We often hear about the revolutionary new AI technologies that will transform our lives in the future. But what does this mean for your subscription store today? Without delving into the complexities of machine learning, deep learning, and other AI technologies — topics you can explore elsewhere — let’s look at some practical applications.

Customer Support

The first application that comes to mind is customer support. At the time of this writing, Recharge is introducing AI SMS for customer support. Customers no longer have to sift through documentation or struggle to articulate their issues to store support representatives. AI SMS acts as a powerful resource, learning from thousands of customer interactions to provide quick and effective responses. For instance, if you want to skip your next shipment, you simply type your request as a text message, and Recharge AI will respond with a link to a page where you can easily click the SKIP button. If you're familiar with ChatGPT, AI SMS operates similarly, possessing extensive knowledge about the Recharge platform that surpasses what any human could learn in a reasonable timeframe.

Product Recommendations

Another significant AI application in eCommerce is product recommendations. By analyzing your buyers' order history, AI can identify connections between previously purchased products and suggest the ideal items for upselling or cross-selling at various points in your store—such as in the cart, during checkout, on the order confirmation page, or within the customer portal.

Conversion Rate Optimization

CRO, or conversion rate optimization, aims to maximize the number of visitors to your store who become buyers. Similar to upselling and cross-selling, AI can be utilized to optimize various UI elements of your store and deliver the most effective version to enhance conversion rates. Traditionally, the conversion optimization process involved tedious tweaking and testing, along with human analysis, but AI can execute this much more quickly and efficiently.

Moreover, these AI-driven optimizations can be personalized for each visitor and buyer. While traditional programming methods can achieve similar results, AI does this significantly faster and with a greater impact.

Inventory management

On the backend, we find more applications. Required inventory levels can be seasonal and subject to all kind of factors. AI can learn about your business and try to predict the optimal level you should carry at any time.

AI can significantly enhance inventory management for online stores in several ways:

1. Demand Forecasting:

AI algorithms analyze historical sales data, seasonal trends, and external factors (like holidays or economic conditions) to predict future demand accurately. This helps businesses maintain optimal stock levels, reducing both overstock and stockouts.

2. Automated Inventory Tracking:

AI can automate tracking inventory levels in real-time, ensuring that store owners receive timely alerts when stocks are low. This reduces the likelihood of human error and improves accuracy.

3. Smart Reordering:

With AI, online stores can implement smart reordering systems that automatically generate purchase orders based on predictive analytics. This ensures that inventory is replenished before it runs out.

4. Optimizing Storage Space:

AI can analyze sales patterns and help determine the most efficient way to store products in warehouses. This simplifies picking processes and maximizes storage capacity.

5. Dynamic Pricing:

AI tools can adjust prices dynamically based on inventory levels, demand fluctuations, and competitor pricing, helping to maximize sales and profitability while managing stock levels effectively.

6. Anomaly Detection:

AI can identify anomalies in inventory data, such as unexpected drops in stock levels or discrepancies between reported and actual inventory. This can highlight potential issues like theft or errors in data entry.

7. Supplier Management:

AI can analyze supplier performance and delivery times, helping online stores to negotiate better deals and manage relationships with suppliers more efficiently.

8. Customer Insights:

By assessing customer purchase behavior, AI can provide insights into which products are likely to be in demand, helping businesses to make informed decisions about which items to stock more heavily.

9. Product Lifecycle Management:

AI can monitor the performance and sales of products throughout their lifecycle, providing insights into when items should be discounted, promoted, or phased out.

By incorporating AI into inventory management, online stores can streamline operations, reduce costs, and improve customer satisfaction through better product availability.

Logistics

Efficient delivery of bought goods to your customers can be a mathematical challenge. AI again can help with these problems, where it uncovers inefficiencies or suggest optimal routes.

AI can greatly enhance the shipping processes of online stores in various ways:

1. Optimized Shipping Routes:

AI algorithms can analyze traffic patterns, weather conditions, and historical data to determine the most efficient shipping routes. This reduces delivery times and transportation costs.

2. Dynamic Shipping Pricing:

AI can adjust shipping costs based on various factors such as demand, delivery speed, and package size. This allows online stores to offer competitive shipping rates while maximizing profitability.

3. Predictive Delivery Estimates:

AI can analyze factors that affect delivery times, such as current shipment volumes and carrier performance, to provide more accurate delivery estimates. This helps set realistic expectations for customers.

