The Rise of the Smart Speaker
We’ve breached another new frontier in marketing. Thanks to the widespread adoption of IoT like Amazon’s Alexa and other smart speakers, a new channel has emerged and is rapidly picking up speed in the world of eCommerce: Voice-Commerce (vCommerce). Here’s a quick guide with all the stats and tactics marketers need to know to get a grip on the new technology, fast.
Forerunners & Followers
As more voice-enabled devices like Google Home, Echo Dots, and Apple’s recently released HomePod continue to pervade households, the rate of voice based purchases is skyrocketing. Forrester projects that by the end of 2018, 26.2 million U.S. homes will have smart speakers, spelling fortunes for online retailers.
What’s more, a report published by Juniper Research estimates that smart speakers will reach more than 55% of U.S. homes by 2022. With his residence completely integrated with Google Home, Redstage CEO Adam Morris says he’s “constantly witnessing improvements in voice capabilities from new commands to more accurate responses.” Considering the growing adoption rate and skill set of voice assistants, Morris says, “I believe voice is ready for eCommerce.”
Now that we can see the adoption curve, let’s dive into the implications from a search perspective.
The Heart of vCommerce
At the heart of the vCommerce movement lies our common frenemy, Google. Not only is Google now making all types of smart speakers to compete with Amazon, they’ve naturally gained dominance in the vCommerce search market. Remember, voice search did not exist before 2016.
To get an idea of how quickly the tech is taking over, heres some info from Kissmetrics: “Within 2016 alone, voice-based search went from zero to 10% of all search volume. Today, 20% of all searches have voice-based intent, and by 2020, ComScore estimates that half of all searches will be done by voice.”
“Today, 20% of all searches have voice-based intent, and by 2020, ComScore estimates that half of all searches will be done by voice.” –Kissmetrics
Say it again in your head… HALF of all searches… that’s real estate you can’t afford to miss out on. The fun game for the years ahead will be keyword planning for customer voice searches… but we’ll get back to that later on.
Here’s another one from Forbes: “Voice assistants are already being used to make purchases by 40% of millennials, with that number expected to exceed 50% by 2020.” So now you’re thinking, okay, great, more Adwords campaigns right? But wait! There’s more you can do to prep for this torrent of voice shopping.
Getting Your Share of Voice
Unapologetic marketing puns aside, here’s how to prep for vCommerce.
Step 1: Behavioral Analysis
Get your strategy team together and dive deep into your customer behavior segments. Which of your products are getting the most search traffic? What are your top sellers? What are the top products customers search for within your site?
Step 2: Search Out Loud
Think about what products you’ve personally searched for recently and how you found them. Brainstorm which of these products you’d order on a whim from your bedroom, your kitchen, your laundry room, or your entertainment center. Think about things you might search for while out at the store to compare prices, and things you could order from your desk at the office. More importantly, think about a product you need, like a refill on paper towels, and ask for it out loud. It’s likely that the way you ask for something aloud is different from how you search for it online. Saying “Alexa, order me more [Brand name] paper towels” is a bit different from typing “[Brand name] paper towels” in Google. Use this to your advantage.
Step 3: SEO Linguistics
Once you’ve tackled mobile-first SEO, start to rethink SEO in terms of natural language. Grab your smartphone or your favorite smart speaker and run some voice searches. What are the top results? Which of your competitors are showing up? What meta descriptions and keywords are they using? What phrases are their Google ads populating for? Think long-tail, because every customer is going to be asking for things a little differently.
If you’re new to this, “Long-tail keywords are longer and more specific keyword phrases that visitors are more likely to use when they’re closer to a point-of-purchase or when they’re using voice search. They’re a little bit counter-intuitive, at first, but they can be hugely valuable if you know how to use them.” (Wordstream) Retool your content for natural language and start ranking for voice searches as well as regular (manual-typing) searches. With this in mind, remember that voice searches are the ultimate gateway to impulse purchases. Take advantage of this, make some tweaks and test, test, test!
