Perspectives | Digital Commerce 360 https://www.digitalcommerce360.com/type/perspectives/ Your source for ecommerce news, analysis and research Fri, 09 Feb 2024 23:02:13 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://www.digitalcommerce360.com/wp-content/uploads/2022/10/cropped-2022-DC360-favicon-d-32x32.png Perspectives | Digital Commerce 360 https://www.digitalcommerce360.com/type/perspectives/ 32 32 3 ways AI transforms the ecommerce customs declaration process https://www.digitalcommerce360.com/2024/02/12/3-ways-ai-transforms-the-ecommerce-customs-declaration-process/ Mon, 12 Feb 2024 14:00:18 +0000 https://www.digitalcommerce360.com/?p=1317205 A smooth customs process is essential for getting ecommerce goods to their destinations in the expected time frames. However, standard customs forms are extremely detailed, with dozens of fields to fill. People are increasingly interested in how artificial intelligence (AI) could streamline things. 1. Completing Customs Forms More Efficiently Even conscientious people make errors when […]

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EmilyNewton

Emily Newton

A smooth customs process is essential for getting ecommerce goods to their destinations in the expected time frames. However, standard customs forms are extremely detailed, with dozens of fields to fill. People are increasingly interested in how artificial intelligence (AI) could streamline things.

1. Completing Customs Forms More Efficiently

Even conscientious people make errors when providing information on customs documents. That might mean they put details into the wrong fields, use the wrong tariff codes to classify ecommerce documents, or make other mistakes, ultimately extending the time frames for parcels reaching their destinations or resulting in the packages getting returned to the senders.

Many optical character recognition tools have AI features to improve their functionality. People can use these options to pull data from electronic paperwork automatically and use it for customs forms.

Phlo Systems is a digital forwarder based in the United Kingdom working on a chatbot to fill out customs forms. Training is underway and responses have about an 80% accuracy rate, showing the solution’s potential. As of November 2023, the company’s CEO and founder expected to complete customs forms with the tool in three to six months.

Although AI can shorten the time necessary to complete customs forms, humans should always supervise the process and double-check the results. Well-trained algorithms are not perfect, so computing power and human oversight are an excellent combination to assist those dealing with exported products.

2. Linking Customer Purchases to Customs Form Data

Businesses may also expand the functionality of existing ChatGPT tools that bring AI to ecommerce, making them improve customs documents, too. Technology ecommerce brand Newegg released a customer-facing ChatGPT tool in July 2023 that suggests products for people wanting to build computers based on details they input about budget, performance requirements and other specifics.

The tool compiles all the options into a list people can review before checking out at the site. It is easy to imagine an accompanying AI product Newegg team members could use to populate customs forms based on what a customer ultimately purchases from the suggested list. Then, the items are more likely to be classified and described correctly on the customs forms. Tariff classifications determine duty rates and taxes on imports, making their accuracy critical.

Ecommerce leaders could also use AI to track trends that enable more accurate customs data. Perhaps a large percentage of overseas shoppers purchase a specific in-demand item and nothing else. AI might accelerate the process by automatically populating the product-specific customs form fields in such cases. Then, there is less to do because people only need to check the information that varies with each customer.

3. Stopping False Declarations and Counterfeit Goods

Possibilities also exist for customs agents to use AI tools to highlight abnormalities associated with illegal goods or items declared incorrectly. Artificial intelligence excels at processing large quantities of information and catching things humans would miss. Many banks use it to monitor for fraudulent transactions because it can detect those instances more accurately than people

If people make false declarations on customs documents, they typically do that to reduce their import tax and duty-related obligations. Many border patrol agents use artificial intelligence to assess which shipping containers to open for further inspection.

Some ships reach ports bearing 24,000 containers, making it impossible to inspect them all. However, the customs officials working at a Belgian port rely on predictive AI models to flag which ones to check. The algorithms make decisions based on customs declarations and data from goods previously requiring inspections.

Even so, illegal goods can slip past border agents, which may result in counterfeit products reaching ecommerce sites. More companies are responding by using or offering AI tools to combat these emerging circumstances.

One enterprise specializing in the luxury goods and sneaker markets built an artificial intelligence-driven product to compare photographs of legitimate items with those sold online. The software compares approximately 2,000 to 4,000 characteristics so consumers or retailers can feel more confident about authenticity.

Some ecommerce marketplaces could use counterfeit protection as a selling point to attract new customers. Suppose first-time visitors to a shopping website sees a banner informing them that all products above a specific monetary value receive anti-counterfeit screenings before getting shipped to recipients. Such a claim gives consumers peace of mind, particularly before buying high-value, unique or collector’s items.

Will Artificial Intelligence Improve Customs Processes?

AI for customs declarations and processing is still in the early stages, with decision-makers from many businesses still in the planning process. However, as more of them try real-world applications, artificial intelligence should make a bigger and lasting impact on paperwork and goods movement. The results could assist ecommerce companies with administrative tasks associated with import and export paperwork, plus support border patrol officials with spotting suspicious cargo or incorrectly declared products.

About the author:

Emily Newton reports on how technology disrupts industrial sectors. She’s also the editor-in-chief of Revolutionized, covering innovations in industry, construction, and more.

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2024 has mounting supply chain issues. Here are new ways to handle them. https://www.digitalcommerce360.com/2024/02/02/2024-has-mounting-supply-chain-issues-here-are-new-ways-to-handle-them/ Fri, 02 Feb 2024 22:20:41 +0000 https://www.digitalcommerce360.com/?p=1316728 Businesses have been carefully watching the state of global supply chains as they have had to maneuver around obstacle after obstacle to ensure they meet the increasing demands of customers. In 2024, businesses will continue to feel the brunt of existing challenges, as well as meet new ones, and it will be critical to anticipate […]

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Yikun Shao - Alibaba

Yikun Shao, head of supply chain for North America, Alibaba.com

Businesses have been carefully watching the state of global supply chains as they have had to maneuver around obstacle after obstacle to ensure they meet the increasing demands of customers. In 2024, businesses will continue to feel the brunt of existing challenges, as well as meet new ones, and it will be critical to anticipate and find new ways to manage these issues while living up to customer expectations.

Crowdsourced delivery allows businesses to scale their shipment operations and achieve delivery timeliness and efficiency.

Of note, nearly four in ten (38%) small businesses think the global supply chain outlook will have a negative impact on their business, according to an Alibaba.com survey, so it will be important to watch for changes throughout the year and monitor for potential concerns.

One of the most pressing challenges the industry faces is a shift of issues from the supply to the demand side. On the supply side, more raw materials are available, and there are fewer transportation obstacles.

However, on the demand side, there has been rising inflation globally, and backlogged inventory, especially in the U.S. and E.U., has led to a decrease in demand, compounded by decreased demand for certain products. While the U.S. saw a return to pre-pandemic consumer holiday season spending in 2023, businesses may still want a more conservative approach and order products in smaller quantities, meaning that meeting shipping requirements may become more difficult. Demand is not able to meet the products that the supply side is able to provide.

On top of this, recovery from the COVID-19 pandemic is ongoing as supply chains are still readjusting from related interruptions. There is more stability, but recovery takes time, especially as new challenges arise.