4. Inventory Synchronization:

AI can ensure that products are shipped from the nearest warehouse or fulfillment center to the customer, reducing shipping time and costs while improving overall efficiency.

5. Automated Labeling and Documentation:

AI can streamline the labeling process by automatically generating shipping labels and customs documentation, reducing the workload for staff and minimizing errors.

6. Real-Time Tracking and Notifications:

AI can facilitate real-time tracking updates, allowing customers and businesses to monitor shipments at every stage. Automated notifications about shipping status keep customers informed.

7. Fraud Detection in Shipping:

AI can analyze shipping data to spot patterns indicative of fraud, such as unusual delivery addresses or order quantities, helping to reduce losses from fraudulent activities.

8. Customer Service Enhancement:

AI-powered chatbots can handle shipping inquiries and complaints, providing instant responses and support to customers. This reduces the burden on customer service teams while improving customer experience.

9. Carrier Rate Comparison:

AI can compare rates and services among multiple carriers to identify the best options for each shipment, ensuring that businesses utilize the most cost-effective shipping solutions.

10. Post-Delivery Analysis:

AI can analyze delivery performance data, including delays, damages, or customer feedback, to identify areas for improvement. This information can inform decision-making for future shipping strategies.

By leveraging AI in shipping processes, online stores can improve efficiency, reduce costs, enhance customer satisfaction, and ultimately gain a competitive edge in the marketplace.

Analytics and Reporting

The vast amounts of customer, order, and fulfillment data are becoming increasingly challenging for humans to analyze. AI, on the other hand, excels at processing big data and uncovering new, hidden patterns that are not easily visible to the human eye.

AI can significantly enhance analytics and reporting for online stores in several impactful ways:

1. Data Collection and Integration:

AI can automate the collection of data from various sources—such as sales, customer interactions, and website activity—integrating it into a single platform for comprehensive analysis. This reduces manual effort and increases accuracy.

2. Advanced Insights and Trends:

AI algorithms can identify patterns and trends in data that may not be immediately obvious through traditional analysis methods. This helps businesses understand customer behavior and preferences more deeply.

3. Predictive Analytics:

AI can leverage historical data to predict future trends, sales, and customer behaviors. This allows online stores to make informed decisions about inventory management, marketing strategies, and resource allocation.

4. Customer Segmentation:

AI can analyze customer data to create detailed segments based on behavior, preferences, and demographics. This enables tailored marketing campaigns and product recommendations, increasing engagement and conversion rates.

5. Performance Tracking:

AI can track key performance indicators (KPIs) in real-time, providing instant feedback on marketing campaigns, sales performance, and website traffic. This allows for prompt adjustments to strategies.

6. Automated Reporting:

AI can generate automated reports that compile relevant metrics and insights, saving time and ensuring consistent updates for decision-makers. Reports can be customized to focus on specific areas of interest.

7. Natural Language Processing (NLP):

AI leveraging NLP can enable users to query data using plain language, making it easier for non-technical users to access insights without needing advanced analytical skills.

8. Anomaly Detection:

AI can identify unusual patterns or anomalies in data, such as sudden spikes in sales or unexpected drops in traffic. This allows businesses to respond quickly to potential issues or opportunities.

9. Sentiment Analysis:

AI can analyze customer feedback from various sources, such as reviews and social media, to gauge customer sentiment toward products and the brand. This information helps refine marketing and product strategies.

10. Real-Time Performance Optimization:

AI can provide actionable recommendations in real-time based on ongoing data analysis. This helps businesses quickly adapt to changing market conditions or customer preferences.

By incorporating AI into analytics and reporting, online stores can enhance their decision-making processes, improve operational efficiency, and ultimately drive better business outcomes.

Finding Answers

One of the most obvious uses of AI, although not yet adopted by everyone, is answer-finding. ChatGPT can provide instructions and answers to virtually any question you input. It is truly an amazing resource that can save you considerable time.

Design and Development

AI is also making its mark in software and website development. It can generate stunning and creative images from simple prompts. For example, if you need a picture of a cat playing a guitar, AI can produce that within seconds.

Furthermore, developers are leveraging AI as well. Code can be generated in any programming language with just a few straightforward prompts. While a developer is still necessary to ensure that the code functions correctly in a larger context and meets its intended purpose, AI is an excellent tool for idea generation and for accelerating the process of writing and testing computer code.

