In North America, 45 of the Top 1000 online retailers use Shopify as their ecommerce platform. The Top 1000 is Digital Commerce 360’s database of the largest online retailers in the region by annual web sales. In 2022, those 45 online retailers combined for more than $8.29 billion in web sales. Retail clients include Fashion Nova (No. 115), Figs Inc. (No. 173), Nine West (No. 252) and Steve Madden Ltd. (No. 262).

These are the most important updates Shopify released in its Winter ‘24 Edition.

Shopify conversion updates

Shopify said it improved how it lists products with the biggest update to its product model in more than a decade. Now, products that come in multiple variations can be purchased under a single product listing. The updated model also reduces the time and effort that go into creating new product listings, Shopify said. The product page can now automatically categorize listings by features like color and size, eliminating the need to categorize them manually. Customers can also find products based on these attributes, it said.

The checkout page also got an update, Shopify said. The platform streamlined the checkout experience, reducing three pages to just one that customers must interact with. That cut buyer completion time by an average of four seconds, it said. Shopify added 14 new APIs and 90 new apps retailers can use to customize their checkout pages. The new apps allow for features including loyalty programs, post-purchase surveys, order tracking and other customizable content.

Shopify released a new semantic search tool using artificial intelligence (AI), too. The storefront search feature uses AI to surface results consumers are more likely to buy from, rather than exactly the keywords they searched, Shopify said.

Shopify channel updates

Shopify said some of its new updates were designed to make it easy for retailers to expand into new marketplaces and social channels. One such update is point-of-sale ship from store. Retailers will be able to select a store as the fulfillment location for an order through Shopify, so staff can pack and ship the order directly from the location. In-store fulfillment can increase efficiency, reduce warehouse load, and minimize shipping costs, Shopify said.

The platform also released Markets Pro to U.S. customers. The product bundle is designed to make selling internationally easier for U.S. retailers as a hub for help on global taxes, international shipping labels, customs, and more.

New marketing releases

Shopify says Shopify Audiences will “help you find more customers, lower customer acquisition costs (CAC), and improve return on ad spend (ROAS).” The app gives retailers the ability to target consumers on social platforms like Meta, Snapchat and TikTok. Then, Shopify uses machine learning (ML) to improve advertising targeting. This edition of Shopify Audiences includes benchmarks for measuring results against similar retailers and industries, Shopify said.

The platform also announced it will rebrand Shop Cash as Shop Campaigns. The customer acquisition tool will add new estimates and analytics in this update, Shopify said.

Business operations updates

Shopify said it’s using AI on several new releases to simplify retailers’ business operations under the banner “Shopify Magic.” 

Media Editor uses generative AI to create instant product images for free, Shopify said. The editor tool can create professional-looking images and enhance low-resolution files into high-quality media assets, it said.

Sidekick, meanwhile, will be “the world’s most useful AI-enabled assistant for commerce,” Shopify said. “It allows you to use AI to increase productivity, improve workflows, make smarter decisions, and spend less time on operational tasks.” The tool is in an early access rollout with select retailers. Shopify did not share when results will be available, or when other customers will get access to it. It previously demoed Sidekick answering retailer questions, such as “How do I set up a discount for my holiday sale?”

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Hiatt joined Vera Bradley in January 2023. The accessories retailer also has a fairly new CEO and chief financial officer. The relatively new leadership team presents a chance to make positive changes to the brand and connect with new consumers this year, she said.

“We will really use this as an opportunity to reconnect with what people love about the Vera Bradley brand and make sure that we are modernizing that for today and reaching those new generations,” she said.

Vera Bradley ranks No. 277 in the Top 1000, Digital Commerce 360’s database of North America’s largest online retailers by web sales.

Vera Bradley’s TikTok strategy

Modernizing the Vera Bradley brand is a key focus in 2024, Hiatt said. One way to do that is by embracing TikTok. The online video platform has become a driving force behind how young consumers make purchasing decisions, according to research from Morning Consult.

Vera Bradley sees benefits from TikTok without directly needing to post.