Mounting Concerns Businesses Should Monitor

Businesses are also facing a number of additional issues that could spell trouble for them throughout the year that they should be watching carefully:

  • Cyber attacks: Threats from bad actors continue to be a growing issue. Small businesses are three times more likely to be targeted by cybercriminals, and the cost of cybercrimes to small businesses reached $2.4 billion in 2021.
  • Labor and government shutdowns: 70% of small business owners say a government shutdown would negatively impact their business, and 93% say it would hurt their revenue. Additionally, labor strikes can also impact small businesses by disrupting vendors or shipping partners.
  • Natural disaster events: With 2023 on track to be the hottest year on record and extreme weather events increasing, supply chains could be increasingly disrupted by natural disasters and unworkable conditions.
  • Panama Canal disruptions: The drought in Panama, largely caused by the El Niño climate phenomenon, has caused major delays and bottlenecks for those in the logistics industry. Scientists believe climate change may be prolonging dry spells and increasing temperatures in Panama. As such, the situation has become dire and expected to continue into at least mid-2024, as the number of ships allowed through the canal will decrease into February.
  • The state of the U.S. economy: 47% of small business owners feel the economy will get worse in the next 12 months, and 58% said their business is being impacted by higher interest rates.

It will be crucial for businesses to monitor these and other issues and adapt as necessary by tapping into innovative industry tools and resources.

Digital Tools Address the Changing Supply Chain Landscape

As supply chain and logistics trends continue to evolve, digital tools can make it easier to manage operations to ensure on-time deliveries. There are a variety of tools on the market that can help businesses stay up-to-date on shipping and inventory processes. Companies can also invest in data analytics programs to assess patterns in inventory management and customer demands. There are even technology offerings that can help model and then execute on needs as supply chains come under greater stress. The goal in utilizing digital solutions like these is to predict trends, streamline processes and increase efficiency no matter the current supply chain landscape.

To make the biggest impact, specifically engineered intelligent tools, like Alibaba.com’s Smart Assistant, are also available, and they can provide better insight into the sourcing process. They can include features surrounding supplier transparency, direct communication with translation, shipment tracking, protections for wrong or delayed orders, and digital inventory awareness. These functions allow businesses to keep tabs on their orders and adjust to changes to time orders accordingly and, most of all, have peace of mind when sourcing their products.

However, employing digital tools is just one avenue businesses can take for upping their supply chain game.

Alternative Shipping and Warehousing Methods

Thinking outside the box when updating your shipping practices can also help to increase efficiencies, meet the growing demand for faster deliveries and stay resilient during supply chain setbacks.

There is a newer phenomenon in the form of crowdsourced delivery. This allows businesses to scale their shipment operations and work with other businesses to achieve timeliness and efficiency in deliveries. This communal form of shipping will continue to grow and become highly utilized in the coming years as technology becomes more widely adopted.

Beyond crowdsourced delivery, the localization of supply chains is also helping keep things closer to home, reduce logistics costs and cut order fulfillment time for small businesses. Localization may take the form of strategically built warehousing networks to maintain inventory closer to major customer bases. Some businesses are also using third-party warehouses, but these can have numerous and complex restrictions, which are constantly evolving. With that in mind, regional warehousing could be a viable alternative.

The world of ecommerce logistics and supply chain is constantly changing, but digitization, localization and omni-channel distribution are the three areas of innovation that businesses should consider taking advantage of. New technologies are bringing more transparency to the process than ever before. While these trends are growing, it will be critical for businesses to stay vigilant and monitor for new innovations and supply chain developments in order to be ready to tackle future challenges and seize new opportunities to evolve and improve their supply chains.

About the author:

Yikun Shao is Head of Supply Chain for North America at international marketplace Alibaba.com.

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For growing ecommerce in Europe, PIM helps adapt to local languages https://www.digitalcommerce360.com/2024/01/25/for-growing-ecommerce-in-europe-pim-helps-adapt-to-local-languages/ Thu, 25 Jan 2024 13:00:50 +0000 https://www.digitalcommerce360.com/?p=1316225 Expanding your ecommerce operations into Europe can be a great opportunity. The region comprises 50 member countries, giving you access to over 540 million potential customers and a market on track to exceed $880 billion by 2028. However, navigating the intricacies of the diverse European markets —each with unique languages, cultures, and consumer preferences — […]

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Sergii Shvets, CEO and co-founder at Gepard PIM

Sergii Shvets

Expanding your ecommerce operations into Europe can be a great opportunity. The region comprises 50 member countries, giving you access to over 540 million potential customers and a market on track to exceed $880 billion by 2028.

However, navigating the intricacies of the diverse European markets —each with unique languages, cultures, and consumer preferences — can be challenging. You need an effective localization strategy for the new markets you are entering, and product information management (PIM) can help.

A PIM is a centralized platform that organizes, enriches, and translates product data so that it resonates with the local market you’re targeting. The PIM market is estimated to grow to $17 billion by 2026, highlighting its crucial role in online business.

This article will explore the advantages of using a PIM for localization and provide best practices for a successful ecommerce expansion in Europe.

Understanding Localization Challenges for Ecommerce in Europe

Whether you run a small fashion store, sell handcrafted items, or operate a big retail operation, you’ll face these localization challenges while navigating the intricacies of the European market:

  1. Europe’s Multilingual Landscape: With its rich tapestry of languages, each European market may have its own preferred language or dialect. Effectively managing content across multiple languages requires precise translation and cultural adaptation to resonate with diverse audiences.
  2. Navigating Cultural Nuances: Cultural differences within European regions significantly impact consumer behavior and expectations. Adapting product messaging, imagery, and user experience to align with cultural nuances is essential for connecting with local audiences.
  3. Meeting Regulatory Standards: Europe enforces stringent data protection and consumer rights regulations, including GDPR. Complying with these rules across different countries complicates ecommerce operations. Balancing legal frameworks while delivering a seamless user experience demands careful consideration.
  4. Payment and Currency Dynamics: There are over 30 different currencies in Europe and a myriad of payment preferences. Effective price localization — implementing a payment system that caters to local preferences and ensures accurate currency conversions — can accelerate your business growth by 30%.
  5. Tailoring Products to Local Markets: Products may require adaptation to meet different markets’ specific needs and preferences. This involves translating product information and considering factors like sizing, labeling, and packaging to align with local standards and expectations.

Benefits of PIM in Localization

As you can see, localization can be a big challenge when expanding into a diverse business landscape like Europe. However, using a reliable PIM tool can help. Let’s see how.

Centralized Data Management

PIM systems are a central hub for organizing and storing all product-related data, ensuring product details, specifications, and attribute consistency across an ecommerce platform. This unified approach prevents discrepancies, streamlines operations, reduces errors, and provides a reliable source of truth for data management — particularly crucial for expansion into a market as diverse as Europe.

Multilingual Content Creation

Given Europe’s linguistic diversity, PIM systems provide multilingual support, making it easy to create and manage product information in multiple languages and supporting the translation and adaptation of product descriptions and marketing materials to meet local audiences’ cultural and language preferences.

It also boasts version control features, simplifying the task of handling multiple versions of catalogs, specifications, and pricing — a requirement for localizing product information — thereby enhancing communication of product value, especially in international sales.

Maintaining Consistency Across Markets

PIM systems help to preserve consistency across diverse markets by centralizing product information, branding elements, and marketing content. This centralized approach ensures a uniform brand presentation across different European regions, regardless of the specific market or language.

Adapting To Cultural Nuances

PIM systems offer features that enable businesses to tailor product information to specific cultural requirements, ensuring relevance and resonance with target audiences in each market. This may involve customizing imagery and promotional material to align with cultural preferences in European markets.

Enhanced Customer Experience

PIM systems are vital in enhancing the customer experience. By centralizing product information, businesses can efficiently manage multilingual content, maintain a consistent brand message, and adapt to cultural nuances. This results in a personalized and user-friendly experience for customers, ensuring they can access accurate information in their preferred language.