“‘The websites that will win…are incorporating (voice) search strategies for typers and talkers, alike,’ says Michael Peggs, Founder and Chief Content Creator of Marccx Media.”
Step 4: Get Local, Get Vocal, and Get on Amazon
According to Search Engine Watch, “Mobile voice-related searches are 3X more likely to be local-based than text.” This means, it’s time to boost your local search magnet. If you’re not using Amazon as a channel to sell more products, now’s the time to start, as Alexa is programmed to suggest products from Amazon automatically. Don’t miss the chance to have your product recommended by a customer’s favortite digital assistant.
Additionally, consider reminding your customers that they can find you via voice search! This simple announcement can make a better CX for anyone who’s not yet accustomed to using voice search. More importantly, if you have Alexa Skills for your store, you’ll definitely want to tell the world. Send your customers an email telling them how they can order their next product just by saying a phrase. The’re not likely to forget it. Don’t have an Alexa Skill for your store? Read on:
Step 5: Get The Alexa Skills Kit Get the Alexa Skills Kit and start creating voice-enabled Alexa skills. According to PracticalCommerce, the kit is “a collection of self-service APIs and tools that make it easier to create voice-driven capabilities for Alexa.” Not only will this allow your customers to make purchases simpler, but more importantly, as an accelerating number of retailers invest in the trend, more customers grow accustomed to using this pervasive technology.
To recap, 2020 is shaping up to be a critical year for vCommerce. The projections scream 50% across the board. By then, roughly 50% of U.S. households will have smart speakers. 50% of all searches will have voice-based intent. More than 50% of millennials will shop via voice.
While voice as a channel begins to enter the main stream, Morris notes that eCommmerce traditionally lags behind the latest trends and technological innovations. “We [at Redstage] talked about mobile becoming the next big change in eCommerce 5 years ago. The industry collectively lagged far enough behind that now mobile traffic has overtaken desktop and today many still aren’t properly leveraging it. Mobile conversion rates are still roughly one-third of desktop rates, another sign that companies across the board haven’t realized mobile’s full potential. I have a feeling voice will follow the same pattern, though hopefully at a slightly quicker pace with what we know now. We’re witnessing and projecting massive adoption, so we’ve got a few years before the industry becomes accustomed to using voice competitively. However, voice-commerce is an inevitability, and we should start preparing now just as we had to prepare for mobile.”
Now if you’re now thinking, “vCommerce is still on its way to maturity, so I have some time right?” Consider this tidbit from DigitalCommerce360, “A recent survey by SAP Hybris found that 38 percent of U.S. consumers would consider using digital assistants for their holiday shopping this year, a significant increase over the 17 percent who reportedly used voice devices for holiday shopping [in 2017].” If you’re looking for an edge this holiday season, this could be it.
Further Reading on Marketing in 2020
If you liked this article, you’ll also want to read, How All B2C Companies Should Be Marketing By 2020 for more disruptive insights.
Everyone’s asking, “What technology will have the biggest impact on marketing in 2018?” Will it be the illustrious AI, the illuminating abilities of augmented reality, or perhaps… chatbots?
With the emergence of all this new tech, marketers are left to base their budget allocation for 2018 on speculation. As a result, I am inclined to believe that without a doubt, 2018 will be somewhat of a plateau for marketing; defined by a knowledge-gap surrounding new avenues for advertising and the deteriorating value of current methods. Here’s why:
Marketing Tech in 2018
As we await the true advent of AI, AR, VR and Mixed Reality in the mainstream, contemporary digital advertising is rolling over and dying, with search, social and display ads experiencing a gradual decline in usefulness. Gen-Y and Gen-Z hate ads, and while pervasive multichannel messaging was previously a working strategy, ads are ignored now more than ever… and expansive ad campaigns are annoying customers, damaging brands.
