How Automation and AI Are Changing Ecommerce Marketing

GRIN also recommends this free guide: How to Get ROI from Influencer Marketing.

How Automation and AI are Changing eCommerce Marketing - grin influencer marketing

Technology plays a critical role in consumer spending. After the coronavirus reduced in-person shopping across the world, shoppers found satisfaction in the rapidly-developing world of ecommerce through online stores, in-app shopping, social commerce, delivery services, and more.

Steve Hutt quote and portrait for GRIN Gets Real episode

Much of ecommerce success in 2020 lies in the creation and refinement of various automation and artificial intelligence tools. Not only have the latest technologies transformed online shopping, they have actually revolutionized everything about what retail used to be.

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What’s the difference between automation and AI?

Programming terms such as automation and artificial intelligence are not synonymous and thinking that they are can lead to poor software investments for ecommerce brands.

AI & Automation infographic
Image via Data Science Central

Transcript:

AI and Automation: Comparing the 2 Types

AI

  • Thinks for Itself or as close to a human as possible.
  • Benefits include competitor advantage, increased revenue and higher productivity.
  • An example of Artificial Intelligence is self-driving cars using human-like vehicle handling.

Automation

  • Automation is driven by a programme or software with rules.
  • Benefits include higher productivity, less variation, less costs and more reliability.
  • An example of automation is email automation funnels used by marketing departments.

Edge Tech

Website: https://www.edgetechrecruitment.ioEmail: info@edgetechrecruitment.io

Ecommerce automation

Automation refers to any platform that performs certain functions independently of a human telling it to do so. Most automation tools require an individual to set rules, conditions, and parameters and then run in the background for as long as the administrator or team desires.

Automation in ecommerce helps brands address redundant or tedious tasks efficiently so that operators can focus on other issues within the business. These tasks can (and do) exist within any function of the ecommerce process:

  • Manufacturing
  • Distribution
  • Website
  • Advertising
  • Content
  • Transactions
  • Fulfillment
  • Shipping
  • Customer Service

Ecommerce and artificial intelligence

Artificial intelligence, or AI, fuels better automation by allowing engineers to program human-like decision-making processes. AI helps platforms scale with an ecommerce brand’s growth so that it can manage various baseline and outlier shopper behavior properly.

Additionally, AI also empowers machine learning, a higher level of tech development that makes a program or automation tool aware of new circumstances and able to apply unique adjustments to AI decision-making. In other words, ecommerce is constantly upgrading AI capabilities so that they are smarter and more intuitive as a platform gathers more user data.

How are automation and AI helping ecommerce brands?

The impact of automation and AI in ecommerce has two fronts: vendors and shoppers. For vendors, better technology improves internal processes, marketing, and sales. From the shoppers’ point of view, automation and AI offer greater personalization and a better user experience.

Bar graph of Importance of Select Emerging Technologies in 2020
Image via eMarketer

Transcript:

Bar graph of Importance of Select Emerging Technologies in 2020 According to Client-Side Marketers and Agency Executives Worldwide (% of respondents)

AI

  • 36% regarded as very important
  • 47% regarded as quite important
  • 18% regarded as not important

Enhanced payment technologies

  • 35% regarded as very important
  • 40% regarded as quite important
  • 25% regarded as not important

Live video/live streaming

  • 31% regarded as very important
  • 43% regarded as quite important
  • 25% regarded as not important

Chatbots/messenger apps

  • 30% regarded as very important
  • 47% regarded as quite important
  • 24% regarded as not important

5g

  • 29% regarded as very important
  • 36% regarded as quite important
  • 36% regarded as not important

Internet of things

  • 26% regarded as very important
  • 47% regarded as quite important
  • 27% regarded as not important

Voice interfaces

  • 22% regarded as very important
  • 44% regarded as quite important
  • 34 regarded as not important

VR/AR

  • 17% regarded as very important
  • 48% regarded as quite important
  • 35% regarded as not important

Facial recognition

  • 13% regarded as very important
  • 32% regarded as quite important
  • 54% regarded as not important

Wearables

  • 13% regarded as very important
  • 35% regarded as quite important
  • 52% regarded as not important

While automation and AI are altering the ecommerce landscape in countless ways, we’ve narrowed them down to six game-changing categories.

  • Omnichannel Marketing
  • PDPs and Search
  • Conversational Marketing
  • Loyalty Currency
  • Payments and Fulfillment
  • Relationship Management

Omnichannel marketing in ecommerce

The omnichannel retail approach used to only belong to big brand names with deep pockets, such as Nike and Sephora. But today – thanks in large part to the economic impact of COVID-19 – small, DTC brands are able to enjoy omnichannel capabilities on a modest budget.

