Modern Retail: Ecommerce Technology Update October 2023

ECOMMERCE TECHNOLOGY UPDATE OCTOBER 23 modernretail.co.uk

CONTENTS 3

THE REAL VALUE OF POST-PURCHASE COMMUNICATIONS

6

WHY RETAIL DIGITAL QUALITY MATTERS MORE THAN EVER

9

OPTIMISING ARTIFICIAL INTELLIGENCE TO ENHANCE PRODUCT EXPERIENCE STRATEGY

12

KEEPING PACE WITH CROSS-BORDER ECOMMERCE GROWTH

15

LEVERAGING SUBSCRIPTION TO GROW REVENUE AND LOYALTY

Credits Managing Editor - Rob Gamage - rob@modernretail.co.uk Business Development Manager - Emma Mjekiqi - emma@modernretail.co.uk

Thanks Many thanks to all those who provided editorial content or images, helping us to compile what we hope is a useful and informative read! Please send any feedback or comments to editor@modernretail.co.uk.

Modern Retail is published by Considered Digital Ltd (Registered Company Number 12684643).

2

A MODERN RETAIL PUBLICATION

THE REAL VALUE OF POST-PURCHASE COMMUNICATIONS

By Rory O’Connor, Founder and CEO of Scurri

“A high-quality postpurchase experience is a crucial differentiator for retailers and brands improving the customer experience and creating important revenue opportunities“ While sales completed will always sit at the top of the P&L above often socalled soft benefits, such as loyalty and repeat purchases, boosting customer lifetime value and protecting customer acquisition is critical for profitability.

Part of the problem is that postpurchase is a relatively unknown product category partly since such a large section of the experience is managed by the third-party courier, not the original brand itself. But the truth is that if a company puts a break in communications with its customers between the initial sale and the subsequent marketing outreach to try

and win the next sale, then the chances of a relationship may have already been lost, particularly as the post-purchase phase is the period during which customers show highest engagement.

Retailers can no longer pass on responsibility after shoppers have completed a purchase, especially in an environment of higher interest rates and increased cost of living as a result of inflation. Both consumer confidence and demand are down, which is making it more difficult and therefore more expensive to acquire new customers. The challenge is how to serve customers in ways that meet their expectations as well as increase sales.

The benefits of continuous communications are many times greater than the cost of investing in the post-purchase experience and the tools to enable it. Specifically, these benefits are higher customer lifetime value, fewer ‘where is my order’ (WISMO) enquiries which eat up resources, and less need to invest in customer acquisition and additional retention strategies.

The key word for post-purchase A MODERN RETAIL PUBLICATION

3

experience is control; it is only through control and therefore ownership of the whole ecommerce journey that retailers have the chance to make sure their customers do not go looking elsewhere. Day to day this is about providing consumers with timely notifications of their purchases process and capitalising on the highly engaged post-purchase period.

Scurri’s latest research reveals 90% of consumers see continuous postpurchase updates as a nonnegotiable part of the purchasing journey. Meanwhile, a recent YouGov study revealed over half (53%) of shoppers see the postpurchase experience as the most important part of their shopping experience, with 63% saying that the fulfilment, shipping, delivery and returns stage is when they are most “emotional”.

Additionally, ecommerce tracking emails can get open rates around 117% higher than typical marketing emails and consumers are opting out of sales emails at higher levels than ever before, with recent research showing 57% are now opting out of promotional emails.

Luxury, hand-iced gifting company, Biscuiteers, recently extended its partnership to leverage the new Scurri Track Plus post-purchase 4

A MODERN RETAIL PUBLICATION

experience solution - enabling the company to take ownership of the end-to-end online customer journey.

Scurri Track Plus gives Biscuiteers control over the branding and sending of customer notifications during the delivery process allowing the Customer Service team to have greater visibility and provide a highly personalised service which, as a luxury gifting company, is a critical part of its brand promise.

“Branding is incredibly important to us, so we really want to bring a new level of luxury to the whole gifting experience. The ability to send carrier notifications from us as a brand is a really big step forward for us because it allows us to grow our direct customer relationships.

Additionally, we know tracking emails are the most highly opened across the industry because they contain information that customers really want to know so we get an invaluable opportunity to put the right kind of messaging in front of

our customers at the right time,” explains Lauren Juster, Sales and Marketing Director at Biscuiteers.

This approach then enables Biscuiteers to boost brand loyalty with personalised and highengagement communications where they can upsell products and offers, promote discounts or gifts, and encourage reviews.