“We’ve really benefited recently from a lot of organic TikTok related to Vera Bradley,” Hiatt said.

Videos with “#VeraBradley” have 105 million views to date on the platform, leading to better brand awareness. It also works directly with influencers on posts.

“Most brands have to work with influencers in some form or fashion. I think it’ll continue to be a strong trend,” she said.

Influencers with smaller followings can be more impactful, she explained, but there are also times to go with a larger influencer.

“It really depends on the type of messages you’re trying to send. Are you introducing yourself to new people? Or are you furthering a connection with your existing customers? And that would really dictate when you would go big or not,” she said.

Vera Bradley will invest more in influencer marketing in 2024 than it did in 2023, she anticipates. Joining TikTok Shop is the logical next step.

“We know more and more people are discovering brands and interacting with their favorite brands” on TikTok, she said. “So why not just make it an easy experience if they find something that they want to buy via TikTok Shop?”

TikTok Shop launched in the U.S. in September 2023. Vera Bradley is treating it like any other marketplace and spent time watching competitors before its own launch, Hiatt explained.

Other ways to reach new customers

Collaborating with other brands is another way to expand Vera Bradley’s reach, Hiatt said.

“Finding pockets of things that people are passionate about, whether it’s Disney or Peanuts, or the NFL, has been really fun and has really reached a broad spectrum of different customers,” she said, referring to Vera Bradley’s collections incorporating those brands.

The accessories retailer has to find ways to work with the other media brands that are true to Vera Bradley’s bold and bright patterns it’s known for, she said.

“We’ve always been a multi-generational brand, which was very rare. And we will continue to speak to all customers but want to make sure that we’re continuing to introduce ourselves to newer generations,” Hiatt said.

Collaborations with other brands are successful in bringing in new customers, who then turn into repeat customers, she said without revealing more.

Hello Kitty, Shark Week and Harry Potter collaborations have been particularly successful at bringing new customers to Vera Bradley, CEO Jacqueline Ardrey told investors in a third-quarter earnings call in December.

Vera Bradley took advantage of changing consumer habits

Vera Bradley hasn’t reported results from its fiscal fourth quarter yet, which will include the holiday season. Consumers were pickier this year when it came to holiday shopping. “They were really shopping around and maybe waiting a little bit longer to decide what they wanted to get,” she said.

The retailer has adapted to changing consumer preferences over the last year with an emphasis on travel. Much of the consumer spending growth in recent quarters came from spending on experiences, rather than goods. Vera Bradley used that as an opportunity to grow its travel accessories, Hiatt said. While that includes suitcases, it was also advantageous to expand their idea of what travel is.

“We will continue to focus on travel, but we’re also expanding how we think about travel. There’s the traditional suitcase on an airplane, but also people are taking longer weekends and road trips,” she said.

That’s an opportunity for duffel bags, travel organizers, toiletry bags, and other products beyond suitcases. 

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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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Digital Commerce 360 followed the most important stories discussed on the Javits Center floor in New York City. These are the top ecommerce stories from NRF day three.

Tractor Supply shares AI applications

Tractor Supply Company CEO Hal Lawton started off the day with a keynote session about the retailer’s rapid growth. The chain nearly doubled revenue since the pandemic, and it just reached $1 billion in ecommerce sales, he said.

Lawton also addressed one of the biggest topics of the conference: AI and its applications for retailers. He likened the discussion around AI today to conversations retailers had about the internet in the early 2000s. This time around, though, retailers aren’t asking “When is this going away?” — but rather, “How can we use this?”

Tractor Supply Co. is already using AI in several ways, both customer-facing and behind the scenes. The retailer is using AI to write marketing copy as well as machine learning in supply chain and inventory replenishment.

Customer service is one of the largest applications for generative AI at Tractor Supply so far, Lawton said. It used Microsoft’s Azure OpenAI toolkit in its internal GURA customer service platform. GURA uses AI to scrape Tractor Supply’s web and training materials. Then, workers can ask questions about customer inquiries, such as “What dog food is good for sensitive skin?” It then answers with specific SKUs available in that store, and can answer follow-up questions to narrow down the results.