The savior in this scenario was and still is video, which many companies lack the capability or know-how to properly leverage. Many still refuse any attempt to enter the video realm, despite annual marketing reports for the past decade marking video as the most effective channel for sales and brand engagement. Right now, the benefits of video seem to be buffering (pun intended), with numbers stagnating as users look for something new.
As a natural side-effect of the decline in channel efficiency, marketers have turned to big data as the new god to drive vertical engagement. However, many retail marketers lack the experience and/or artificial intelligence applications necessary to make sense of this wealth of data.
Getting a Grip on AI
This past year, we’ve seen the launch of some incredible remarketing software in ecommerce, like HiConversion and Rejoiner. Programs so powerful they can replace entire marketing teams that would typically manage the breadth of digital messaging (emails, ads, social, tracking, analytics, etc).
However… because these systems and the technology are so new, we’re combining the adoption curve with a learning curve. While marketers get a grip on machine learning Saas, I expect their true potential will be neither realized, nor their full impact felt in the market this year.
To make matters worse, today’s AI market focuses exclusively on predictive AI, which all-too-soon will be replaced with cognitive AI (Rajesh Sinha, Fulcrum Worldwide‘s CEO, predicts in the next two years). The change-over will immediately render predictive systems obsolete. On the other hand, retailers and brands can’t sit around waiting for cognitive AI, and those that do could see big-time losses (Hence the dilemma here).
Playing the Waiting Game & Winning
For now, we have to keep milking the avenues we have available. Optimize performance as much as possible with regard to channel strategy and be diligent. With the current pace of innovation, you might not get a second chance.
Now is the time for companies to start looking into how AR, AI, VR, IoT and other emerging tech can reshape business through digital transformation. While the long-term strategy teams focus on how they will deliver value in 2020 and beyond (when these technologies are expected to have much wider reach), it’s time to bring our websites into the new age. Maximize your site and sales funnels with every possible upgrade, build out content and bulk-up ad spend while we get over this hump. Rethink your strategy for the next four years and think seriously about how you plan to invest all the new martech.
Some companies will spend a little more on ads to wait this out. Others will buy into expensive (soon-to-be outdated) platforms they’ll be stuck with long after the competition moves on. Unfortunately, the largest group will likely be those who sit on their hands and refuse to innovate. These will be the losers. Instead, find out how much budget you can pack into the time between now and 2020. Focus on your omnichannel experience and unifying your brand strategies with supportive AI products you can afford (for the short term). In addition, bulk up your ad spend, get some videos or podcasts going, and settle in for the long hibernation period ahead.
So let’s review. What technology will have the biggest impact on marketing in 2018? You, the human, which should be an empowering, albeit intimidating challenge for marketers. Lastly, remember, there’s no need to be discouraged. Plateaus are part of every high-growth process…
We just happen to be crossing the Rubicon.
If you’re reading this, you understand what’s coming. The Net Neutrality repeal holds the potential to be the biggest disruption to business in the past century, if not history. In a world where companies rely on digital advertising, agencies and ecommerce, the difference between life and death of brands may hinge on the whim of the world’s largest telecoms. Here’s why you need to worry.
Net Neutrality & Its Impact on the World
Up to this point, a free and open internet devoid of “fast-lanes” and “slow-lanes” created a boom in business that revolutionized the way we live. In line with Moore’s law and Ray Kurzweil’s Law of Accelerating Returns, this past century experienced exponential growth of technological development, due in no small part to the democratization of the web. Tim Berners-Lee’s creation of the “world-wide-web” in 1991 scarcely resembles the monolithic utility that is our modern Internet, only a mere 26 years later. In that same 26 years, we went from computers the size of microwaves to computers that fit in our hands.
Much has changed.
Companies who invested in the Dotcom boom flourished, bringing rise to unfathomable industrial power on a global scale; birthing magnates like Jobs, Bezos, Murdoch, Musk, and eventually, Zuckerberg. The latest Internet revolution, social media (starting with email), democratized global communication thanks to AOL, Facebook, Twitter and Yelp. These advancements further facilitated burgeoning startups like Uber, AirBnB and DropBox; companies who owe the sum of their successes to the Internet’s level playing-field.