Scurri Track Plus offers a powerful rules engine that delivers true oneto-one personalised and tailored delivery communications for each and every online customer purchase, which is automated for scale. Once a shipment is manifested, tracking data then triggers a series of branded customer communications based on configured conditions set by the retailer. From branded tracking emails to branded tracking page and tracking timeline widget, Scurri Track

Scurri’s latest research reveals 90% of consumers see continuous postpurchase updates as a non-negotiable part of the purchasing journey Plus offers a level of automated personalisation not previously available for brands and retailers.

This eliminates third-party tracking communications sent on behalf of a retailer, who can now maintain endto-end communication with its customers, reducing WISMO queries and providing an unparalleled opportunity to customise messages and leverage each moment of the post-purchase journey for maximum return.

WHY RETAIL DIGITAL QUALITY MATTERS MORE THAN EVER

By Carlton Retland, Principal Solutions Engineer, Applause For the last two years, Applause has analysed a representative sample of our testing data to identify the most common flaws in digital experiences and map out how retailers can stop them from reaching customers.

We have uncovered data and insights into the state of digital quality based on our work with retailers, and we’ve been able to provide them with intelligence on how to best approach testing and digital quality.

Key areas of retail insight Overall, we uncovered more than 200,000 defects last year, 71,000 of which were in the retail sector. It’s clear that retail businesses continue to be challenged by the everincreasing complexity in striving to provide digital excellence to customers.

To illustrate these challenges in more detail, this article covers five key areas with corresponding insights from the testing data we gathered from our retail customers.

6

A MODERN RETAIL PUBLICATION

1) Customer journey testing with real customers provides real insights It’s impossible to evaluate the customer experience without input from real or potential customers. You need to understand and evaluate all the interactions customers have with your brand and any friction they experience both online, in store and across other channels. Customer journey friction typically falls into one of four categories: Functional errors Payment issues Poor UX Insufficient operational readiness To truly improve, you need to understand your current state, which may be inconsistent across different teams, products, locations, groups or even individual team members. It’s crucial to find what’s working and replicate that - as well as what’s not working and address those issues promptly and methodically. Once you’ve assessed the current situation, set corresponding quality improvement goals. When your

organisation achieves excellence, establish guidelines for maintaining that position.

2) Payment issues mean lost revenue Without thorough payment testing processes, retailers can’t ensure customer transactions will work successfully. With ever-expanding alternative payment methods on the rise - digital wallets, buy-now-pay-later (BNPL), pay with bank transfer, pay with biometrics - payment testing must adapt and evolve.

However, unless you are testing with real payment instruments, you can’t validate information in complex flows like multifactor authentication, correct charges (taxes, fees, discounts and promotions), accurate earning and redemption of rewards, how a charge appears on a credit card statement or whether certain payment methods or BINs aren’t working properly. Dummy cards and fake accounts can’t test for these things. Real-world testing with live payment instruments is the only way to suss out problems and ensure transactions work properly for every customer, every time.

Our research shows that the prevalence of each type of payment bug remained remarkably consistent with last year. A whopping 84% of all payment bugs were classified as functional bugs or workflow errors.

Without corrective action, transactions will fail, delivering a serious hit to revenue.

3) Accessibility innovation raises the digital quality experience for all customers Improving accessibility helps increase the total addressable market by enabling all shoppers, including people with disabilities (PwD), to interact with your brand more easily by making the customer experience more frictionless. However, our data shows that many brands still have a long way to go to improve conditions for PwD. It’s vital that European retailers understand that by June 2025, they must comply with the European Accessibility Act. Even inadvertent non-compliance will be subject to strict penalties. If you need a starting point for accessibility efforts, begin by ensuring that your digital properties serve screen readers with no issues, as 72.3% of accessibility noncompliance issues involve problems with this key assistive technology.

4) Adept localisation requires more than just translation When retailers enter new markets, A MODERN RETAIL PUBLICATION

7

they require much more than simple language translations for their digital properties. To get new customers on board, your apps need to reflect an understanding of the local language, values, preferences and processes.

Seemingly small errors, like missing translations, incorrect country names, listing incorrect currencies, incorrect date formats, or workflows that don’t align with local customs can cause customers to abandon transactions, resulting in lost revenue and reputation risks.

7%, comprising 94.9% of all bugs found.