PIM systems also help with cross-border selling. They handle currency conversions and customize recommendations and content based on customer data. All of these advantages together foster a positive customer experience, leading to increased conversions and long-term brand loyalty.

Case Studies or Real-Life Examples

So, how exactly does this work? Here are some real-world examples of how a good PIM can help businesses with localization when expanding into European markets.

Sizing and Measurement

A U.S.-based fashion ecommerce platform is expanding to Europe. To align with European standards, measurements will have to change to the metric system used in Europe. For instance, a dress labeled as size 2 in the U.S.A. would be size 34 in most European regions, and a chest measurement of 36-38 inches in the USA corresponds to 91-96 cm in Europe.

Getting all these differences down can be challenging, but a good PIM system will allow the fashion store to showcase product sizes according to local standards, preventing potential returns.

Language and Translation

A beauty and cosmetics ecommerce brand expanding into European markets has to translate and adapt product descriptions to fit each country’s language and colloquial terms. Research indicates that 76% of people prefer shopping in their native language, and 60% rarely or never buy from an English-only website.

To address this efficiently, the brand can use PIM to manage product descriptions. This enables them to translate and tailor content seamlessly for French, German, and Spanish. The goal is to resonate with local audiences, ultimately enhancing customer engagement.

Best Practices and Implementation Tips for PIMs in Localization

So, how can ecommerce businesses effectively implement PIM for localization? Here are some actionable insights, best practices, and tips to consider:

  1. Plan Ahead: Initiate your PIM implementation well before launching in Europe. Early planning reduces the risk of rushed decisions, ensuring smoother integration into diverse markets.
  2. Be Culturally Sensitive: Respect the cultural nuances of each European market. Customize your PIM strategy for language, local preferences, and cultural sensitivities. This ensures positive resonance with diverse audiences.
  3. Consider the Whole Customer Journey: Extend the PIM application beyond product details. Localize marketing content, customer support, and post-purchase communications. A holistic approach provides a seamless and culturally relevant experience, from exploration to post-purchase engagement.
  4. Implement PIM Everywhere: Ensure consistent messaging and data accuracy across all channels —  website, mobile app, social media, etc. This guarantees coherent and synchronized localized content, reinforcing brand integrity and customer trust.
  5. Evaluate and Improve: Continuously assess the effectiveness of your PIM localization strategy. Analyze data on customer engagement, conversion rates, and market-specific performance. Use insights to refine your approach, adapting to evolving market trends and consumer behaviors.
  6. Train Your Team: Equip your team with skills to maximize PIM capabilities. Conduct thorough training on localization, data management, and cultural considerations. A well-trained team enhances the efficiency and effectiveness of your PIM implementation.

To thrive in the diverse European e-commerce market, adopting Product Information Management (PIM) is crucial. The varied languages, cultures, and regulations require a centralized approach for accurate and consistent product information. PIM ensures data precision and simplifies localization, providing a seamless shopping experience.

About the Author:

Sergii Shvets is the CEO and co-founder of Gepard PIM, an ecommerce data transformation company that connects retailers with manufacturers and content providers. He is also the director of technology at Icecat, a product catalog technology provider.

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Voice commerce — the evolution of online B2B ordering https://www.digitalcommerce360.com/2024/01/19/voice-commerce-the-evolution-of-online-b2b-ordering/ Fri, 19 Jan 2024 18:21:15 +0000 https://www.digitalcommerce360.com/?p=1315889 Some digital technologies arrive with fanfare while others enter quietly and become ubiquitous over time. Voice technology is one example of the latter. It gained momentum when developers and users began expanding their views of sound as part of multi-sensory engagement. Voice activation was popularized by Google. They provided a “speech-to-text option” as part of […]

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Kathleen Leigh Lewarchick_Xngage

Kathleen Lewarchick

Some digital technologies arrive with fanfare while others enter quietly and become ubiquitous over time. Voice technology is one example of the latter. It gained momentum when developers and users began expanding their views of sound as part of multi-sensory engagement.

Voice activation was popularized by Google. They provided a “speech-to-text option” as part of their search functionality. And voice activation went from a quiet bleeding-edge technology (think OnStar) to a crescendo of widescale adoption as people began to use (and like) Google Assistant, Siri, Alexa, and others.

Making headway in B2B and B2C markets

It was only a matter of time before voice activation would become a powerful tool in commerce. Voice commerce, or v-commerce, is making headway in both B2C and B2B markets. Its technology twin, artificial intelligence (AI), complements and accelerates this trend.

There are obvious benefits, especially for those who are visually impaired or have diminished motor skills. There are also inherent risks, such as authentication and security. However, more and more voice commerce examples are appearing in the B2B market because of ease and simplicity.

One example is hands-free ordering. A facilities manager might be replacing dirty equipment during scheduled maintenance when he or she recognizes a missing piece. One option is to pause work, clean hands and record the part for an order later. The alternative is voice commerce on the job, where the manager pauses for a voice-activated ordering assist, and then quickly gets back to the maintenance job.

Here’s an example of a voice-commerce shopping experience where the buyer:

● Audibly requests items to be placed in a cart, as pictured here:

Voice-commerce-cart 

● Places the order directly through the integrated order management system.

● And receives system confirmation through voice (and visual) outputs, as shown here:

Voice-commerce-order-confirmation

While there’s no guarantee that the part is in inventory, voice commerce enables the order to be placed hands-free at the direct moment of need.  Not only does this save time, but it may eliminate order errors if the order process is fully automated.

Essential to B2B business growth

Voice commerce, or v-commerce, is no longer on the horizon. Competitively advantaged companies are using it today to help customers save time and effort. And more users enjoy hands-free technology. It is likely that B2B use cases will only grow given the tight labor market and calls for improved productivity. Getting started on the journey of voice commerce is essential to maintaining your B2B business growth.

Kathleen Leigh Lewarchick is the VP of Marketing for Xngage LLC, a B2B digital commerce services company with more than 60 clients across the industrial trades. She is the former PURELL® Hand Sanitizer Brand Director, has co-created automated replenishment products with Amazon Business, and created telehealth solutions for a company that she later helped sell to CVS Health. 

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Editors’ picks: Our favorite stories about online retailers in 2023 https://www.digitalcommerce360.com/2024/01/19/editors-picks-our-favorite-stories-about-online-retailers-in-2023/ Fri, 19 Jan 2024 13:00:59 +0000 https://www.digitalcommerce360.com/?p=1315689 Ecommerce technology is constantly evolving, and online retailers managed to take advantage of that evolution in 2023. Below, we recap some of Digital Commerce 360’s most insightful articles about online retailers from 2023 regarding 10 key coverage areas: Industry news and trends (including the Bed Bath & Beyond saga) Artificial intelligence Digital marketing Exploring new […]

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Ecommerce technology is constantly evolving, and online retailers managed to take advantage of that evolution in 2023.

Below, we recap some of Digital Commerce 360’s most insightful articles about online retailers from 2023 regarding 10 key coverage areas:

  1. Industry news and trends (including the Bed Bath & Beyond saga)
  2. Artificial intelligence
  3. Digital marketing
  4. Exploring new technology
  5. Fulfillment and delivery
  6. Livestreaming
  7. Mergers and acquisitions
  8. Online marketplaces
  9. Payments and fraud
  10. Sustainability

These stories highlight meaningful changes to online retailers’ ecommerce operations in 2023. Most notably, they include new and improved technologies and strategies that online retailers have implemented. We published roundups specifically for some of these coverage areas over the first couple weeks of 2024, and we link to them below. Those topic roundups — about artificial intelligence, fulfillment and delivery, and payments and fraud — include subtopics.

1) Industry news and trends

Silicon Valley Bank’s collapse hit the ecommerce world. See a list of impacted companies.