Tractor Supply also uses computer vision to allocate labor in stores more effectively. Security cameras located over the checkout use machine learning to determine if another cashier is needed based on how many customers are in line and how many items they have. 

Tractor Supply is No. 99 in the 2023 Digital Commerce 360 Top 1000, a ranking of North America’s leading retailers by online sales.

Saks addresses organized retail crime

Saks president Marc Metrick ended his session by addressing crime, a topic that other speakers addressed less directly throughout the show. Metrick called organized retail crime a “huge issue” facing his business and luxury ecommerce more broadly. These crimes directly impact consumer experience in a negative way, he says. 

Retailers like Saks have to “put plexiglass over the experience online,” he said, akin to measures taken by retailers like Walgreens in stores, where products are locked behind glass to combat theft. In practice, that means putting additional roadblocks in front of consumers for customer service help, he explained. Walgreens is No. 19 in the Top 1000.

Customer service reports of “merchandise not received” more than doubled in just a few years, Metrick said. In the past, Saks would give that customer a refund or credit for the purchase that never arrived. Now, the retailer has invested in wider fraud protections to determine if that customer has made other similar complaints or has a history of returns.

In December, the NRF retracted a previous statement on the financial impact of organized retail crime. The organization previously attributed nearly half of total retail shrink to the issue in an April 2023 report.

“We stand behind the widely understood fact that organized retail crime is a serious problem impacting retailers of all sizes and communities across our nation,” a spokesperson from the NRF told Digital Commerce 360 in December. 

Saksfifthavenue.com is owned by Hudson’s Bay Co., which ranks No. 28 in the Top 1000. 

Retailers try to emulate strategies of Shein and Temu

U.S. retailers can learn important marketing lessons from Shein and Temu, Jason Goldberg, chief commerce strategy officer at the Publicis Group, told attendees. Both retailers have strong paid and organic social media driving their growth, he said. A diverse affiliate program is behind many of these posts on platforms like TikTok, and drives sales, says Coresight Research CEO Deborah Weinswig. 

Shein and Temu are also adept at gamifying shopping, Weinswig said. She pointed to features like virtual gift boxes, spinning wheels for discounts, and awarding points to customers for making purchases and leaving reviews. 

Goldberg praised the way Shein and Temu created trust with U.S. consumers as unfamiliar brands. Both offer free shipping and returns, and a shipping on-time guarantee. Making these promises to consumers helps make the case for purchasing from them versus a legacy brand, he says. 

Goldberg warned U.S. retailers not to discount Shein and Temu as real competitors, especially as they expand into new categories. 

Shein is No. 2 in Digital Commerce 360’s ranking of ecommerce retailers in Asia. Temu, which Pinduoduo owns, launched in 2022 and isn’t yet reflected in rankings. Pinduoduo operates an app-only marketplace for Chinese consumers. Because it doesn’t operate an ecommerce website, it is not included in Digital Commerce 360’s Asia Database.

Catch up on Digital Commerce 360’s other daily recaps from the 2024 NRF Big Show:

• Here’s what you missed from NRF Day 1.
• Here’s what you missed from NRF Day 2.

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Digital Commerce 360 was on the floor at the Javits Center in New York City to follow these and other important ecommerce topics, as well as the retail leaders discussing them.

Here’s what you need to know from NRF day two:

Magic Johnson started the day

Earvin “Magic” Johnson kicked off the day in conversation with Walmart U.S. CEO John Furner. Johnson is chairman and CEO of Magic Johnson Industries. He discussed the applications of lessons he learned as a star basketball player to his more recent work as an entrepreneur.

Johnson referred to the date as Martin Luther King Jr. Day. He credited Dr. King’s work in paving the way for him to be at NRF today and at the helm of his business.

The rise of retail media networks

Retailers are looking for options as they seek to leverage resources for additional revenue. Retail media networks have emerged as one such area of focus. Retail media networks at large will pursue some version of Amazon’s flywheel with media, advertisements and commerce, said Andrew Lipsman, principal analyst of retail and ecommerce at Insider Intelligence.