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The Conversion Mistake New Store Owners Make

Many store owners who are new to eCommerce think that traffic to their store is the most important thing. They spend most of their time pursuing various sources of traffic but they ignore the conversion on the store. They put together a store of sub-optial looks, don't care about the best practices and conventions or what buyers expect and respond to - because they don't now these things, and they firmly believe that if you can get people to store then they will buy.

Traffic x Conversion = Sales

Unfortunately people also leave stores for various reasons. Sales = traffic x conversion, and improving conversion is usually a lower hanging fruit. It is much easier to double or triple conversion of a poorly designed store than it is to achieve same numbers on traffic. However result is the same.

Poor Design = Lost Opportunities

Another downside of neglecting conversion with store that is poorly designed is that many store visitors will leave the site simply because it doesn't look right or trustworthy. These first time visitors will most likely never come back. Thus investing in traffic but not taking care of the store is throwing your money away. Not only you don't get all the sales that you could but you also loose many people for good. Take care of your store before you invest thousands of dollars in traffic. You will see a much better return on your investment.

Final Note on Conversion vs. Traffic

In this blog I wrote many posts about conversion alone, but I felt that I also need to emphasize it in relation to traffic for those folks who skip those posts and go straight to the marketing section looking for yet another traffic source to pursue.

The post What’s this conversion anyway? first appeared on SELLTEK.

It is stated that as many 68% of store visitors who leave store w/o buying it at checkout. This is really bad because most of it is preventable. In this post I list most common reasons why people leave. Statistics are from a reputable study done by Baymard Institute in 2016.

Why Do So Many Shoppers Abandon Checkout?

Reasons are listed in order from the highest % stated by visitors to the lowest:

1. 61% Extra costs were too high (shipping, tax, fees).
2. 35% The site wanted me to create an account.
3. 27% Too long / complicated checkout process.
4. 24% I couldn't see / calculate total order up-front.
5. 22% Website had errors / crashed.
6. 18% I didn't trust the site with my credit card information.
7. 16% Delivery was too slow.
8. 10% Returns policy wasn't satisfactory.
9. 8% There weren't enough payment methods.
10. 5% The credit card was declined.

The post Store Checkout Problems in Numbers first appeared on SELLTEK.

What Is Software Usability?

Software usability, including online stores, is an aspect of design that has a profound effect on how users experience your store. Characteristics of good usability are attributes such as intuitive, easy to use, and natural. These desirable characteristics are achieved with position of buttons, use of color and font, design of navigation, hints, explanations, and icons, layout, and workflows. They must all in a natural way render functionality that the software is designed to provide.

What Poor Usability Looks Like

One way to describe what is good usability is to describe what it is not: User is having hard time finding controls to accomplish tasks. Controls have too many states that are hard to understand. User is after few clicks lost and does not know where he is on the site. Pages load slowly. There is lack of consistency and multiple paradigms are present on different pages. Needles to say, poor usability leads users to become frustrated and they leave the site thus lowering conversion.

Importance of Familiar Conventions

Besides the elements above, an online store must follow certain conventions that visitors are already used to from other stores. Home page, product detail, cart and checkout need to be particularly well designed. for example, it is estimated that 60% of visitors who leave the site do so at checkout. Many visitors bounce as soon as they hit the home page. Maybe its to much text and not enough images, or the page gives certain impression that is not of high quality, or there just isn't anything interesting to go on.

Why Shop Owners Should Not Test Their Own Usability

All custom made software must be tested for usability. Same goes for when shop owners make changes to themes. There are two factors why developers and creators are not good usability testers. 1. They know too much and cannot see anymore the site as the new visitor does and 2. As professionals, they are most likely already familiar with the paradigm and it is therefore easier for them to figure out how to use even a software they see for the first time. These facilitate the need to test software, apps, and shops for usability independently by a third party.

There are different usability test methods.

Two Usability Testing Methods

1. Heuristic Review

A heuristic review is done when a trained professional goes over the site and applies his analytical skill to identify trouble areas and recommend the improvements. It is his knowledge of the domain and experience with similar sites that allow him to see what is done wrong.