For instance, a large global clothing brand was not seeing the conversions it had expected after launching in Germany. It has particularly strong brand characteristics that it needed to represent, and it used a language translation provider (LSP) to translate English to German. Applause was engaged to verify the LSP’s work and discovered important localisation problems and mistranslated words.

Verifying the content in-region helped the retailer to improve messaging and better express the intended meaning.

However, if you are unable to commit the resources to testing end-to-end journeys, data can help pinpoint where you’re losing customers. For example, if customers are not signing up for a loyalty program, you know to look at the application form, flow and information you’re requesting. If customers aren’t purchasing recommended products at expected levels, you might suspect a coding issue tied to the product they are purchasing and its recommended products. Examining the data can help determine which elements of the customer journey might be problematic. Testing these areas can pinpoint areas for improvement.

5) Functional defects comprise up to 95% of all bugs Retail comprised 23.1% of all industry test cycles (37,117). Retail had an average of nearly 2 more mobile wallets tested per cycle (4.5) versus all other industries (2.6), noting a possible shift in retailers prioritising the importance of new payment methods to customers.

The majority composition of bug types – functional, visual and content – identified since last year, is down by 8

A MODERN RETAIL PUBLICATION

While organisations have tried to integrate testing into developer workflows to eliminate these bugs, this poses a challenge for many QA and development teams that are already under considerable pressure.

In addition, teams often prioritise test execution over developing a testing strategy or doing the routine work that makes testing more efficient and effective in the long run.

Digital quality is an intersectional discipline which can’t be viewed in silos. Customer experience, functionality, localisation, accessibility and payments, bleed into one another. Having real people with real payment sources test the different components of an app or digital experience enables you to clearly understand and improve how customers experience your brand.

OPTIMISING ARTIFICIAL INTELLIGENCE TO ENHANCE PRODUCT EXPERIENCE STRATEGY

By Kristin Naragon, Chief Strategy and Marketing Officer, Akeneo With the help of ChatGPT and other conversational AI services, including Google’s Bard, the hype around generative AI has soared over the past few months, with industry experts quick to point to its fast-paced adoption and its potential to significantly revolutionise the retail industry.

From generating product descriptions and dynamic pricing to improving data quality and automating redundant tasks, AI has been monikered as the silver bullet technology that promises to slash time-to-market, quadruple employee productivity and deliver larger-thanlife and compelling customer experiences that supercharge sales.

And while these claims may technically be possible, there’s an implicit caveat and significant prerequisite that AI bandwagoners often gloss over: your product information needs to be optimised and up-to-date before you can start to take full advantage of generative AI (Gen-AI). In short, your Gen-AI capabilities will only ever be as good as your product record.

Magically generating product descriptions in an ecommerce site or marketplace without centralised, complete, and accurate product attributes will only lead to failed product experiences, poor customer touchpoints, and ultimately a damaged brand image.

When it comes to training language models and leveraging AI algorithms, scattered and incomplete information poses significant challenges as AI technology is only as effective as the data it receives. That is why Akeno took the strategic decision to acquire Unifai, the market-leading AI platform for data collection, cleansing, categorisation, and enrichment pioneered by the industry’s leading experts in AI and machine learning (ML).

This acquisition will revolutionise Akeneo’s Product Cloud offering, infusing intelligence and cutting-edge technology to further elevate product experiences for brands, manufacturers, retailers, and distributors globally.

A MODERN RETAIL PUBLICATION

9

Despite the frenetic hype surrounding AI, Akeneo has taken a pragmatic approach to working with customers on how best to leverage AI for PX by providing direct access to more than 20 AI apps available on its App Store. These apps focus on three steps in the process of activating product experiences: 1. Product data collection and cleansing - companies still struggle with collecting, categorising, cleansing, and completing core product data; these AI apps apply deep learning to automate this process.

2. Product information enrichment - companies that are leveraging a PIM to centralise complete, accurate and properly categorised product data are in a good position to leverage Gen-AI apps to help them generate romance copy and formatted product descriptions.

10

A MODERN RETAIL PUBLICATION

3. Product content translation once companies have enriched product descriptions in their PIM, they are now able to leverage apps in this AI category to translate and localise their content for additional market reach.

Unifai stands out as the most adopted of all the Akeneo AI for PX apps, reflecting the immense value it brings to the first and most critical phase of product information activation. Unifai solves three core challenges in the product data collection and cleansing step: 1. Supplier data onboarding cleansing, normalising, and enriching supplier files into PIM systems (like Akeneo) in order to increase productivity, speed time-tomarket and increase product searchability.