The greatest opportunity for retail media networks is in stores, he said. In-store attribution of sales to those ads is lacking, but that’s a place retailers can improve.

“Physical retail is the new TV” for advertisers in terms of scale, brand safety and reaching the right audience, Lipsman said. 

Walmart has a wider reach than the largest TV network, said Ryan Mayward, senior vice president of retail media sales at Walmart Connect. He explained that retailers are increasingly allocating their marketing budgets to in-store uses. Walmart is experimenting with new ways to advertise in stores, including on TV screens in the electronics section, on screens in the deli and bakery sections, and on self-checkout screens. 

Jonathan Lustig, head of revenue at Walgreens Advertising Group, echoed the point. With retail media networks, “every Walgreens store becomes a distribution center,” he said. 

Walmart ranks No. 2 in the 2023 Digital Commerce 360 Top 1000. The Top 1000 is a ranking of North America’s leading retailers by online sales. Walgreens ranks No. 19.

Expectations for 2024

The state of the economy in 2024 was a consistent topic of conversation, too. Jack Kleinhenz, chief economist at the NRF, described his opinion as “guarded optimism” on the economy this year. While there might be a shift down in growth from last year, there won’t be negative growth in 2024, he expects. However, a single negative quarter is possible, in his view.

Economists and analysts present said they were optimistic about consumer spending and consumer sentiment. Consumers remained resilient in the face of what could have been significant headwinds last year, said Brian Nagel, senior research analyst at Oppenheimer and Company. That resulted in a better-than-expected holiday season, he said. Kleinhenz also expects consumer spending through 2024 will continue to be supported by job growth.

Nevertheless, retailers and analysts are keeping potential threats in mind. The economy is definitely not in the clear, Nagel said. Earlier in the day, Furner mentioned inflation, interest rates, geopolitical strife, and crime as issues that keep retailers worrying. 

Steve Liesman, CNBC senior economics reporter, told NRF attendees that the economy is most likely going to be okay and not face a recession in the near term. He believes the U.S. and global economies are still correcting post-COVID.

Here’s what you missed from NRF Day 1.

See the other NRF stories Digital Commerce 360 is following here. 

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The announcement offers a glimpse of what Disney plans to do with Hulu. It reached a deal in 2023 to acquire the stake previously owned by Comcast.

“With the most scale in streaming and the strongest audience signal through our foundational data and ad tech stack, Disney is uniquely enabled to power dynamic ad experiences that connect consumer interest and intent to the purchase — straight from the stream,” said Jamie Power, senior vice president of addressable sales at Disney Advertising.

Disney is No. 100 in the 2023 Digital Commerce 360 Top 1000, a ranking of North America’s leading retailers by online sales.

How will Disney shoppable TV work?

Viewers will see personalized advertisements for products that are sent to phones through push notifications or email, Disney says. Over the next few months, Disney will grow the interactive shopping features in streaming, it says. 

The beta test will initially be available exclusively on Hulu, which Disney now owns, with plans to add Disney+ in the future.

Disney named Unilever as one of the advertisers included in the initial beta test. The media company is searching for other retailers and consumer packaged goods companies to advertise, Ad Age reported.

Gateway Shop is an expansion of Gateway Go, launched on Hulu in 2020. The earlier feature gave viewers the option to get more information on an advertisement sent to their phone through push notifications, email, or a code. Since then, more than 200 advertisers across categories have signed on. 

“Our goal is to help audiences connect with the brands they love with the least amount of friction, without disrupting the content they’re streaming. Innovation is in Disney’s DNA, and in a cross-screen world, we believe shoppable experiences not only complement, but elevate, streaming,” Power said.

Why are retailers investing in shoppable TV?

Consumer behavior is changing, Disney says. Most viewers watch TV with a second screen in their hands or nearby. Most of those consumers will choose to interact with a video experience if given the choice, Disney says. The media giant cited a 2023 survey finding that 75% of TV viewers prefer an interactive TV ad over a standard commercial. 

