AI-powered e-commerce has significantly changed the way we shop. In 2013, Deloitte’s study found that FMCG sales underutilized e-commerce channels. Now, many grocers have come to move consumer packaged goods (CPG) through the e-commerce channels. There is increased use of grocery delivery, and subscription boxes for a myriad of products these days. However, some technology used are still lacking. Here, we share some of the 21st century technologies and strategies which retailers are using to stay in the game.
The consumer’s decision-making process:
Step 1: Need Recognition
Consumer Need Recognition
With predictive AI, businesses can predict consumers' needs even before they may know it. A simple illustration: a florist or gift shop which tracks its customers' network can help to prompt purchases of “anniversary gift” or “birthday gifts”. Ways to predict consumer needs and market products to them are aplenty. Customized messages can be pushed to consumers via emails, WhatsApp, and other channels.
Step 2 & 3: Information Search & Evaluation of Alternatives
Businesses must pay attention to UI/UX design of the website or application or chatbots they are using - think of it as the interiors of a physical store. Key products should be featured at an attention-grabbing showcase, and relevant products made readily available nearby.
Customers in need of a specific product may be less patient to browse the entire store to find the one product. While this may work for businesses with few product offerings, those with large assortment of product should add a search methodology, and this can be achieved through the use of search bars or chatbots. These tools can help consumers to navigate the complex website or application you spent good money developing.
Some may argue that forcing the consumer to “browse” can trigger more sales, however, longer browsing time also risks higher drop-out rate. This is especially true for low motivation purchaser who has the option to buy the same product in other online shops when they return to the search engine.
Text search function
Natural language processing (NLP) allows computer to understand search keywords better. This is important on any e-commerce application or website so that consumers consistently find what they want- reducing time for customers seeking to locate the product.
Image search function
Taobao is possibly one of the first e-commerce marketplaces to allow buyers to search for product with images as early as 2011. The function only recognised certain product categories in its earlier days, but has developed since. Neural network is the technology behind the growth of image recognition technology – allowing businesses to provide the most relevant search results for the users without a word, or the ensuing language barriers.
Voice search function
AI also extends to voice. Products like Amazon Echo which made voice-based search possible, and other virtual assistants (VA) like Siri and Google Assistants help consumers become more familiar with voice-commands. While voice recognition did initially set off alarm bells for consumers over privacy issues, consumers are still using it, evidenced by the growth of the voice shopping market, which reached $2 billion in 2018. As consumers use voice commands more habitually, businesses are quick to adopt voice search into their website, apps, and chatbots.
To ensure that they are making the right choice, many consumers seek information about the product. Some seek answers by contacting the seller via E-mail, social media, website chatbots or even visit the physical stores.
Chatbots can be deployed and integrated to existing communication channels to handle such queries promptly before the consumer changes their mind about a product. Using a conversational interface, chatbots can build relationships with the customer and showcase the brand personality at the same time. Data can also be collected on the consumer’s interests and preferences.
Using interactive menu cards and capturing the customer's selections, the chatbot can also push relevant product recommendations and offerings, and in some cases, close the sales within the chat session itself.
Not all questions can be answered with words or images; tactile queries like “what does the material feel like?” may require customer’s physical presence. Hence, traditional brick-and-mortar stores is still an important channel for most retailers. Online browsing and in-store buying (webrooming) or In-store browsing and online buying (showrooming) are common tactics that consumers use in their search process and its best to cover all grounds.
In the physical store, well-trained and helpful staff can help to build relationships with customers through interactions to seal the deal. In-store tracking tools like RFID, computer vision, and facial recognition technologies are used by savvy commerce for intelligence. Facial recognition technology can be employed to profile customers, their browsing behaviour, and purchase behaviour. Retailers can also use their own data base to detect when a consumer is making a repeated visit. In Thailand, 7-eleven stores used behavioural analytics and facial recognition technologies for loyalty club members. Information is used to analyse store traffic and make suggestions to the members. Other uses for in-store analytics include managing staff schedule, optimising products placing, and managing inventory with reliable anticipation of demands.
Step 4: Purchase Decision
The following are no new “technology” per se, however they are useful applications which consumers actually use, and a key differentiating factor to consumer in the purchase process.
It is not uncommon for consumer to search for “promo codes” or deals when they decide to make a purchase online. Nothing like a good sale to seal the deal. Besides pushing out discount from your own brand, there are many mobile applications which helps consumers “save”. Businesses like Groupon (now rebranded as Fave in Singapore), Grab (in-app voucher sales), and Entertainer (1-for-1 meal deals) capitalises this to capture the more budget conscious consumers.
Filling in the credit card information and shipping details can be a hassle when you are shopping on the go. More businesses are accepting Apple Pay and Samsung Pay on their website or app and Facebook Messenger. Businesses which don’t already provide a fuss-free payment method should look into the drop out rates at the payment stage to understand the sales lost to motivate themselves to make the change.
Step 5: Post Purchase
Service providers like airlines, hotels, movie theatres and restaurants can make use of messenger services to remind customers of their appointments. These are made seamless when consumer purchases online. With the use of messaging apps, these help businesses provide timely reminders to improve the customer journey.
In many service industries, tickets are saved in mobile wallets, rendering physical tickets obsolete. Think mobile airplane boarding passes, movie tickets and even concert/festival entry passes.
Photo from American Airlines
Logistics is a complementary industry to retail sector that has been making headway with the use of technology; deliveries for the company and collections for the customer are now seamless and fuss free. The use of drones, smart warehousing with RFID and IoT are just scratching the surface of what has and can be done with logistics -- we'll leave this for another day.
Rinse & Repeat
Post-purchase, AI can continue loading new recommendations for the consumer. A grocery store which has recorded that Customer X orders grocery with a five-days interval may prompt him to place his standard order for the next day on the 4th day after. This can trigger the need recognition once more to repeat the sales loop. This can be particularly useful for FMCG companies where there are highly repetitive purchase patterns.
Businesses everywhere are constantly innovating to guide their consumers down these purchase journeys in better ways. While such an elaborate decision-making process may not apply to low-motivation purchases, businesses are not taking their chances. There are many technologies which can be applied to e-commerce businesses discussed here so consumers like us can happily fall prey to.