When it comes to omnichannel marketing, the keyword is “seamless.” Consumers don’t have to update platforms or sales agents with their preferences, purchases, and issues, because every branded platform and location talks to each other. 

Infographic of Multichannel vs Omnichannel examples
Image via Omnisend

Transcript:

Multichannel vs Omnichannel 
Multichannel: Starts with the company and moves outward to channels

Business

  • Web
  • Mobile
  • Social
  • Store
Omnichannel: Starts with the customer and interacts between channels for a seamless experience

Customer

  • Mobile
  • Telephone
  • Social
  • Web
  • Store
  • Customer service

Omnichannel retail is the best automation and AI example of consumer-centric technology. But the benefits still go both ways, since brands using the omnichannel approach enjoy consistency and turnkey solutions (such as real-time inventory updates) whether a consumer purchased on an app, website, social media store, or brick-and-mortar storefront.

Product description pages and consumer search

Whether in creating product descriptions or broader SEO, the ongoing struggle is for marketers and engineers to understand what users mean when they input queries in search tools. 

In some cases, consumers know what they want or need but don’t know the name. Other times, shoppers can describe a problem they’re having but aren’t sure what products and solutions are available. 

How Automation and AI Are Changing Ecommerce Marketing 1
Image via Blue Stout

Aside from making sure that an online store’s PDPs are accurate, the next step is to anticipate consumer search activity online. This project requires data collection and analysis to improve website schema, keyword strategies, product description copywriting, tags, and eCommerce search tools. Automation and AI are helping vendors simplify this process and better serve the needs of customers.

Conversational marketing

Conversational marketing is any attempt to provide direct, one-to-one assistance to online shoppers using on-demand conversational tools, such as live chat, instant messaging, or SMS marketing.

This approach to customer support and sales rose primarily out of UX issues with chatbot services. Brands with limited resources recognized the need for 24/7 customer and sales support but lacked the funds to hire live agents. Chatbots filled the void (at least in theory) at a fraction of the cost and provided ecommerce brands a front-lines conversational support tool to keep shoppers engaged.

But chatbot technology is not the same as conversations with human beings. As such, automation and AI have begun offering hybrid solutions, empowering the human touch at every possible opportunity while supporting financial and time constraints facing most small to medium ecommerce businesses today.

The results thus far are impressive. Chatbots are able to handle incrementally more complex issues, and live agents have more margin to assist customers with specialized problems and questions.

Recent developments in two-way text message marketing are allowing brands to continue the conversation with shoppers even after they’ve left an online store. Other examples of conversational marketing include brand-consumer interactions during social media live events (in the comments), as well as influencers showcasing their favorite products and answering questions about those products online.

Not only has conversational marketing increased revenue for these brands, but it has also significantly reduced returns and abandoned carts.

Loyalty currency management

The loyalty ecosystem within ecommerce allows shoppers to enjoy new privileges and discounts in return for their repeat purchases and referrals. 

Creating and managing a loyalty currency program requires brands to recognize their repeat customers, maintain critical margins, and sort enormous amounts of data. Without automation and AI, the process would be nearly impossible.

Line graph of recognition loyalty
Image via Antavo

Transcript:

Line graph of Recognition Loyalty time vs engagement level

The longer the time and the more engagement outside of just the buying cycle, the more the more customer engagement level.

But as technology provides more and better streamlined functionality for loyalty programs, brands will be able to increase the value of loyalty tokens and rewards. These advances will help brands nurture more vibrant customer advocacy programs and increase retention.

Payments and fulfillment

The transaction and product fulfillment process is perhaps one of the most critical components to a competitive ecommerce strategy. Payment options allow shoppers to pay easier and faster, and brands must demonstrate basic consumer security measures.

Thanks in large part to Amazon Prime, consumers also expect faster shipping. To make that happen, brands must find reliable ways to verify payments, connect orders to distribution, update inventory, maintain sustainable price points, and ship purchases as soon as possible. ecommerce solutions are helping brands of all sizes automate and streamline their fulfillment process to remain competitive with Amazon, Walmart.com, Target, etc.

Community and relationship management

In the wake of all that automation and AI offer ecommerce, brand communities and customer advocates remain the most effective means of raising brand awareness and driving conversions online. ecommerce marketers are achieving higher ROI by managing their customer and influencer relationships directly, rather than outsourcing those tasks to agencies.

“Whether you’re creating an influencer program, or a committee, or an online community forum… purpose is the bedrock of everything else… I can say with relative certainty that there will never be a world in which we don’t have more hybrid approaches to gathering people.”

