This article originally appeared on Times Now
The online retail space is undergoing a major overhaul, all thanks to tech-savvy consumers who demand nothing less than personalized, and seamless shopping experiences. The rise of brands offering products exclusively through the digital sphere is a telling sign of how consumers are engaging in online shopping in a manner seen like never before. This palpable shift in the eCommerce landscape has allowed brands to explore new possibilities, from global markets and direct-to-consumer models to automated shopping experiences and Instagram boutiques. And, experts predict that by 2025, 80% of all sales interactions will occur via digital channels. Complexity in eCommerce and AI to make sense of it all The increasing complexity of the eCommerce sector is posing a big challenge for brands whose key goal is profitability. In order to attract customers, brands today have to contend with multiple channels.
Not only do they have to manage their listings on multiple marketplaces, but in addition, they are faced with the burden of running ads on these platforms as well as paying commission on sales. This creates a dual financial strain for business owners who are already grappling with steep customer acquisition costs.
In order to maintain profitability, brands must continuously strive to scale revenue drivers such as customer acquisition and retention, product pricing and promotions, while also optimizing operational costs including supply chain, inventory, and order management.
Achieving sustained growth requires a balanced approach that takes into account both revenue-enhancing and cost-saving measures. To achieve this, brands need to evaluate their business functions comprehensively, identify areas for cost-optimization, while finding ways to enhance the overall customer experience. For example, utilizing data on past purchases or search history to offer personalized
product recommendations can help ease decision fatigue and boost sales. This can also be used to offer dynamic pricing, which could help reduce cart abandonment.
Artificial intelligence is capable of analyzing extensive amounts of customer data to create cohorts and generate personalized messages that make each shopper feel valued and unique. This targeted approach, which relies on customer segmentation, has the potential to significantly improve customer retention.
The potential of AI-powered Algorithmic eCommerce
Technology plays a crucial role in the profitability of eCommerce businesses. From managing storefront and driving demand to supply chain management and order fulfilment, technology is involved in every aspect of the process.
Algorithmic eCommerce is a great example of the power of technology in this regard. By using machine learning algorithms, it can track campaigns, identify trends, anticipate buying patterns, optimize inventory levels, and adjust prices and promotions to maximize revenue. It enables businesses to identify growth opportunities and implement solutions effectively.
With consolidated data on a single dashboard, brands can have a better view of their entire eCommerce business. They can acquire customers more efficiently and at lower costs by optimizing their marketing efforts, including paid advertising. They can also integrate customer data into their customer service operations, providing them with better insights into customer needs and preferences.
Profitable eCommerce growth relies on operational efficiency, engaging customer
experiences, effective marketing strategies, and efficient inventory management.
Algorithmic eCommerce, powered by AI, ensures that every decision is data-driven,
making it a reliable and sustainable way to scale your eCommerce brand.
Authored By Prem Bhatia, Co-Founder and CEO, of Graas.
17 May 2023