and put together a set of ‘7 factors’ ecommerce companies may wish to put additional focus on through the remainder of 2020.
Those seven factors are:
1. Data & AI
2. Digital Skills
4. Competing with Amazon
5. Responding to Changing Customer Behaviour
6. Protecting from Recession
7. Understanding Implications for your overall Customer Experience Strategy
We’ll be talking about those in a webinar on the 15th July, but ahead of that here’s some expansion on the first of those: Data & AI.
If you’ve worked in digital areas for long, you’ll know that “Data” was talked of vaguely as panacea for many years: Got a problem? Data will solve it. AI has been a similar topic, but more from a future-looking point of view: Got a problem? In 5 years AI will solve it.
Neither of those is quite true, but each has a grain of truth for ecommerce:
The Impact of Data in H2 2020
In retail, having a decent platform of reliable data is a hygiene factor for running a successful ecommerce business. Having the ability to dive into the data and answer particular problems is one of the key advantages of ecommerce over some areas of traditional retail. On top of that: Having a solid base of data enables much other automated activity to take place: Google shopping ads (or in fact general CPA based bidding), Social ads to any level of sophistication, on-site search optimisation, product recommendations, CRM programs – none of these are really effective without a solid data platform – whether it’s something you’ve built in-house, or enabled via a third party system.
Whereas this is important at all times, the period we’re in right now gives it a little extra importance: When the normal patterns of business have broken, it’s much harder to rely on the tactics you’ve built up over the years. Whereas last year, you may have been able to reliably understand the number of new customers & the amount of revenue you’d achieve for a certain amount of PPC spend, this year your competitive marketplace has changed, your customers have changed, your supply chain has changed, and therefore the result is likely to shift month-to-month, week-to-week, as all of those factors move. The best way therefore to guide your activity is ‘bottom up’ from the data – either manually, or through simple rules, or through algorithms.
The Impact of AI in H2 2020
‘AI’ is usually spoken about in a forward-looking sense. In fact, in retail, ‘The Age of AI’ is already here. Just as you still hear people talk about how digital technology is going to change the workplace, when we’ve gone through several cycles of that already, some still talk about AI as something that will impact us in 4 or 5 years time. In actual fact, ‘AI’ has crept in over the past 4 or 5 years, not the next, and most journeys on the web today come into contact with AI systems in some manner or other.
In the main, ‘AI’ on the web and in ecommerce currently means machine learning: Systems trained to identify and react to patterns. From Google ad programs, trained to show your ads to users with a higher propensity to buy, to product recommendation algorithms, displaying products that you may buy on the basis of the behavour of millions of other users, to CRM programs that magically offer you an incentive just around the time it’s likely to tempt you to buy, machine learning has become part of the plumbing that guides how we all shop on the web.
If used properly, on the basis of solid data, simple machine-learned systems can be plugged into ecommerce sites to deliver immediate value both to retailers & to customers. At a point where our spending patterns and circumstances have all changed in one way or another, they offer a surprisingly simple solution in relation to the broad, nebulous way in which ‘AI’ is usually talked about.
We’ll be covering this, and more, in our upcoming webinar on July 15th.