“Gateway Shop is a prime example of the holistic approach we take to building viewer-first ad experiences and formats,” said Amy Lehman, senior vice president of advertising platforms. “Audience behaviors have changed, and advertising should reflect that and serve both viewers and marketers in new ways. Gateway Shop provides viewers with choice and control, in an engaging and non-disruptive format.”

Amazon (No. 1 in the Top 1000), Walmart (No. 2), and Home Depot (No. 4) are all experimenting with shoppable TV, too. Amazon tested shoppable ads during the first-ever Black Friday NFL game it streamed this year. Walmart inked a deal with NBCUniversal in November to place shoppable ads on the streaming platform Peacock. The ads gave consumers the chance to buy Walmart items featured in select Bravo shows. And Home Depot released a branded content series with Vizio in 2023.

57% of ad agency professionals believe shoppable video content is the next frontier of retail media, according to an April 2023 poll from Insider Intelligence.

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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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The technology plays a role in how consumers decide what to purchase, and in how retailers facilitate those purchases. In addition, sellers use it to improve customer service and fulfillment efficiency. And the impact is already significant. Salesforce says that AI influenced 17% of all online orders made in November and December. It also says AI accounted for $194 billion in sales over the holiday season.

Salesforce arrived at that figure based on analysis of shopping data from 1.5 billion shoppers, says Rob Garf, vice president and general manager of retail. 

AI product recommendations are getting more accurate

Predictive AI for product recommendations was by far the most common use case for the technology, Garf says. Retailers have been using AI to make product recommendations for years, he explains. As the technology matures, it makes better recommendations that consumers actually use.

“AI is really only as good as the data that it is fed, and from our point of view, that data lives predominantly in a retailer’s own four walls,” Garf says.

Retailers have access to data about their customers’ preferences, shopping history, brand allegiance, return history and more, he states, so it’s all about using that data most effectively.

“Our research shows on average, consumers experience nine different touch points in any given shopping journey,” he notes. “So what AI is doing is helping smooth out that shopping experience by helping both the customer directly and as it relates to their shopping experience and the frontline employee.”

AI frees up employee time

Retailers also began to dip their toes into generative AI for more creative tasks, Garf says. He points to Salesforce clients using generative AI to create subject lines for email marketing campaigns over the holidays. An employee still oversees and edits the text, but doesn’t have to do the initial drafting. 

Verlo Mattress took a similar approach in the months leading up to the holidays, says Ira Klusendorf, vice president of marketing at Verlo. The mattress retailer prioritizes responding to online reviews within 24 hours as a key part of its customer engagement strategy. However, that can be time-consuming.

“Creative writing takes time. So the AI helps you be creative and effective [in a shorter amount of time],” he says.

Verlo uses generative AI to create appropriate responses to reviews, which are about 98% accurate to the brand’s voice, he explains. “We played with the brand voice,” which the brand uses “across the board,” he says. Verlo is now experimenting with AI-generated social media posts that could further free up employee resources to focus on other tasks.

Retailers use AI to be more efficient behind the scenes

In some cases, consumers weren’t necessarily aware of the extent to which AI was involved in their holiday purchases. For example, many of the largest online retailers incorporated AI across their fulfillment and logistics networks.

“[AI] is meant to be something you don’t see or feel, but it’s as critical as oxygen,” says Scott Hamilton, vice president for last-mile delivery routing and planning technology at Amazon, in a press release. “When you don’t realize it’s there, that means it’s working perfectly.”

The online retail giant uses AI to forecast what products will be in demand and coordinate which items to stock in which warehouses. Then, AI-enabled robots sort and inspect millions of packages at these warehouses before they’re loaded into delivery vehicles. The robots are trained using generative AI, which creates simulations of scenarios they might encounter during busy shopping periods, according to Amazon. That same technology allows the robots to map out Amazon’s fulfillment centers and become more efficient at navigating them as time goes on.

Walmart uses AI similarly, senior vice president of end-to-end fulfillment Parvez Musani says in a blog post detailing the company’s AI holiday plans. Walmart trains its AI using historical shopping data, online searches and page views to forecast demand and stock products appropriately. 