The bank had a history of investing in ecommerce startups, and Etsy, Shopify, and others had accounts with Silicon Valley Bank. 

Gathering data in the age of privacy 

Learning how to collect and use first-party data is key if retailers are to navigate a world without third-party cookies. 

Data shows online retailers with the highest carbon footprints

Websites emit carbon dioxide emissions (CO2). Recent data shows which retailers top the list of offenders versus those who don’t. 

Retail profitability rebounds but remains pressured by online costs

Retailers’ profits declined from 2012-2019, in part due to the costs associated with online and omnichannel sales, but bounced back during the pandemic, Deloitte says. Cutting costs, including by limiting free shipping and handling returns more efficiently, will be essential to maintaining profit margins.

What ecommerce retailers can learn from HomeGoods exit

Despite giving ecommerce a go, HomeGoods found out that off-price retailing is not well suited for its online sales.

1.5) The Bed Bath & Beyond saga

Amid all this ecommerce news and the largest online retail trends of 2023, one story remained at the forefront for months. Bed Bath & Beyond’s downfall had — and continues to have — a meaningful impact on the retail industry.

Bed Bath & Beyond says it’s not beyond help, but reports further losses

Coming just days after the retailer said it might seek bankruptcy protection, the poor earnings report paints a dismal picture for the beleaguered retailer. 

Which retailers will benefit from Bed Bath & Beyond’s demise?

Bed Bath & Beyond’s bankruptcy presents an opportunity for retailers to cash in on the shopping experience both in store and online. 

Overstock CEO says brand name is a “boat anchor” ahead of Bed Bath & Beyond relaunch

Revenue and other key metrics were down for Overstock, but CEO Jonathan Johnson says the Bed Bath & Beyond relaunch will be a “new phase.” 

Goodbye, hello: Buy Buy Baby preps to be born again

Under new ownership, Bed Bath & Beyond’s former baby-products retailing unit plans an ecommerce and brick-and-mortar revival.

2) Artificial intelligence

Perhaps the most-talked-about subject for months, if not the entire year, artificial intelligence had a resurgence in 2023. Many retailers were already using it — and machine-learning technology — to guide operating processes. But then, generative AI entered the arena at the end of 2022, and it drew global attention to its capabilities. Here’s how some online retailers are leading AI integration into ecommerce.

3) Digital marketing

How are digital marketers using AI to boost conversion?

Artificial intelligence allows digital marketers to quickly test how consumers respond to ads, images and emails. Over time, the algorithm learns, and its predictions become more accurate. Learn how three retailers increased their online sales after investing in AI.

Online flower retailer UrbanStems increases conversion 12% during Valentine’s Day season

Conversion through paid social channels drove that overall increase, growing 83% year over year.

Why wacky ads work on TikTok, while sober is better for Facebook

Four online marketers share ways they curate their brands’ social media content to cater to their target audience on each platform, and explain when it’s OK to repurpose content.

80% of Chico’s customers sign up for its loyalty program in the first nine months

Chico’s updated its loyalty program for the first time in 30 years, and after one year, more than 80% of customers are members.

Lights, camera, conversion: How some retailers use videos to entice shoppers to buy

Online retailers use video to provide shoppers with a rich customer experience that informs, engages and converts.

4) Exploring new technology

Generative AI wasn’t the only new technology to hit retailers’ tech stacks in 2023. Companies dived into the metaverse and other virtual realities. They also took advantage of atypical payment methods and found ways to change business models entirely.

American Girl invests in its virtual museum

The retailer’s digital museum provides content so girls can play, learn more about the brand’s doll characters and create product wish lists.

Crurated’s wine platform uses NFTs and memberships to find a younger market

70% of Crurated’s members using the blockchain wine service are under 45 years old.

Forever 21 caters to Gen Z shoppers with fast checkout, metaverse products

Despite an initially turbulent relationship, apparel brand Forever 21 and payment provider Bolt Financial are now touting positive results from the integration of the streamlined checkout button.

What online retailers can learn from Evite’s business model pivot

Evite’s customer experience suffered because of the company’s reliance on advertising revenue, CEO David Yeom tells Digital Commerce 360. Evite took the lull in parties during the pandemic to overhaul its revenue streams. 

UK crafts retailer uses data to guide website replatforming process

Hobbycraft had to learn what parts of its website did and didn’t make sense for its shoppers, what bugs to work out, and what changes its website wasn’t capable of. And after about 12 years with its previous website, it replatformed in March 2022.

5) Fulfillment and delivery

Online retailers continued learning how to cut and manage shipping costs in 2023. Some major retailers optimized fulfillment and delivery by using stores to fulfill orders, whether via delivering from them or urging customers to use in-store and curbside pickup options. These stories highlight meaningful fulfillment trends among online retailers in 2023.

6) Livestreaming

Natori invests in livestreaming to appeal to new generation of customers

Luxury apparel brand The Natori Co. believes livestreaming will enable the brand to appeal to new customers. 

Orchard Mile takes control by livestreaming its own shopping events

Luxury online marketplace Orchard Mile hosts livestreaming shopping events through its own website rather than other channels. 

Newegg livestreams more than 24 hours a day

Newegg livestreams 30 hours of content on weekdays, which includes livestreams across its six handles and in China. 

Women’s apparel retailer ‘Evereve TV’ attracts shoppers, increases conversion

Evereve staff model clothing and share their styling tips through video on the retailer’s Evereve TV — and it’s boosting sales.

7) Mergers and acquisitions

Although there were many more mergers and acquisitions in 2023, these are some of the most notable ones impacting the industry.

Walmart sells outdoor retailer Moosejaw to Dick’s Sporting Goods

It’s the latest example of Walmart selling off online-focused brands it acquired as it bulked up its ecommerce business several years ago. Moosejaw will be part of the Public Lands outdoor business unit that Dick’s launched in 2021. 

Unilever is selling Dollar Shave Club after seven years

Private equity firm Nexus Capital Management will acquire a 65% stake in Dollar Shave Club, with Unilever retaining 35%. The deal is expected to close by the end of the year. 

UPS to acquire Happy Returns

Happy Returns’ service for online orders will soon be available at more than 12,000 U.S. locations, the CEO of UPS says.

What Sycamore gets for $1 billion to buy Chico’s

Private equity firm Sycamore Partners unsuccessfully tried to buy Chico’s FAS in 2019. Why is Chico’s worth $1 billion? 

Why a serial ecommerce entrepreneur bought Blue Apron

Blue Apron is being sold to Wonder Group, an online food-to-home delivery company, founded by serial ecommerce entrepreneur Marc Lore.

8) Online marketplaces

Michael’s is the latest retailer to add a third-party marketplace

The digital marketplace will quadruple the number of products for sale, with the majority from third-party sellers.

Walmart and Amazon are growing their online marketplaces. Here’s how they compare.

They are both growing the number of third-party sellers on their online marketplaces, but Amazon has a significant lead. 

Selling on Amazon is key for SMBs, but it might not make money

Small and medium-sized retailers say selling on Amazon is a necessary part of customer acquisition, despite added costs. 

Amazon fee change ‘completely out of the blue’ for some Amazon sellers

Amazon announced it will end its Small and Light Program and introduce Low-Price FBA rates for all items priced below $10 (previously $12). 

Prime Day’s mixed message: some merchants boost prices during the event

Last year, retailers raised prices on 13% of top-selling items during the Prime Day promotion, according to new research. And this year, Amazon rolled out invitation-only deals that limit price drops to select shoppers. 

Amazon announces updates to Buy with Prime to stay competitive

Updating Buy with Prime is a way for Amazon to collect data and keep its market share while competing with Shopify.

