There’s no denying the digital path to purchase is becoming more of a consumer highway than a path. A Forrester report predicts, “Fifty-eight percent of U.S. retail sales will be digitally impacted by 2023, meaning those sales either will occur online or may occur in-store but be influenced by digital technologies.”[1] The long-term impact of the digitization of commerce (sometimes referred to as the ‘Amazon Effect’) goes far beyond making items available online. Peter Brereton, President and CEO of TECSYS, explains, “The ‘Amazon Effect’ … doesn’t just have wide-reaching consequences for retailers. It touches all points of the supply chains, meaning those who manage those chains and wish to remain competitive must be informed and proactive. Given how rapidly the supply chain landscape changes, decision makers who want to stay in the know will need to pay careful attention.”[2] Staying informed and remaining proactive means more than reading daily newspapers or industry journals. The digital age is all about data and, to make sense of data, you need cognitive technologies. Every day more experts conclude cognitive technologies are fundamental paving stones on the digital path to purchase.
Cognitive technologies impact on commerce
Cognitive technologies are referred by a number of terms including artificial intelligence (AI), machine learning, and cognitive computing. The differences between these terms is not as important as the results they can achieve. Michelle Evans (@mevans14), Global Head of Digital Consumer Research at Euromonitor International, explains, “The power of artificial intelligence to transform the consumer journey has dominated industry conversations in recent years. At its lowest common denominator, AI enables brands to better synthesize mounds of data and incorporate those learnings to improve the commerce experience. This is brought to life in a variety of ways, from empowering store associates to enabling more powerful search to providing the personal touch.”[3] Cognitive technologies are part of a larger ecosystem tailored for the digital age. Evans explains, “The confluence of three powerful drivers — exponential data growth, more sophisticated distributed networks and smarter algorithms — have propelled artificial intelligence to the center stage for consumer applications.” Is this ecosystem working? Brereton acknowledges, “The internet age is replete with digitization success stories that yielded sales numbers higher than their brick-and-mortar counterparts.”
Cognitive technologies and the personalization of the digital path to purchase
Although the digital path to purchase affects all aspects of the supply chain, the consumer is the primary focus. “With the latest advancements in AI and machine learning,” writes Bud Goswami (@bud_l1ght_year), lead data scientist at Qubit “retailers who have an ecommerce presence are beginning to really hone in on creating a custom, brand-focused experience, for each visitor.”[4] One thing retailers were quick to learn is that consumers can enter and leave the digital path to purchase at any point. Millions (if note billions) of virtual shopping carts are abandoned every year. Keeping customer engaged and happy is critical to keep them on the path to purchase. Michael Baxter (@michaelbaxter_) explains, “It is more important than ever for brands to keep up a steady conversation with their customers. Those who become complacent with client communication could soon find foot-loose customers wandering in the direction of their competitors. As they say, out of sight, out of mind. That is why personalized conversations with their customers is vital. Machine learning can help make it happen.”[5]
Konrad Feldman, founder and CEO of Quantcast, goes so far as to say retailers failing to embrace cognitive technologies could find themselves in history’s dustbin. He explains, “Those brands that are early to embrace AI will have an insurmountable competitive advantage and will be viewed as ‘smart’ as they predict and anticipate the needs of their customers. The net effect will be a raising of the bar for the customer experience. In comparison, all non AI-powered experiences will be viewed as dumb.”[6] Dumb companies aren’t likely to survive. Manish Dudharejia (@Manish_Analyst), President and Founder of E2M Solutions Inc., believes cognitive technologies will prove useful all along the digital path to purchase. He bluntly states, “AI must be a part of each step during the buyer’s journey from start to finish.”[7] He adds, “Artificial Intelligence is unquestionably set to revolutionize business as we know it. There are seemingly countless ways that AI can support companies and help them become smarter, more profitable, and more prepared for the future.”
They key to keeping customers happy is personalizing their digital shopping experience. Feldman explains, “While everyone will expect the personalized one-to-one experience, you can do this at scale by grouping audiences based on different behavioral patterns that you identify via AI. By identifying the patterns in your data, using automation where it makes sense, and planning with predictions, you can now rethink how to make your customer experience magical for the AI era.” Traditional segmentations, like gender, age, race, and location, are not granular enough to provide the personalization discussed above. But, as Feldman notes, cognitive technologies can help. For example, the Enterra Shopper Marketing and Consumer Insights Intelligence System™ can leverage all types of consumer data to provide high-dimensional consumer, retailer, and marketing insights.
Concluding thoughts
Dudharejia concludes, “Online brands face fierce competition since consumers have lots of options when it comes to purchasing nearly anything online. Therefore, e-commerce companies must do all that they can to move their customers along the buyer’s journey as quickly and effectively as possible.” Baxter suggests the best way to achieve this goal is to leverage cognitive technologies. “If brands and their marketers want to have the right conversations with their different customers,” he explains, “it is high time that they update their tech toolkit.” Cognitive technologies will make the digital path to purchase smoother and they can improve processes all along the supply chain.
Footnotes
[1] Dan O’Shea, “58% of retail sales will be influenced by digital by 2023,” Retail Dive, 2 January 2019.
[2] Peter Brereton, “The ‘Amazon Effect’ and Its Long-Term Impact on the Supply Chain,” Supply & Demand Chain Executive, 14 January 2019.
[3] Michelle Evans, “Artificial Intelligence Is Expected To Be The Most Impactful Technology On Commerce,” Forbes, 16 January 2019.
[4] Bud Goswami, “How artificial intelligence and machine learning can revolutionize ecommerce,” Information Management, 5 April 2018.
[5] Michael Baxter, “How machine learning can help brands develop more personalised conversations with their customers,” Information Age, 9 January 2019.
[6] Konrad Feldman, “How AI can Make Your Customer Journey Magical,” Ad Age, 9 July 2018.
[7] Manish Dudharejia, “How E-commerce Brands Can Include AI into Every Step of the Customer Journey,” Datafloq, 29 August 2018.