“We also consider ‘future data’ such as macro-weather patterns, macroeconomic trends and local demographics to anticipate demand and potential fulfillment disruptions,” Musani writes. “With this combined data, our engines identify and correct discrepancies, inefficiencies, or inaccuracies in supply chain models.” 

The system works in reverse, too. Walmart’s AI technology is sophisticated enough to disregard anomalies, such as highly unusual storms, to prevent muddying the data. 

Amazon ranks No. 1 in  Top 1000. The Digital Commerce 360 database ranks North America’s leading online retailers by their web sales. Walmart ranks No. 2.

Consumers were open to AI this year

While retailers actively incorporated AI into more parts of the selling process, consumers also showed interest, proving themselves willing to engage with the new technology. They had high expectations, too. 76% of respondents to a Talk Survey poll in November said that they expected to make fewer returns of holiday purchases because AI would help guide their purchases.

88% of consumers said they would use AI in some way for holiday purchases in the survey. That included chatbots and personalized recommendations, which were the most common applications for AI, according to Salesforce.

Consumer experience with AI in the 2023 holiday season might have implications for future uses. 68% of online shoppers say they would lose trust in a brand if it gave them poor recommendations. 53% said the experience would stop them from shopping with the retailer again.

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What’s in the November 2023 edition of Strategy Insights?

Most of the time, that’s through images. In a Digital Commerce 360 and Bizrate Insights survey of 999 online shoppers in October 2023, 52% of online shoppers say multiple product images are important to delivering a well-designed and functional online experience. That’s second only to detailed product descriptions, with 58% of shoppers citing this. The infographic “What consumers love, and don’t love, about online shopping” visualizes all of the results from this survey. It includes:

• Online shoppers’ largest frustrations with online shopping
• How they shop on mobile
• Customer service woes
• Personalization preferences

While images and descriptions are table stakes, a robust online customer experience goes well beyond this.   

For example, the amount of retailers using video has grown tremendously, which the article “Lights, camera, conversion: How some retailers use videos to entice shoppers to buy” showcases. Featured in the article is The Home Depot Inc., which publishes several videos on a single product page, each catering to its different shopper personas, says Michael Newsome, the home improvement chain’s senior director of category experience.  

Enhancing the customer experience

Another way retailers work to enhance the customer experience is through blog and editorial content. This area of the website works to give shoppers more information about the products they are buying or the brand they are shopping from. It can help increase conversion, and retailers say it can boost their SEO value. The article “Retail blogs can deliver sales but only with a strategic plan” details the wins and pitfalls of operating an on-site blog.   

Many retailers also work to enhance the customer experience with free loyalty programs. They give shoppers perks and is a lucrative way to entice acquired shoppers to spend even more with a brand. The article “Successful loyalty programs give consumers an incentive to spend more” features three exclusive interviews with executives from major retail chains Chico’s, Michaels and Sephora. They share insights on how they drive their millions of loyalty program members to spend even more.   

And lastly, all this would all be moot if the retailer’s site doesn’t load quickly. Shoppers, especially on mobile, will abandon the site and their purchase. The article “Retailers are building mobile websites to meet consumer demand for interactive features” details how merchants build robust mobile sites without dragging down the speed.    

 The November Strategy Insights “How Retailers Create the Best Customer Experience” contains these feature-length articles. Download the free PDF here. 

April Berthene 
Editor, Strategy Insights   

The post Retailers strive to provide a rich online customer experience   appeared first on Digital Commerce 360.

Artificial intelligence was already a key technology for retailers to implement going into 2023. And then generative AI boomed.

Retailers had to start exploring how they could integrate generative AI into their ecommerce sites while keeping up with all the technology they had planned to invest in for the year. And so, Digital Commerce 360 conducted its annual technology survey. It asked about what online retailers would invest in, how much, how that compares to the previous year, and more. Digital Commerce 360’s 2024 Leading Vendors to the Top 1000 Retailers Report details the survey’s findings.