Carrie Melissa Jones on GRIN Gets Real Podcast

Proper relationship management within the context of customer advocacy requires brands to be tuned in to social listening and relevant user-generated content. Marketers must also coordinate influencer campaigns and secure the right agreements to repurpose high-performing UGC from customers, ambassadors, and influencers.

But using manual tools to build and maintain these relationships is overwhelming for brands, including those with a large workforce. Automation tools like GRIN are helping brands of all sizes build long-term relationships with their most influential customers. Not only does this impact brand growth, but it also improves the quality and deliverability of that brand’s products and services.

Ecommerce automation: Pros and cons

Pro: Fewer labor hours and lower long-term costs

Line graph of cumulated costs vs time of manual vs automated testing
Image via Simform

Transcript:

Line graph of cumulated costs vs time of manual vs automated testing. 

Automated testing has a higher initial investment that plateaus over time, while manual testing has a low initial investment but requires more cumulated costs over time. This chart demonstrates the cumulated cost savings of automated testing.

The most obvious benefit of intelligent systems in ecommerce is the reduction in labor hours and costs that results from digitally-transformed processes. Workforces become enormously simplified thanks to sound execution of automation and AI. 

This benefit trickles down to the customer, because managers and team members have more margin to improve sales support and customer service.

Pro: Increased personalization

Automation tools can gather and assess data instantaneously. What that means for ecommerce brands is that they can better understand their customers and tailor their online store and products to their most important customer segments.

Many ecommerce platforms now come equipped with product recommendation features that align with a shopper’s search or purchase history. Apparel companies are also including intuitive tools to make cuts and sizes more accurate (thereby reducing the number of returns).

These personalization benefits also extend to ecommerce content marketing. Marketers can create more relevant content, target niche audiences, and achieve more ROI with their paid media strategies.

Con: Possible reduction in authenticity

A poorly executed automation strategy can cause ecommerce brands to lose their personal touch with shoppers. For example, the main critique of chatbots is that they are limited in their ability to provide individualized support. 

Additionally, using the wrong tools can greatly impact the customer experience and create workflow conflicts for team members.

The key to using automation and AI effectively in ecommerce is timing and maximizing customer touch points. It’s an unwise notion to view automation as replacing human efforts. Rather, smart tools should allow existing team members to dedicate more time toward a true white glove experience for customers.

Con: Intimidating learning curve

Depending on the age and tech skills of a brand’s current staff, incorporating automation and AI can create friction and anxiety. Even user-friendly tools often require a different skill set than do legacy retail systems.

Data table showing automation and AI will accelerate the shift in skills that a workforce needs in the US and Western Europe
Image via Valamis

Transcript:

Data table showing automation and AI will accelerate the shift in skills that a workforce needs in the US and Western Europe.

United States, All Sectors

Total hours worked in 2016 in billions (287)

Skills
  • Physical and manual skills – 90 billion hours in 2016, predicted to decrease 11% by 2030
  • Basic cognitive skills – 53 billion hours in 2016, predicted to decrease 14% by 2030
  • Higher cognitive skills – 62 billion hours in 2016, predicted to increase 9% by 2030
  • Social and emotional skills – 52 billion hours in 2016, predicted to increase 26% by 2030
  • Technological skills – 31 billion hours in 2016, predicted to increase 60% by 2030

Western Europe All Sectors

Total hours worked in 2016 in billions (363)

Skills
  • Physical and manual skills – 113 billion hours in 2016, predicted to decrease 16% by 2030
  • Basic cognitive skills – 62 billion hours in 2016, predicted to decrease 17% by 2030
  • Higher cognitive skills – 78 billion hours in 2016, predicted to increase 7% by 2030
  • Social and emotional skills – 67 billion hours in 2016, predicted to increase 22% by 2030
  • Technological skills – 42 billion hours in 2016, predicted to increase 52% by 2030

Note: Western Europe: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom. Numbers may not sum due to rounding.

Source: McKinsey Global Institute workforce skills model; McKinsey Global Institute analysis

That said, brands that take the time to onboard new tools and team members will eventually become proficient with those tools. Any meaningful digital transformation strategy requires patience and perseverance.

Pro: Fulfillment quality assurance

One of the greatest benefits of automation is its accuracy and consistency. Once administrators set rules and parameters correctly, managers can track product fulfillment using immutable records and don’t have to worry about human error when it comes to payments, inventory management, and shipping.

Pro & con: More ecommerce competition

Advances in ecommerce technology is good news for smaller DTC brands. Armed with the right tech stack, they can compete with major retailers within their region and around the world.