2. Supplier pricing integration turning supplier pricing files into

PX-ready data-feeds through a uniform and centralised workflow feeding simultaneously ERP and PIM software, thus increasing productivity and reducing errors.

3. Marketplace seller onboarding cleansing and enriching supplier data into marketplace back-office systems, which helps marketplaces with their seller data onboarding, reduces manual errors, and accelerates timeto-market.

Unifai has already made a significant impact in the industry. Joint customers like Rexel, a B2B distributor, achieved an 80% reduction in manual efforts and a 3x time-to-market acceleration. While sporting goods retailer, Intersport, drove a 50%-time reduction in

product data processing. By integrating Unifai's AI/ML capabilities alongside Akeneo's supplier data onboarding solution, a typical customer can expect to achieve 50%time savings with 98% accuracy in data onboarding processes.

To further help businesses protect their brands from AI stumbling blocks, Akeneo will also be leveraging this acquisition to create the first-ever AI for PX Centre of Excellence. This initiative will openly share with PX professionals the best practices for applying AI to PX, the pitfalls and the latest innovations to ensure the creation of convenient, tailored experiences that drive customer satisfaction, loyalty and ultimately, revenue growth.

A MODERN RETAIL PUBLICATION

11

KEEPING PACE WITH CROSS-BORDER ECOMMERCE GROWTH

By Jonathan Sheard, Vice President, Sales at ESW

What is multi-local fulfilment in cross-border ecommerce and why is it so important that brands can offer it?

While it may seem by now obvious, it is clear that today’s demanding consumer expects a seamless experience when they purchase anything online. And also that an entire order can be placed on the web, fulfilled at the warehouse and shipped directly to the consumer’s doorstep quickly. And while that seamless customer experience is relatively easy to deliver domestically, it isn’t necessarily as easy to replicate cross-border - even though consumers have the same expectations in terms of speed and convenience when shopping internationally as they do when shopping online in their home market.

Online retailers therefore need to 12

A MODERN RETAIL PUBLICATION

have an ecommerce solution that performs flawlessly every time – and in every territory - so that the company delivers on its brand promise for each and every order.

Easier said than done, many companies will say, a view that is further complicated by their need to expand globally into territories that may not only be less mature than the domestic market but where infrastructure and the fulfilment culture are completely different. It would be wonderful to think that online commerce has somehow enforced consistency globally but that is simply not true.

A big part of the challenge comes down to the number of elements and the connections between them. A network requires support for multiple languages and currencies, for example, as well as the expectation of a seamless omnichannel experience.

Fulfilment must also be enabled across various customer touch points and locations, such as ship-to-store, in-store pickup and mobile point-ofsale, with no loss of service in between.

As all of these parts come together in a single infrastructure, that network then needs to be able to support the often rapid growth of the ecommerce business and do so quickly. In the scramble to process orders that ramp up quickly from a particular territory, offering a just-about-good-enough fulfilment service simply won’t build repeat business.

The most efficient solution is to work with a partner that can facilitate multilocal fulfilment via a global distribution network. Multi-local delivery solutions, including incountry warehousing, remove the customs barrier between the brand and the customer. Engaging a vetted logistics network that understands and complies with territory regulations, eases shipping and delivery pressures.

A partner can manage and hold stocks in-market for retailers and has the technology at the back end to control the business logic from where that stock is delivered from – referred to as the Vast and Fast model.

Localised fulfilment is ‘Fast’, but if the order can’t be fulfilled locally because stock is not held in region, then the partner can switch to ‘Vast’, where they ship from elsewhere.

The key benefit is that the supplier can match its brand promise with high-quality delivery, which is proven to have a direct correlation to conversion and repeat custom. It also means they can offer a next-level international service, giving a really accurate delivery date rather than a

transit date. ESW’s Global Voices research of more than 14,000 shoppers across 14 countries revealed 56% of customers wouldn’t purchase from an international website if the brand didn’t provide an indicative delivery date.

Through quality control and reduced delivery times, the brand can always stick to its promise to the customer even where there is a necessary delay. If the product isn’t stored locally, it can be pulled from international stock pools so the customer knows what is available and always has access to the full catalogue of products. The partner dictates where it comes from and how long it will take, and so is always able to help the brand keep its promises.

Crucially, an integrated solution is also about cost savings, but there is a long list of other important benefits, not least reduced carbon footprint from always delivering right first time using A MODERN RETAIL PUBLICATION

13

the optimum method and routing.