The 2024 Leading Vendors report shows which ecommerce technologies online retailers have implemented — or abstained from — including:

• Artificial intelligence (with a subsection on generative AI)
• Ecommerce sites and platforms (with a subsection on fraud)
• Online marketplace management
• Email and digital marketing
• Fulfillment, with subsections on:
  • Omnichannel
  • Sustainability
  • Subscriptions

Key findings in the Leading Vendors 2024 report

According to Digital Commerce 360′ technology survey, well over half of retailers (62.8%) plan to increase their ecommerce technology and services spending next year. More than a fifth (22.9%) plan to spend the same amount on ecommerce technology next year. Meanwhile, just 14.3% plan to decrease their ecommerce technology spend next year.

Of those who said they planned to increase their ecommerce technology spending, not even a quarter (24%) said they would spend at least 15.1% more than in 2023. Just 3% of respondents said they would spend 50% more on ecommerce technology in 2024 compared with 2023.

Moreover, nearly a third (30.3%) said they would spend no greater than 5% more on ecommerce technology in 2024 compared with this year. A 15% increase in spending is the limit for about three-quarters of respondents.

2024 Leading Vendors to the Top 1000 Retailers Report

Analysis of the leading vendors that serve North America's Top 1000 online retailers. Includes rankings of the Top 10 leading vendors across 24 categories, including Customer Relationship Management, Ecommerce Platforms, Fulfillment Services, Marketing Automation Platforms, and more.

View Details

What kinds of technology are online retailers investing in most?

Digital Commerce 360 asked retailers in the Leading Vendors 2024 report what they found most important to spend on in 2024 when it came to ecommerce technology. At the top of the list, retailers equally prioritized improving the customer experience and improving conversion rate — naturally, the two go hand in hand.

Meanwhile, there was another tie for the next most important reasons for increasing ecommerce technology spending in 2024. Retailers said they want to better attract customers, better personalize shopping experiences, and improve site performance (including speed and efficiency).

Although more than 40% of retailers said they want to increase their technology spend to attract new customers, not even a third (30%) said they’re increasing spending to retain customers. Just over a quarter (26.7%) said they want to increase spending so they can generate more sales from repeat customers. The same number, however, said they want to support more cross-channel shopping.

At the same time, mobile seems to be less of a priority. Less than a quarter of respondents (23.3%) said they want to use increased technology spending to improve their mobile shopping experience. And not even a fifth of respondents (16.6%) said they want to use their increase in tech spending to generate more traffic and sales through mobile commerce.

What are the biggest tech priorities for e-retailers?

The technology survey in the Leading Vendors 2024 report found that there’s a tie for the top priority when it comes to retailers’ 2024 tech budgets. Nearly a third (30% each) of retailers said their biggest technology priorities for 2024 are content management and their ecommerce platforms. Similarly, a pair of priorities tied for second. Just over a quarter (26.7%) want to prioritize product management and web analytics.

Search engine optimization (SEO) tied for third with website performance management and order management (23.3% each). Meanwhile, only a fifth of respondents included artificial intelligence in their top five ecommerce technology budget priorities for 2024. The same number selected affiliate marketing, omnichannel, online marketing, and customer relationship management technology as top-five priorities.

On the low-priority end of the spectrum, just 10% of retailers surveyed listed fulfillment services or payment (including security systems and fraud prevention) as a top-five priority.

Fewer than 10% of respondents said their priorities include customer ratings and reviews, customer service software, international ecommerce software, and sales tax management. And not even 5% of retailer respondents selected social media as a top-five priority, nor supply chain management.

When it comes to artificial intelligence, more than a quarter of respondents aren’t just interested, but they’re using it with good results (28.57%). And just under a quarter are using it but with limited results (23.81%). Meanwhile, not even 5% of surveyed retailers are using machine learning with good results. But a third are using it with limited results. For 2024, 42% of surveyed retailers are considering AI, and a third are considering machine learning. Just under 5% of respondents don’t plan to invest in AI. And over a quarter (28.57%) plan not to invest in machine learning.

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