Today, a single blogger has the same opportunity to get a million comments on a post as Walmart does. A mom and pop online store has the same chance of winning over customers as Amazon. Time, resources and budget notwithstanding, the Internet provides a fair medium for all business to compete, and we owe the state of our world to this universal marketplace of ideas.
Repeal Implications for Everyone
By repealing Net Neutrality, the Federal Communications Commission (FCC) reclassifies the internet as a public good rather than a utility, removing strong Net Neutrality rules and protections under title ii that bar service interference from companies like Verizon and Comcast. In doing so, the FCC now allows internet service providers (ISPs) to block, throttle or slow Internet speeds if they so choose. The implications are such that broadband providers and cable companies can now charge businesses and citizens considerable premiums for access. Want to watch Youtube? Netflix? CNN? Now you may have to pay. Want to visit the Library of Congress website or use Slack? Please pay. Want to serve ads on any of these channels? Better get a bigger budget because they might not load…
“Repealing net neutrality will definitely have winners and losers. The winners will obviously be the large telecom companies who will have more control over their networks and profitability. The biggest losers will be small businesses. We may end up in a scenario where the most popular content is dictated by the telecom companies and biggest players, similar to the way cable TV and cable content has been run for many years. We may very well end up being robbed of the diversity of the Internet, since only the large companies will be able to play this game.” — Adam Morris, Redstage CEO
Yes. The United States government just made this decision for the entire world. Since these telecom giants are global, these rules will impact companies of all sizes, both domestic and abroad, across the planet (should the common fears of the repeal be realized).
This kind of pay-to-play environment begs the question, “Will this be the end of the startup age?” If companies can’t afford to enter the market, they can’t make sales. With this massive barrier now placed on all businesses, can we expect investors to willingly throw money into new companies anymore? What happens when consumers can’t access their favorite sites for free?
What the Repeal Means for Advertising
Take a look at this picture. This is Times Square in New York city. If you’ve ever visited, you’ve probably been taken aback by the massive screens and billboards with flashing advertisements on every surface. In many ways, Times Square is like the Internet. It’s a place millions visit every day, that just about anyone is allowed to view. Companies pay to have their ads shown to masses who pass by. Businesses both big and small set up shop down different avenues nearby. All of them hoping to make sales from their chunk of the traffic.
If you look closer, however, you’ll notice several of the larger screens and billboards are blank. An uncommon occurrence for Times Square. However, with the title ii protections removed, it’s likely there will be fewer ads than ever before.
“On the most basic level, brands will end up paying more to have their content/ads published online. If Internet Service Providers like Comcast and Verizon begin to charge website “tolls” for being able to deliver the websites’ experience, those costs will ultimately be passed onto brands through increased cost-per-thousand (CPM). Brands with any type of content—from video to games, to microsites — could be required to provide payments to ISPs to enable the quick access to their content. With increased CPMs comes lower ROI, which leads to shrunken budgets, over time.” —MediaPost
It doesn’t stop there…
Companies wishing to display ads on certain channels may now be forced to enter deals with multiple ISPs depending on where they want their ads. As MediaPost notes, marketers may face increased costs where ISPs inhibit ad placement in a scenario “in which, say Verizon has a stake in news sites like CNN.com (but not Fox News).”
Moreover, the companies who serve branded ads like Google, Facebook and Twitter could face considerable damage, as these advertising companies may have to pay a premium to ensure the ads hosted on their channels actually load. Without this, ad companies won’t be able to gauge whether their ads were actually viewed or not, resulting in a lack of insight for the companies who pay them… You can see how the cycle breaks down… Businesses will suffer on all sides.
Say Goodbye to “Freemium” & Social Marketing
This goes without saying. You can’t offer a free-trial of a product online if someone has to pay for it. If the marketer has to pay, the company loses money. If the customer has to pay, it’s not a free-trial. Similarly, social media will no longer offer an advantage as a “free” avenue for marketers.