What were the biggest ecommerce takeaways from Amazon’s Q2 earnings call?

CEO Andy Jassy said Amazon is developing more AI technology, making its fulfillment more efficient and improving its B2B division for business buyers.

EBay rolls out its generative AI listing tool to all marketplace sellers in app

The generative AI tool writes product descriptions for eBay’s app marketplace sellers based on their listing’s metadata. 

Michaels launches MakerPlace online marketplace

Michaels MakerPlace does not charge sellers a listing fee and allows them to sell access to virtual classes and how-to guides. 

9) Payments and fraud

Buy now, pay later was already on the rise going into 2023, when its popularity continued to grow. And as retailers considered implementing BNPL, even if late in the game, they also looked into other ways to make the payments process smoother for their consumers. These stories highlight meaningful payments and fraud trends from last year, showing how online retailers are staying focused on their bottom lines.

10) Sustainability

Grove Collaborative CEO talks sustainable shipping

With a goal to be plastic-free by 2025, personal care and home products brand Grove details ways it makes direct-to-consumer shipping more sustainable.

The secondhand retail industry grew 28% in 2022, according to ThredUp’s latest report

The report shows Gen Z and millennials are growing more open to buying and selling used clothing online. 

How an apparel brand eliminates polybags

Toad and Co. commits to less packaging by sending orders in reusable bags and switching to paper-based polybags that can be regularly recycled.

Bedding brand aims for luxury unboxing without extra tissue paper

Beflax, a small online business, ships its $300 linen bedsheets in reusable packages. The brand wants its customers to have a premium package without extra waste.

Jewelry retailer strives for sustainability on different levels

J’evar uses an in-house generative AI tool to boost its sustainability efforts, which also include using a solar farm to grow its own diamonds.

Archive helps retailers resell their own products

Hanna Andersson customers take advantage of store credit options as they list items on the retailer’s Hanna-Me-Downs resale site. 

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3 must-know CX trends for B2B commerce in 2024 https://www.digitalcommerce360.com/2024/01/11/3-must-know-cx-trends-for-b2b-commerce-in-2024/ Thu, 11 Jan 2024 16:27:15 +0000 https://www.digitalcommerce360.com/?p=1315383 The CRM software market value is anticipated to increase from ~$64B in 2022 to ~$146B by 2029, and 91% of top businesses are investing in AI — with that percentage expected to increase. CX and B2B trends In the fast-evolving landscape of customer experience, the influence of AI stands as a central force, with data-driven […]

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GeertLeeman_SAP-CX

Geert Leeman

The CRM software market value is anticipated to increase from ~$64B in 2022 to ~$146B by 2029, and 91% of top businesses are investing in AI — with that percentage expected to increase.

With business AI, the B2B space can take customer relationships to a new level.

CX and B2B trends

In the fast-evolving landscape of customer experience, the influence of AI stands as a central force, with data-driven innovations ushering in a new era of personalized and interactive experiences. Businesses are gearing up to navigate a dynamic terrain where industry-tailored solutions, connected enterprise insights, and AI-driven personalization converge to create the ultimate customer experience.

Let’s look ahead to 2024 and examine my predictions for how certain technology advancements will elevate customer experience and boost business revenue and profitability.

1. A focus on industry-tailored solutions will improve business outcomes

When it comes to CX — and B2B — trends, it’s not one-size-fits-all. What works for a manufacturing company may not be best for a retailer.

“Generic software often comes with a plethora of features, many of which might be irrelevant for a specific industry,” Kamran Khan, an IT and business development specialist, said. “Tailored solutions, on the other hand, are laser-focused on the exact requirements of an industry, ensuring that every feature and function is relevant and adds value.”

Industry-tailored CX solutions are designed with a deep understanding of a particular industry’s specific challenges and dynamics. This understanding ensures that the CX strategy addresses customers’ unique needs and pain points  within that industry, leading to more effective and relevant customer interactions. This approach improves customer satisfaction, loyalty, and a competitive edge in the marketplace.

2. Unified CX will overtake the siloed approach to customer satisfaction

Nearly two decades of research by multiple analysts shows that anywhere from 20%-70% of CRM projects fail. Why? These systems concentrated on connecting sales, service, and marketing rather than focusing on integration across the entire enterprise.

With an intelligent approach to customer experience, all teams across the enterprise — service, marketing, sales, logistics and operations — speak to each other. Organizations can connect insights like fulfillment business processes with insights from customer touchpoints, like service and commerce. This approach leads to a truly unified and exemplary experience for the customer.

3. AI will drive personalized customer relationships and efficient business processes

In my experience, brands are more likely to make a sale to an existing customer and are significantly less likely to sell to new customers. Therefore, it’s more expensive to attract a new customer than it is to retain an existing customer.

With AI capabilities embedded within CX technology, businesses significantly increase their chances of improving customer retention. By analyzing the full breadth of enterprise data in addition to customer data, such as past purchases, service history, and industry preferences, businesses can provide a better experience for their customers overall. As a result, this drives revenue and increases a business’s bottom line.

Additionally, with business AI, the B2B space can take customer relationships to a new level. We’re finally seeing a pivot from input-heavy, output-poor systems to systems in which business professionals have insights at their fingertips that truly work for them. They’re able to do their jobs more effectively, and ultimately, make their customers happier and more loyal. In all, integrating AI-based technology into CX strategies drives personalized customer relationships, more efficient operations, and empowered decision making at all levels in the organization.

Wrapping up, in 2024, I predict that the B2B market will undergo a dynamic and engaging transformation of customer experience. Organizations that prioritize industry nuances, break down data barriers, and harness the power of AI will find themselves well-positioned to thrive in this dynamic and competitive landscape. The forthcoming year promises a new chapter in B2B interactions characterized by innovation, efficiency, and a scalable customer-centric focus.

Geert Leeman is the chief revenue officer of SAP CX, a software line of SAP SE.

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How did online retailers manage payments and fraud in 2023? https://www.digitalcommerce360.com/2024/01/09/how-did-online-retailers-manage-payments-fraud-2023/ Tue, 09 Jan 2024 21:47:21 +0000 https://www.digitalcommerce360.com/?p=1315247 Retail is all about the money. So when online retailers make payments easier for consumers, those consumers become more likely to shop with them again. That opportunity, however, presents a challenge for retailers to make payments easier for consumers while making fraud difficult for criminals to pull off. Online retailers added buy-now-pay-later payment (BNPL) methods […]

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Retail is all about the money. So when online retailers make payments easier for consumers, those consumers become more likely to shop with them again. That opportunity, however, presents a challenge for retailers to make payments easier for consumers while making fraud difficult for criminals to pull off.

Online retailers added buy-now-pay-later payment (BNPL) methods in 2023, continuing a trend that boomed in 2022. U.S. consumers used BNPL for $8.3 billion in online orders between Nov. 1 and Nov. 27, according to Adobe Analytics, up 17% year over year. Some online retailers even went fully digital, adding cryptocurrency payments to their ecommerce sites. On the flip side, retailers like Lowe’s piloted a way to prevent in-store theft that lead to sales of stolen products on secondary marketplaces. Other retailers added automation to their fraud-detection processes.

Below, we recap some of Digital Commerce 360’s best coverage about online payments — and the fraud attempts accompanying them — in 2023. These stories highlight meaningful payments and fraud trends from last year, showing how online retailers are staying focused on their bottom lines.

What did online retailers do in 2023 to make payments easier for consumers?

Online price matching: pros and cons

Guaranteeing to match the online prices of competitors makes sense in categories like consumer electronics, where it’s easy for shoppers to compare prices on branded products. But one expert says price-matching is less important today now that many big brands limit online discounting. 