2. User Testing

User testing is when a group of would be users are given tasks to perform on the site and they are observed by professionals how are they doing it. User testing is a good way to see how users will experience the site and where they have problems. This review is more involved and takes longer, dependent on the number of users doing the tests.

To finish this post, I want to do it with a quote by a foremost authority in usability testing who summarized the desired user experience into: Don't make me think! When the software, store or an app feels natural and easy to follow that is when usability is being achieved. For more information or for help with your online store, you can reach me here.

The post How Good Usability Increases Conversion first appeared on SELLTEK.

It is an uneasy feeling when many people come to your online store and then leave w/o buying anything. Some percents are expected but others can be helped with. To better understand what makes too many visitors leave your site w/o buying, I compiled a list of factors that you can check against and see if some factor may be lacking on your store. Every online store owner with a conversion problem should examine it carefully.

Common Reasons Shoppers Don't Convert

1. Product Demand

As much as you think that some product is interesting, there may be insufficient demand from the buyers. There could be too many sellers already selling it, the price could be better on other sites, or the product is complex and new and people still need education. Whatever the reason, you need to understand what is happening before you allocate effort into traffic and conversion improvements that will not help. That is not to say that demand can not be changed but you need to simply know if this is the reason for lower conversion.

2. Product Price

While product's price is intimately connected to demand it deserves its own section. Price can be either too high or too low. If you set it much higher than can be bought elsewhere then buyers will obviously buy it elsewhere. But price can be also too low and will hurt the conversion. For example if you sell an otherwise $3,000 designer item, like a pair of designer shoes, but on your site they cost $300 without explanation, buyers will reasonably assume that there is something wrong with the item. Also, for items that are new and value is not easy determined, you need to provide enough information so buyers will know that the price is a good deal or at least fair. For example, I saw a nice wooden frame watch on some new site yesterday and it cost $49. Problem was that besides a pretty picture I could not tell from product description if the watch was worth $9 or $99. A few words on what mechanism is inside, who makes it, and what is its warranty would have most likely convinced me to buy it instead I decided to pass.

3. Product Description

Product detail page is a place where you actually sell your product. Good and informative description can make or brake customer's decision to place your item in the shopping cart. Description should include images, inform buyers about the use and the benefits, list features specifications and anything that you would want to now if you were the buyer. Not too long and not too short is the perfect length. Make sure images are of high quality and with proper background. good product descriptions is essential for driving traffic to your store through SEO as well.

4. Branding

Branding is a fuzzy topic to talk about but everyone sees it when its presented or when it is lacking. Branding is a visual, mental, and any other presentation of your business that is unique to you. You achieve it with logo, site colors, business cards, email templates, consistent messaging, tag line and anything else you can think of. If brand achieves a good status, the buyers form a relation and trust with the brand. Good examples are Apple, Amazon, BMW where everyone instantly forms an image once the name is presented. To develop a well known brand takes effort and time. As a store owner, who is just starting, you can however still make a consistent appearance and a nice logo. The absence of these is as damaging to conversion as is having a strong brand very useful.

5. Trust

When visitors come to your online store they must trust you if you want them to buy. In online world, trust is even more important than in physical stores. 1. You pay for your order with a credit card while you never saw anyone who works for the store. 2. You don't know if store owner has products that are on pictures. 3. You don't know if they will be shipped. 4. You don't know if the express shipping you paid for will be observed. 5. You don't know how difficult will be to return the products. There can be more but these should get point across why trust in online world is important. These are all obstacles a store must overcome, especially with first time buyers. Some techniques you can use is to make a secure site (SSL certificate or https), list testimonials, get a BBB (Better Business Bureau) certificate and place it on the site, become a Google certified store, get some press coverage, list phone number and address of your store, show picture of the store, offer live chat, and more.

6. Imagery and Visual Appeal

Picture is worth a thousand words. Nowhere is that more true than in online shopping. Beautiful imagery can make or break your site. If you sell apparel or shoes, the image is the main presentation and decision factor in making a sale. Images, site colors and other graphic design features work on conscious as well as subconscious levels. If you are not good at it, hire a graphic designer or at least have one to look at your site and tell you what they think. Looks may or may not break the conversion but if there are other factors present it may just make the difference.