Millions of consumers aimlessly scroll through Facebook, Twitter and Instagram every day. As a staple of many e-tailers, especially smaller ones, unpaid social strategies allow brands to attract large swaths of customers across various demographics. This is especially true in the age of customer advocacy, when word-of-mouth customer recommendations are the leading drivers of online store sales. Once consumers and companies have to pay for access to social media sites, the benefits of unpaid social campaigns are removed. With many growing bored of Facebook and Instagram, users aren’t likely to stay… so what happens to the PPC channel these sites offer?
Let’s observe the following waterfall effect: With less social interaction from less users, less companies will invest in social. Brands that opt-out of social will lose their market share from social, resulting in less sales. This will leave only the CocaCola’s of the world to pick up social stragglers. If social media sites crumble as a result of all this, the PPC avenues brands use today will go with them. Since pay-per-click ads generally have a massive impact on business, what option will ecommerce companies have to advertise? And finally, how high will CPC get once hundreds of companies are competing for the same keyword on Google Adwords? Assuming Google can afford to continually index trillions of pages, as well as provide fast access for searches.
Ecommerce Will Undoubtedly Suffer
If the dystopian vision of post-Net Neutrality plays out, there’s essentially two ways the ecommerce situation can unravel:
Scenario 1: Stores must pay ISPs to give all visitors speedy access to their site.
This means these stores will be paying ISPs to enhance customer experiences or face severe consequences for their bottom line. As SpeedCommerce describes it,
“…study after study shows that page load time is one of the most important factors in ecommerce conversion rates. If you’re a huge monolithic company like Amazon or Walmart, you’ll end up being forced to pay for the “fast lane” version of the internet to ensure that your customers have the uber-fast online shopping experience that they’re used to (and you want). However, smaller online retailers won’t be able to afford this premium, and thus their customers will be relegated to the “slow lane”: slower page load times, which could be enough to convince their customers to shop where the the experience is faster. —SpeedCommerce
What’s the alternative?
Scenario 2: The customer will have to buy a “Shopping Package” from an ISP in order to access your online store.
Imagine having to pay just to access Amazon.com. Shipping delays already give customers a headache. What happens when they have to pay just to get to your store? The answer is invariably a steep decline in traffic. To mitigate this, retailers from Walmart to small business will likely aim for higher ad budgets, but as discussed above, this is an uphill battle that leads to diminishing returns. What about social media? Wait, we covered that too in the previous section. Can we expect customers simply adjust to a painfully slow online experience? Will there be a reverse-migration from clicks to bricks?
What can retailers do? Adapt or die; and many will be forced out of the bull-pen to vanish in obscurity. John Zieger, General Counsel at Stripe foresaw the world without Net-Neutrality back in 2014: “An internet where certain retailers suffer throttled network connectivity is bad in the short term for consumer experience, and bad in the long term for consumer choice.”
For now, it seems the latter scenario might be the route things take, or worse, a combination of the two.
In October, California Democratic Rep. Ro Khanna shared this example of how ISPs manage the Internet in Portugal, a country without Net Neutrality regulations.
“…without net neutrality, big-name apps could theoretically even pay telecoms firms for preferential access, offering them money — and smaller companies just couldn’t compete with that. … Yonatan Zunger, a former Google employee, recently retweeted Khanna’s tweet, adding: “This isn’t even the worst part of ending net neutrality. The worst part happens when ISPs say ‘we don’t like this site’s politics,’ or ‘this site competes with us,’ and block or throttle it.”” —Futurism.com
A Dangerous Game
Now for the final note, and a haunting one at that. The ultimate nightmare scenario is that the incredible leverage ISPs can now weild over the market could allow them to gain a significant advantage… They now have the ability to use their new-found power to serve themselves at an unimaginable scale.
“For example, an ISP might invest in a service, then throttle competitors’ speeds. This would give their product a competitive advantage. A “double-dip” would subvert the market, empowering ISPs to choose which businesses succeed.” —chargebacks911.com.