Price cuts coming for accepting online debit?

The Federal Reserve is proposing to reduce its price cap for transactions from big debit card issuers by more than 25%. What are the specifics, and what does it all mean for card-accepting merchants? 

Etsy Payments expands to seven more countries

The technology helps both sellers and buyers make relevant options available across the global marketplace, an executive said. 

PayPal usage among Top 1000 retailers up 7.3%

Online payment system PayPal Holdings Inc. is accepted at 82.8% of the online retailers ranked in Digital Commerce 360’s Top 1000. 

Demand for buy now, pay later (BNPL) increases

Apple launches long-awaited Apple Pay Later

Apple throws its hat into the buy-now-pay-later ring with the official launch of its own BNPL service: Apple Pay Later. 

Apple Pay Later threatens other BNPL services, experts say

Industry experts weigh in on how Apple’s buy-now-pay-later service, Apple Pay Later, is an opportunity for retailers to grow their market share. But it is important to be transparent with consumers. 

BNPL is a low-risk option for attracting new customers 

Executives at Overstock and Forever 21 say buy now, pay later lets consumers without access to traditional credit buy their products. But an increase in BNPL payments could lead to a debt problem, experts say.    

Some customers distraught after duplicate charges from BNPL service Affirm

Some buy-now-pay-later Affirm users were incorrectly charged multiple times for their loan payments Jan. 13.

Affirm cuts 19% of workforce, reports losses for fiscal Q2 2023

Buy-now-pay-later vendor Affirm Holdings Inc. cut 19% of its workforce. The BNPL provider reported a loss of $322.5 million in its fiscal Q2 2023.  

Overstock CEO says customers are using BNPL for purchases as low as $10

Younger customers without established credit history are the most likely to use the service, CEO Jonathan Johnson said. 

Ikea adds BNPL late in the game — why?

Ikea added buy now, pay later for orders ranging from $40-$500. Why now and why the $500 limit? The retailer weighs in. 

Consumers embrace buy now, pay later during Cyber 5

Buy-now-pay-later spending reached record levels during Cyber 5, putting November on track to be the biggest month yet. 

Online retailers implement cryptocurrency payment options

Is offering cryptocurrency at checkout worth the reward for retailers?

Cryptocurrency payments are still a nascent payment form for online retailers. And rightly so, as the digital currency is notoriously volatile — the value can change dramatically in any single day. Two top online retailers that accept cryptocurrency payments have outsourced the headache of complying with ever-changing regulations and money-laundering worries to appeal to consumers with cryptocurrency to spend.  

Shop.com: ‘Low cost’ of outsourcing cryptocurrency processing is worth avoiding possible legal missteps

Shop.com says the 1% transaction fee to outsource cryptocurrency processing at checkout is worth it. Offering cryptocurrency gives customers more options to pay, while BitPay ensures the retailer is in line with rules and regulations. 

Watch reseller offers cryptocurrency at checkout to entice international shoppers

A portion of luxury watch reseller WatchBox’s international customers prefer to pay using cryptocurrency instead of wire transfer. While it is a small percentage of the retailer’s total $500 million in online sales, it is an important option, the retailer says.

With payments come fraud attempts. How did online retailers address fraud in 2023?

Lowe’s pilots new way to prevent theft at stores, sales of stolen goods on secondary marketplaces

Lowes’ Project Unlock uses point-of-sale activation and a transparent record solution as a technology-forward and low-cost way to prevent theft at physical stores. But it puts the onus on purchasers to verify if they are purchasing a stolen item in the secondary market.

Sportitude cuts fraud costs by 55%

After switching its fraud prevention technology, footwear merchant Sportitude says fewer transactions are flagged as potentially fraudulent, requiring manual review to approve. But its fraud rate has stayed the same while its costs have decreased. 

Will AI power all of fraud management?

Fraud prevention technology powered by artificial intelligence can improve the fraud-fighting operations for many merchants. Still, most online retailers employ manual review teams to further review transactions the software flags as risky. But some merchants hoping to increase efficiency are looking to eliminate manual review altogether and have AI make all the fraud decisions. 

6 quick tips to manage ecommerce fraud

Ecommerce fraud analysts share tips online retailers can implement to help verify legitimate transactions and block fraudulent ones. 

NRF retracts statement on financial impact of organized retail crime

The NRF removed a statement attributing nearly half of shrink to organized retail crime from a report released in April.

Rainbow Apparel says the biggest challenge in ecommerce fraud is allowing legitimate orders through

Rainbow uses Signifyd’s anti-fraud software and AI to detect and flag potential fraud and allow other orders through. 

How one furniture retailer combats fraud during online checkout

The outdoor furniture merchant Polywood automated its fraud-detection processes at checkout, resulting in higher conversion rates. 

How is Amazon handling fraud?

Amazon is cracking down on counterfeiters, and a legal expert says consumers should be ‘cautiously optimistic’

Ecommerce lawyer Robert Freund says Amazon’s efforts are promising, but it’s nearly impossible to eliminate counterfeits completely. 

Amazon accuses former employees of conspiring with fraud ring

Amazon says seven employees committed fraud by processing illegitimate returns, costing the retailer $500,000. 

How did fraud affect online sales during the 2023 holiday season?

Higher web sales and lower fraud brighten retailers’ holiday

While online sales increased over the Thanksgiving weekend, fraud attempts were down 20% compared to the same period in 2022, says Signifyd, a provider of fraud prevention services. That’s because there has not been a repeat of a massive fraud attack on U.S. online retailers during the 2022 holiday season, Signifyd says. 

Fraud decreases during Cyber 5, ClearSale data shows

At the same time, ClearSale found that from Black Friday to Cyber Monday, order volume decreased 41% year over year. Order amount decreased, too, down 27% year over year. 

VF Corp. discloses cyberattack on first day of new SEC rule

Although consumers can purchase available merchandise, VF Corp. is experiencing operational disruptions as a result of the cyberattack. 

How Everlane fights ecommerce fraud during the holiday season

Online retailers must adjust their ecommerce fraud defenses to take into account that consumers buy more and more frequently during the holiday season, says TJ Stein of apparel brand Everlane. He says clear communication throughout the purchase process can minimize customer disputes that stem from confusion or the shopper not being able to get questions answered. 

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How helpful was artificial intelligence to online retailers in 2023? https://www.digitalcommerce360.com/2024/01/08/artificial-intelligence-generative-ai-2023/ Mon, 08 Jan 2024 22:00:37 +0000 https://www.digitalcommerce360.com/?p=1315102 With more than a full year in the books for generative AI platforms like ChatGPT and DALL-E, retailers have had time to test the technology and see what it looks like when implemented into their businesses. But generative is just part of the equation. The larger, far more expansive field of artificial intelligence entered standard […]

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With more than a full year in the books for generative AI platforms like ChatGPT and DALL-E, retailers have had time to test the technology and see what it looks like when implemented into their businesses. But generative is just part of the equation. The larger, far more expansive field of artificial intelligence entered standard operating procedures in various forms for many online retailers in 2023.

Between artificial intelligence and machine learning, automation in retail is becoming increasingly common. Whereas artificial intelligence refers to technology that can mimic human intelligence, machine learning is different. Machine learning technology enables a program to perform specific tasks and provide accurate results by identifying patterns. And as online retailers continue to use both, the lines can sometimes get blurry, but the results are clear.

Salesforce said artificial intelligence accounted for $194 billion in online holiday sales, primarily through predictive recommendations. And that’s just in November and December. The software provider said artificial intelligence influenced 17% of all online orders in the last two months of 2023.