7. Standard Policies

Four standard policies should be displayed on your store: Terms of Use, Privacy, Shipping, and Returns. While Privacy is more or less dictated by laws and some common sense such as not reselling customer emails and sharing their private information the Terms policy has an important Returns policy in it. Both, Privacy and Terms policies are expected on page by the customers even if many don't read them. Shipping and Return policies on the other hand are read by most customers. They should all be easily found in the footer of every page of your store.

8. Shipping Options and Costs

Different customers have different expectations and needs about shipping. Some care about cost, some about speed, and some like a particular balance between cost and speed. Inadequate shipping options can be a deal breaker. Nowadays stores try to display shipping costs as soon as possible in the checkout, offering free shipping for certain orders, and a variety of delivery options. Th important thing to note is, that not all customers have same expectations or needs.

9. Returns, Exchanges, and Refunds

There is no doubt that customers want to be able to return things they buy in case they don't like or if something is wrong with the products they have received. Returns is a rather complex legal, operational, and selling topic. some items like downloaded software or food and other perishables cannot be returned or it makes no sense to return them. you should think about returns before you start selling. some sellers charge restocking fee or they don't pay for shipping when item is returned even if it is for good reason. Everything has consequences. Situation you need to think of and which require different actions are: returns because you shipped the wrong product, buyer claims that product description on your store was not what was delivered, product was defective, product was damaged in transport, item doesn't fit - frequent with shoes and apparel, or the buyer simply changed her mind and wants to return the product. In some cases product can be exchanged in other the only solution is to refund the money. Complete returns program is beyond the scope of this post but I plan on writing another post that will cover this interesting topic in more detail.

10. Payment Options

Payment options on store are similar to shipping options thought they address different needs. Some customers care very much about the security and prefer to pay with a PayPal. Dependent on the type of products you sell, other options may be appropriate as well such as electronic checks or even cash on delivery or COD, which is a very popular option in Europe.

11. Usability

Usability is part of the user experience. While an easy and intuitive web store is almost expected, it is easy to make it more complicated than it needs to be. A long history of issues and improvements associated with checkout pages is proof that there is always an easier way to do something. Not understanding what is the next step or how to perform it will frustrate the user who then decides to leave your store. Or a user may simply have a hard time navigating around and finding things. Steve Krug, an authority in the field of usability testing famously said: Don't make me think!. That is why usability is a very important factor on your store that can all by itself bring your conversions to halt. Usability can sometimes be hard to pin down since it is as much science as is an art. Many users need to be observed and provide their feedback to see what are most pressing problems to fix. Without proper testing it is easy to fix one thing and create another problem at the same time. Tools such as A/B testing, where 2 versions of feature are presented to 2 different groups of users and observing which one works better are commonly used in fixing and testing usability problems. Analytics tools such as Google Analytics are also used to pinpoint problems on your store in cases when observing users in the controlled test environment is not an option or simply as a complementary method. In this blog post on usability we examine this factor in more detail.

12. Mobile Experience

Over 60% of online shopping is now done on mobile devices. Factors that affect conversion are the same as on desktop with an additional constraint that it is more difficult to type and fill out any forms than it is on desktop. Stores need to be designed in a way to look good on mobile and that usually means different than on the larger monitor. Thing to remember here is that more people visit your store from the phone than on any other device.

13. Abandoned Carts

Abandoned carts management is an attempt to bring back people, who already left your store, to complete their purchase. Emailing cart content and re-marketing -showing again cart content or other looked at products on other web sites as ads, are two standard approaches to improve the conversion.

14. Fulfillment

From customer's standpoint it is a post purchase experience and it comes down to whether the order arrived, undamaged, and in time that was promised. Needless to say, if this part isn't right, the customer is unlikely to come back to your store.

15. Mismatched Expectations

Last but not least are mismatched expectations. They can happen when you do a good job advertising your store but the store then does not match buyers' expectations. This can happen unintentionally when you don't understand well some of your buyers or when buyer for some reason did not understand properly the advertising message. Since this is not a store problem it is rarely mentioned but it is very real. Anyone who has done AdWords campaigns knows how much guessing goes into ads in hope that landing page will be exactly what visitor wants and expects. Mismatched expectation is characterized by a high bounce rate - that is visitors leave the site very quickly as they discover that it is not what they expected. You can prevent this by showing your ads to some of your friends and/or customers beforehand and see what they think. Just being aware of it is also often enough.

That's it. If you keep all of these 15 factors in check you will be in a better shape than if you don't.

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