This is the reason most people are freaking about about the vote. These companies can act with complete autonomy, and have a chance to control the free market. Now, while there are some* barriers to prevent this kind of activity, it’s still a major fear for many, and a real possibility. How can these companies objectively manage the Internet speed of their own properties without cornering the market as a side-effect? If products and services can only be effectively marketed and sold by a small group of companies, is this really the end of the free market? What will happen to the U.S. economy with hundreds of companies abandoning this ludicrously restrictive online environment for safer shores overseas (if there are any) or if major companies can’t afford to pay? And finally, how can free speech or laissez faire possibly exist in the online world?
Please leave a comment below.
Act Now While We Still Can.
While the major opinion backing the repeal is that this isn’t what ISPs will do (especially since they pinky-promise not to), but the fact that they have the option to dominate and control the market begs the question, “Why wouldn’t they?”
There’s still a short time period when Congress could reject the FCC’s rollbacks, so we all need to fight back:
Under the Congressional Review Act, Congress could issue a resolution of disapproval and overrule the FCC’s decision. But it’s not going to be easy—the CRA only provides Congress a 60 day window in which to act, and a resolution of disapproval needs either presidential support or backing from two-thirds of the House and Senate. —Gizmodo
Email Congress TODAY. Call your local Congressman or Congresswoman. There’s not much time. Here’s a link to what you can tell them from BattleForTheNet. We built our world on the web and ushered in a new age of progress. Let’s keep the web open. Let’s keep building, together.
Partner Profile: Shoppimōn
Redstage Worldwide partner Shoppimon
provides top online retailers with the ability to know about performance, technical, and content issues before their shoppers ever encounter them. By visiting eCommerce sites the same way real customers do, Shoppimon behaves like a 24/7 mystery shopper, identifying any problems that impact the shopping experience and a customer’s ability to complete a purchase. Shoppimon currently monitors over 2,000 online stores, and publishes the monthly Online Health & Usability Index
bench-marking major eCommerce health and performance trends.
Creating the Ideal Customer Journey:
The ideal customer journey is fast, smooth and interruption-free. The best online retailers in the world have cut average site load times to tenths of a second, and have optimized the layout of each page to provide an intuitive shopping experience. Ideally, a website should also never suffer from major technical or content issues that interrupt a shopper. Unfortunately, this ideal is not possible today.
3 Things That Make or Break a Store’s UX
Every eCommerce manager should know what’s happening throughout their site, and be prepared to handle serious issues at a moment’s notice. It’s also important to be aware that no store is immune to these problems. Top retailers are prone to face these types of issues at rates similar to SMBs, with the average online retailer losing 13% of their annual revenues to them.
#1 Entry Points
Landing pages and other forms of content that push large quantities of traffic to your site, but are not functioning properly or don’t render visually as they should can make or break a marketing campaign and the sales targets you have for the month. So ensuring there are no snags in the functionality of these gateways to your site is crucial.
We speak to many retailers who check their online stores including the checkout process thoroughly in a development environment, but once it’s live, they stop testing. Due to how many moving parts there are in a checkout process, particularly custom built checkout workflows, it’s critical to continuously check that there is nothing getting the way of a customer who has already decided to buy. Shoppers must be able to effortlessly see what they’re buying, the associated costs, easily enter coupon codes, select payment methods and complete a purchase. Do not rely on customers to report problems here, because you stand to lose significant business before a determined shopper actually reaches out. We know that 4% of all eCommerce business is lost due to technical issues during checkout, but with proper attention you can identify problems before customers hit them, dramatically reducing that number.
In a recent post, Shahar Evron, Shoppimon CTO, discussed how to handle error messages with grace. He’s found that error messages are often left as an afterthought, rather than planned for during a site’s development. Something that is true of even the largest sites. Moreover, development teams regularly decide their content, leading to awkward, highly technical messages that scare customers away. Beyond having an immediate impact on sales, when messages are missing, this can also lead to error messages being exposed on a page. And this poses serious security risks. So make sure neither your site or your sales are at risk by planning for errors to occur in advance. Create simple messages that leave your shoppers with a smile on their face, and the opportunity to either continue down the conversion funnel or engage with you directly.