Below, we recap some of Digital Commerce 360’s most insightful coverage about artificial intelligence (including generative AI) and machine learning in online retail from the past year. These stories highlight meaningful AI/ML trends among online retailers in 2023. Most notably, they include use cases spanning from product design to chatbots and digital marketing, and much more.

What we learned about artificial intelligence in online retail in 2023

Online pet supplements retailer uses AI to appeal to new customers

Online pet retailer Finn invested in artificial intelligence to appeal to specific groups of customers quickly. 

SodaStream uses AI to increase conversions through email, SMS and social media

SodaStream invested in artificial intelligence to determine which ad campaigns would be most successful via email, SMS text and on social media. 

Furniture brand launches negotiation AI chatbot

Thousands of shoppers each month negotiate with Industry West’s artificial intelligence chatbot in hopes of reaching a deal for a product discount.

How SMBs are using AI

Small and medium-sized businesses like men’s grooming retailer Huron are using AI to balance financials easily. The retailer is also balancing how it sells to customers shopping via Amazon versus its direct-to-consumer website. The brand is using plug-ins to upsell. 

Experts say Google’s AI fitting tool presents a big opportunity for retailers

Google’s AI dressing room technology could reduce ecommerce returns and give retailers data to better target consumers, experts say.

Tailored Brands invests in AI to enhance the customer experience

Tailored Brands Inc. invests in artificial intelligence to understand its retail and rental customers for digital and in-store shoppers. 

Machine learning pairs well with AI

Retailer uses machine learning to entice shoppers to click and buy

Online music instrument and equipment retailer Sweetwater increases email open rates and online sales thanks to AI-generated email recommendations. 

AI helps Mars Petcare increase conversion by 30%

Machine learning software enables Mars Petcare to measure how appealing pet food images are to online consumers.

Goat milk skin care retailer is on a mission to be the GOAT of beauty brands

The My Skin Biome tool from Beekman 1802 and Perfect Corp. works directly from the website on a user’s mobile phone. 

Generative AI is still developing, but it’s already producing results for some retailers

Can generative AI help online retailers design better products?

Generative AI has been a key discussion topic all year. Online retailers are already incorporating it into their design processes to come up with new products and variations of existing products. 

AI powers Asian Beauty Essentials  

Adding shoppable products on both English and Spanish blog posts — which are AI-generated — has helped the retailer more than triple its average order value. 

A menswear company uses AI fitting technology to keep returns at a fraction of the industry average

Menswear retailer Otero attributes its low return rate to the accuracy of its online fitting tool using Perfitly. 

Evo to launch ChatGPT customer service chatbot

Impressed with the sophistication of generative AI chatbots, ski and sporting goods brand Evo plans to launch a customer service chatbot in time for the holiday season. 

Newegg launches generative AI product review summary

The generative AI tool creates and publishes a summary of all of the reviews at the top of the customer reviews section on the product detail page. 

Generative AI in retail is too ‘immature’ for implementation, Stanley Black & Decker says

Large tool manufacturer Stanley Black & Decker is looking for a generative AI tool to write product descriptions and speed up its product detail product optimization. But the technology is not there yet. 

Retailers add ChatGPT to their holiday bag of tricks

Generative AI systems like ChatGPT are the hottest thing in tech these days, and some retailers will be showing off the power of the technology during the upcoming holiday season. 

Colgate pilots generative AI tool to improve product detail pages

Toothpaste CPG brand Colgate-Palmolive tests a generative AI chatbot to more efficiently gather analysis to create better-converting product detail pages. 

Why digital marketers should not fear generative AI 

Generative AI is a valuable tool for digital marketers looking to simplify tasks. The technology is a creative reservoir for good and bad — and sometimes outright goofy — ideas. But that’s a good thing when trying to stand out from the competition, retailers say.  

Retailers test generative AI to create product detail page content

Major retailers and consumer brands including eBay, Colgate, Ghirardelli, Newegg and Stanley Black & Decker are using generative AI today to speed product detail page content creation or optimization. While some have AI-created content live today, others are still perfecting their tools before debuting them to the public.   

Ghirardelli taps generative AI to edit photos but not yet to generate images

The chocolate brand’s ecommerce content operations and development manager shares how the major chocolate brand is using AI to make decisions about product detail page images. 

Reseller uses AI to speed up listing process

Queenly uses generative AI to populate product listings from a series of questions answered by online resellers. 

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These were the most important holiday shopping trends of 2023 https://www.digitalcommerce360.com/2024/01/05/2023-holiday-trends-online-retail/ Fri, 05 Jan 2024 18:15:02 +0000 https://www.digitalcommerce360.com/?p=1315116 The 2023 holiday season is now in the rearview mirror. The year distinguished itself from recent years, as consumers and retailers continued to worry less about the COVID-19 pandemic. But retailers had plenty more to consider, thanks to another year of inflation and fears of waning consumer demand. These are the most important trends of […]

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The 2023 holiday season is now in the rearview mirror. The year distinguished itself from recent years, as consumers and retailers continued to worry less about the COVID-19 pandemic. But retailers had plenty more to consider, thanks to another year of inflation and fears of waning consumer demand.

These are the most important trends of the 2023 holiday season, according to Digital Commerce 360’s coverage.

1. Consumers spent despite inflation worries

Analysts spent much of 2023 warning about an economic slowdown. Consumers, meanwhile, were burdened with shrinking savings, resumed student loan payments, and inflation. Retailers shared similar concerns in quarterly earnings calls.

“The sharp deceleration in retail growth is due to stubborn inflation in many sectors, spiking interest rates, a year-over-year decline in COVID-era federal stimulus, and the ongoing rotation of consumer spending from goods to services,” president at retail research firm Consumer Growth Partners Craig Johnson said in a holiday forecast.

Despite these concerns, consumers spent anyway. According to Adobe Analytics, U.S. online holiday spending reached $221.8 billion. That’s in line with Adobe’s projection of $221.8 billion. Online holiday spending in the U.S. grew 4.9% over Adobe’s recorded $211.7 billion in 2022, setting a new ecommerce record. Growth was higher than the 3.5% year-over-year growth Adobe reported in 2022. Adobe classified November and December as the holiday season.

Fraud prevention vendor Signifyd says U.S. holiday sales increased 7% in 2023 over 2022. Signifyd classifies Oct. 1 through Dec. 31 as the holiday season. The security company previously predicted that sales would grow 5%.

Some consumers might have even spent money they didn’t have. Buy now, pay later services like Klarna, Affirm and Afterpay were used to finance more holiday spending than ever this year. That contributed $16.6 billion in online spending, an increase of 14% and $2.1 billion over the same period in 2022. U.S. consumers used BNPL for $9.2 billion in online purchases in November, up 17.5% year over year. Cyber Monday was the biggest BNPL day in history, accounting for $940 million in sales, up 42.5%.

2. The holiday season extended

Holiday shopping started earlier this year. Amazon’s Big Deal Days sale in October kicked the buying season off in earnest. Walmart held a competing Holiday Kickoff Sale at the same time, explicitly marketing the October event as part of the holiday season.

Other retailers felt the pressure to start marketing holiday promotions earlier, too. True Religion launched its holiday campaign in October, earlier than in previous years. The retailer studied consumer behavior and Google search trends, alongside information from consumer research firms like McKinsey and Deloitte.

Meble Furniture made a similar calculation, president Raf Michalowski said. The marketing firm that works with Meble advised the retailer to start the sale earlier.  

“Consumers only have so much money to spend, so you want to get in front of them or they spend it somewhere else,” he told Digital Commerce 360.