Cutting carbon footprint, of course, is not just about cost but about ensuring the loyalty of the increasing number of consumers for whom environmentally friendly deliveries are part of their decision-making process within their paths to purchase.

All the indicators point to a continued rise in cross-border commerce as consumers become more adept at

using it and look further afield for good prices and product variety. In a Statista survey in early 2023, 77% of supply chain professionals expect cross-border ecommerce sales to grow this year.

However, the prize winners will only be those brands that can offer a fulfilment service that complements their brand image – and deliver against their brand promise consistently and time over time again.

LEVERAGING SUBSCRIPTION TO GROW REVENUE AND LOYALTY

By Jason Smith, VP at MoEngage

Using a more creative as well as analytical focus on data, brands can not only defend but also grow their subscription businesses and retail offers to drive more revenues and increase customer loyalty There have of late been a few highprofile stories about failures in the subscription industry, but what this reveals is that this is a market that changes quickly and dynamically, and the players seeking to operate and succeed within it need to be more agile in responding to the trends that are affecting their business models.

Overall, the global subscription box industry, worth an estimated $22.7 billion in 2021 according to imarc, is expected to grow to $65 billion by 2027. The demand is healthy; according to Zuora, 78% of international adults are currently signed-up to subscription services, up from 71% in 2018. Three-quarters

(75%) of these respondents say that they plan to subscribe to more services in the future, in contrast to owning more physical ‘stuff’.

However, the original assumption when subscriptions first came along that once hooked, customers would stay hooked, has been blown out of the water. Despite the huge uptick in demand for streaming services during the pandemic while people were in lockdown, since then, in the face of inflation that is eating into their disposable income, they have left in droves, often never to return or only to ad-based services that retail at a lot less per month.

So, even while the market continues to grow, consumers are dramatically changing their choices, and brands will need take a much closer look at what attracts them in the first place and how cancellation rates can be reduced.

The first good news is, our latest ebook found that nearly two-thirds of subscribers (64%) feel more connected to companies with a direct subscription experience than to companies whose products they simply purchase as one-off A MODERN RETAIL PUBLICATION

3

transactions. But there are a series of steps that need to be followed to get non-customers on board, sell to them and win them back if they look like they might stray or lapse. Given the high dropout rate at this stage, it is important to entice them back not just with offers, but mechanics that get them engaged, such as a challenge. The invitation to sign up must then be simple, compelling and with a high perceived value, which may be an offer but equally, it may be a simple set of instructions on using the app or service.

Crossing the chasm between free trial and moving to charging can be daunting but rather than waiting until the trial ends, the journey should be populated with communications that make it easy for them to sign up, such as emphasising the value of particular features and showing how these can be used.

Once they have signed up, the engagement should accelerate, not in a way that is intrusive, but helpful and again emphasising value such as moving to a premium level service. If a customer looks like they might cancel or has asked to cancel, brands need to go into recovery mode rather than give-up, which might mean free periods, reminders as to why they subscribed in the first place or free gifts, all communicated over time rather than all at once. Or 4

A MODERN RETAIL PUBLICATION

it may mean changing the offer entirely, as 18% of customers say they cancelled their subscriptions because their needs changed.

Key to success here and then to building loyalty and repeat business is insight into customer types and therefore behaviours.

One size does not fit all, and while your different offers can never be as varied as your customers’ different types, behaviours and preferences, you can test and learn to build a picture over time and segmenting based on what you get or do not get back. Giving all the goodies away to everyone on day one is costly, unsustainable and certain to create an entitled set of customers who soon get bored; better to start small and build over time with a breadth of benefits provided at regular intervals.

Building these insights will depend on asking questions such as, what content do they consume the most;

which subscriber cohort is most likely to be a brand evangelist; what drives my subscribers to engage with me; is it price, feature updates, usage-based rewards, or exclusive membership upgrades drive engagement; what product features do your most engaged subscribers adopt more frequently than your churned subscribers; what channels are your subscribers most active on; and, what is the time your subscribers will most likely respond to communication?

Putting all this data to best use will depend on a platform that can handle the complexity and help brands to understand and optimise a customer’s lifecycle, from registration to renewal, necessitating a platform that captures data through apps or websites and provides personalised communications, which are highly contextual for customers across channels.

Thanks for reading!

For more retail advice and inspiration, visit modernretail.co.uk