Site Monitoring: Top Challenges
It is surprisingly common that these things are forgotten about, or put aside, all together. Error messages are a great example where they’re often left as an afterthought. Whereas, for checkout many people know there’s a problem, but either do not, or are not able, to test reliably.
So many eCommerce managers are forced to try and identify issues manually, or wait for customers to complain. And of course by that time, significant sales have already been lost, since the vast majority of customers will simply abandon a purchase.
It’s worth noting that manual testing is highly problematic. Not only is it time consuming, but you will inevitably miss many intermittent issues. Additionally, it is very difficult to manually check multiple variations of a given workflow. For example, testing checkout with one product, vs. 3, or checkout with normal pricing vs. discounted pricing etc.
For scenarios like these, functional (automated) testing, such as Selenium scripting is ideal, but it is not used by many site operators, particularly on a production environment as it can be very complex to setup, maintain and use on an ongoing basis.
The biggest challenge with entry points and traffic gateways is that even online stores which dedicate substantial resources to monitoring their sites on an ongoing basis often overlook off-site sources traffic, such as landing pages. Many eCommerce managers assume that if its not part of the site, then it doesn’t need testing.
The Best Chance for Optimizing Your Overall CX
Awareness is #1: No matter how rigorously an eCommerce site is tested before it goes live, once it is in production it becomes a living breathing entity. Your website will change and be impacted by other integrated softwares, 3rd party services, and your customres. Issues will occur, and code will break. And it’s all par for course in managing and optimizing an online store.
Testing & Monitoring: Because issues happen, you need to keep finger constly on the pulse. Even if your development team has done an incredible job putting together a beautiful cutting-edge site, things can and will go wrong over time.
Therefore, automating testing of your store is an absolute must. Aim to use robust solutions that require less maintenance, and will provide you with clear insight into how customers experience issues, how those issues impact your business, and then help your development team quickly identify and fix their root cause.
And don’t forget to pay special attention to the campaigns and landing pages that bring traffic to your site in the first place.
AI in eCommerce: Hype or Reality?
The whole business universe, eCommerce included, is buzzing about artificial intelligence, the capability of a machine to imitate intelligent human behavior.
Unfortunately there is no exact classification of what makes a solution an artificial intelligence solution. Any computer based system that is using data to make some decisions can be labeled as an artificial intelligence solution. Artificial intelligence means many different things for many different people.
This gives almost every software vendor a license to add an artificial intelligence ‘spin’ to the description of their product. This is counterproductive. Instead of attracting new buyers this just confuses the marketplace.
So, let us help you develop a pragmatic framework for understanding and use of AI in your eCommerce strategy.
Why AI in eCommerce?
Manufacturing, information systems and services are rapidly commoditized. The next industrial revolution is fueled by a need to deliver memorable customer experiences. It’s called the experience economy.
Remember Steve Jobs and his decision to recruit John Sculley as Apple’s CEO. People were confused about the logic of hiring Pepsi-Cola’s president who has nothing to do with technology to run the pioneering computer company. At the time only Steve had the vision and understanding that it is not about computers or cola but about the experience that customers have while using the computer or while drinking cola. That passion for memorable customer experiences is what eventually made Apple into one of the most successful companies in the history of mankind.
Delivering memorable customer experiences is a business of treating the right audiences with the right experiences at the right time.
Technically speaking this is a problem with many moving parts and infinite number of permutations. Each visitor to your site can be classified through use of hundreds of attributes. Buying journeys and consideration paths are different for different audiences. And, finally the business owners can act and treat visitors with a myriad of promotions, product recommendations, messages, content or layout changes.
To illustrate the size of the customer experience problem let’s compare it with a simple chess board.