Sales and holiday-themed marketing events, such as Big Deal Days, pushed consumers to start shopping earlier in the season, says Kasi Socha, analyst at retail data research company Gartner. Consumers are trending toward shopping for holidays all year long, she says, and Gartner predicts 30% of consumers will shop for winter holiday gifts year-round by 2026.

A November poll from Digital Commerce 360 and Bizrate Insights bears that out. Nearly one-quarter (23.9%) of the 844 consumers surveyed said they started shopping for holiday gifts before September this year. Another 11.1% started in September, and 13.4% started in October. Just 21.9% of consumers waited until the Cyber 5 period or later to start holiday shopping.

3. Online shopping kept growing

2023 proved consumers aren’t willing to give up the convenience of online shopping, even if they feel safe going to stores. The U.S. Census Bureau, as well as the National Retail Federation (NRF) and CNBC’s Retail Monitor, reported that November online holiday spending outpaced in-store sales growth.

Online sales recorded the largest growth of any category measured by Retail Monitor, growing 26.27% year over year. Core retail sales, meanwhile, grew 4.7%. Retail Monitor’s data comes from credit and debit card purchases from consumer data vendor Affinity Solutions. 

The U.S. Census Bureau also reported online sales growth outpacing total retail in November. Nonstore sales, which encompass online sales, grew 10.6% over 2022. That’s significantly higher than total retail sales, which grew 4.1% over the same period. 

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The most interesting ways online retailers tackled fulfillment and delivery in 2023 https://www.digitalcommerce360.com/2024/01/04/fulfillment-delivery-2023-online-retailers-returns/ Thu, 04 Jan 2024 22:33:55 +0000 https://www.digitalcommerce360.com/?p=1315053 Online retailers know how expensive fulfillment and delivery can be. In 2023’s challenging economic environment, they had to find ways to make it work for their consumers — and their bottom lines. That meant being creative with where merchants shipped orders from, and where consumers could pick up their online orders. And even when everything […]

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Online retailers know how expensive fulfillment and delivery can be. In 2023’s challenging economic environment, they had to find ways to make it work for their consumers — and their bottom lines.

That meant being creative with where merchants shipped orders from, and where consumers could pick up their online orders. And even when everything goes right, consumers are still bound to return some of their orders — especially after the holidays. In fact, shipping carrier Pitney Bowes plans to add almost 1,000 drop-off locations through a partnership with PackageHub as the current holiday returns season peaks.

Below, we recap some of Digital Commerce 360’s most insightful coverage about fulfillment and delivery in online retail from the past year. These stories highlight meaningful fulfillment trends among online retailers in 2023. Most notably, they include in-store and curbside pickup, retailers shipping from stores, outsourcing fulfillment to other companies, and the impact returns have on all these processes.

What we learned about fulfillment and delivery methods in 2023

How merchants cut shipping costs

In an era where online shoppers expect free shipping, retailers need to find more profitable shipping approaches, such as by changing packaging, negotiating with shipping carriers, changing shipping schedules or outsourcing fulfillment to a 3PL.  

Home Depot customers opt for ship to home — if the wait isn’t too long

Home Depot invests in its supply chain to cut costs and speed up delivery. As a result, more customers are opting to ship their orders to their homes. 

Keeping customers updated during the shipping process can make or break the experience 

Retailers say more communication is always better around fulfillment as consumers increasingly expect accurate, regularly updated information on their online orders.  

Pickup takes different forms, yet isn’t worth it for some retailers

Committing to curbside pickup — or breaking up with it

Retailers scrambled to launch curbside pickup during the pandemic. But now that many consumers resumed in-store shopping, retailers must determine if offering curbside is still worth it. 

Will alternate package pickup points take off?

Some retailers allow online shoppers to ship products to locations other than their stores or shoppers’ homes. The alternate fulfillment option can reduce package theft and offer convenience, but leaves the customer experience at pickup outside of the merchant’s control.

Office Depot delivers on 20-minute BOPIS promise

The office supply chain can have an order ready for pickup 20 minutes after shoppers order it online 98.9% of the time. 

Walgreens commits to pickup and delivery customers: ‘they spend more money with us’

Lindsay Mikos, senior director, retail omnichannel at Walgreens, told Digital Commerce 360 more than half its digital orders are same-day pickups. The retail chain’s omnichannel services were critical during COVID-19, but now, Walgreens customers continue to want the convenience of shopping online and either picking up in-store or having orders delivered to their homes. 

Tractor Supply 2022 conversion for BOPIS and curbside is 60% higher than home delivery

In 2022, Tractor Supply Co.’s conversion for buy online, pickup in-store and curbside orders was 60% greater than home delivery. 

Some retailers save on costs by shipping from store

Why some retailers use — and avoid over-using — stores as fulfillment locations

Today’s shopper is a hybrid in-store and online shopper. Retailers face logistical and fulfillment challenges to ensure inventory is there. Three retailers strategize how to divide orders between warehouses and stores to efficiently meet shopper demand. 

Apparel retailer Vince ‘pulls the lever’ on and off to use stores to fulfill orders

Apparel brand Vince LLC invested in software to navigate buy online, pick up in-store services, resulting in a 7% increase in BOPIS sales. 

Destination XL Group uses stores to help promote its website

Big and tall men’s apparel retailer DXL increased online sales 9.9% in fiscal 2022, which ended Jan. 28, compared with 2021. By cutting back on the brands it carries and selling private-label merchandise on marketplaces like Amazon.com, the retailer plans to continue to expand its ecommerce presence. 

Aviator Nation automates returns, uses stores to fulfill online orders

The California 1970s-inspired leisure wear brand Aviator Nation decreased its refund rate 11% by automating returns. The retailer also fulfills online orders through its 17 store locations. 

Outsourcing fulfillment can make it faster and cheaper

What is 4PL, and does your ecommerce business need one?

Family farm Palouse Brand cut fulfillment costs by 20% by working with Ware2Go, a fourth-party logistics UPS company, to streamline shipping. 

As orders mount, online men’s skincare brand outsources fulfillment, sells on Amazon

As demand grows, online retailer Black Wolf Skincare opts to outsource its fulfillment services and expand its reach by selling on Amazon. 

PacSun pilots RFID to improve inventory accuracy, reduce split shipments

With products tagged with RFID, PacSun store employees can quickly count inventory several times a week, a large increase from a few times a year. 

Retailers expect returns after holidays, but how do they handle them?

Online returns outpace in-store in 2023, NRF report finds

Online sales have an even higher rate of returns than in-store sales in 2023, according to a report from the NRF and Appriss Retail. And about 13.7% of returns (of online and offline orders) were fraudulent.

Retailers are in for a ‘tsunami’ of holiday returns this year: Salesforce

Holiday returns typically spike following Cyber 5, and then again right after Christmas, says David Sobie, CEO of Happy Returns.

How returns can be a retail ‘superpower’

A returns management CEO explains the valuable data behind returns. 

Retailers revisit return policies ahead of the holiday season

Retailers give shoppers an average of 30 days to return their products, and a large majority of retailers plan to make their return policies stricter in 2023, according to Salesforce data. 

Loop processes 60,000 returns a day during 2022 holiday season

The return-management software company said Dec. 27 was its busiest day, with 68,000 returns processed that day. 

Amazon will charge for some UPS returns, warn customers about frequently returned items

Some customers will have to pay a $1 fee to return orders at a UPS store if they have other options closer to home. 

Holiday returns decline as retailers raise fees

Return fees are more common, but extended returns windows are, too. 

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The post The most interesting ways online retailers tackled fulfillment and delivery in 2023 appeared first on Digital Commerce 360.

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