Here is how. Let’s imagine that our problem is only to create the best customer experience on eight pages of your site. Let’s further assume that each page has only 8 elements, and that we have only one variation for each element. Visually this problem can be represented as 8×8 chess board where each column is a web apge with 8 elements and where each field can only have a black or white color (white is for old and black is for a new version of an element).
The total number of permutations of how the experience chess board can look like is equal to 264.
To help you visualize the size of this number let’s assume that each number is a kernel of wheat.
This number represents a huge pile of wheat. As a matter of fact this number is so big that it represents more grains of wheat than was ever farmed on our planet since the beginning of time.
This is precisely why we should use AI in eCommerce.
A problem of this magnitued can’t be solved through brute force. Conventional A/B split testing or if-this-do-that visitor personalization may sound nice but they are grossly inadequate solutions. To remain competitive you must arm yourself with much more powerful tools that are built on the foundation of big data analytics and machine learning algorithms.
Trust, but Verify
Product recommendation solution providers have done the most to apply advanced machine learning techniques and to deliver consistent results. But not all product recommendations are equal.
If you speak to the best of breed solution providers who invested tens of millions of dollars into research and development you will hear loud complaints about newcommers who are using open source packages to mimic their solutions. Unfortunately, many eCommerce brands are choosing a vendor on the basis of feature completeness of its offering rather than on the basis of the quality of the individual solution components.
If you listen to a vendor talk you will logically think that irrespective of the type of product recommendation solution you will get good value. The only difference between two products is how much revenue lift you will materialize. When a vendor tells you that ‘visitors who engage with recommended products are 10%-15% more likely to buy’ you are inclined to believe such a statement.
There is a small problem. The statement above could be true but at the same time you might be losing money with your product recommendation solution.
Here’s how. If you read the statement above more carefully you will realize that it does not compare results of those visitors who have seen product recommendations against those who were not presented with product recommendations. This would be the most accurate measurement. Instead, each visitor is presented with product recommendations which prevents you from knowing if the same visitors who enaged with recommended products would buy if there were no product recommendations at all.
That’s why we recommend you always test and verify the impact of each of the add-on solutions to your eCommerce site.
In developing your business strategy do not view AI as a ‘silver bullet’ that will magically make your eCommerce business better. Instead, think of it as a new set of technologies that are dramatically changing the competitive landscape.
Over years the ability of your company to adapt and effectively use AI solutions will correlate with your ability to effectively compete and win in the marketplace.
The logical question is where to start and how to build a long term strategy.
We always like to be practical and recommend actions that are satisfying 20/80 rule: 20% of effort (cost) that provides 80% of benefit.
The list of such ideas includes:
- Customer experience assessment: in addition to a quite common UX audit we also recommend use of visitor data to perform an experience health check (FYI: if you do not have resources or do not know how to do it we offer a free health check service)
- Validate ROI of add-on applications: we see on a daily basis how brands are spending a lot of money on expasive user generated content applications, reviews, product recommendations – validate and make sure you are getting ROI from each one of them (FYI: we have advanced testing capabilites and we can assist you with this task).
- Uncover persuadable audiences – a fatal flaw of conventional personalziation solutions is targeting of potential customers vs. persuadable audiences, those who will become a customer only if you do something for them.
As a final note…
Consider this perspective from innovator Adam Morris, CEO of Redstage Worldwide:
“For better or worse, humanity is witnessing ever-increasing evidence that AI provides profoundly better solutions to problems we as humans lack the cognitive processes to conceive. Over the past decade, what we consider ‘modern’ or ‘state-of-the-art’ UX for online shopping hasn’t changed all too drastically. Of course, we’ve experienced improvements in search, filtering, and personalization, but an eCommerce sitemap still looks remarkably similar to the sites of old. Since AIs lack any preconceptions regarding how things ‘should’ be done, I believe AI will work to our advantage, ushering in a fresh age of progress that we ourselves could not possibly create alone in the same scope of time.”