E-Commerce: From Online To Offline
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E-Commerce: From Online To Offline

How nice the world of e-commerce would be if there was no competition, and customers would for once be satisfied. But alas, life is tough, and companies must increase their efforts to bind customers.

E-commerce is getting more complex by the day. The reason is obvious: even though the online market is growing compared to traditional trade, the competition is growing, too. Many new providers are flooding the market. Additionally, more and more stationary shops are taking a leap of faith and take their businesses online, profiting from broad customer bases or local services.

Algorithms for customer satisfaction

A growing trend in e-commerce is artificial intelligence, which here means communicating and self-learning systems. This can for example be a shopping platform that quickly recognizes customers’ preferences and suggests products based on these insights. Another example would be ever improving chatbots that can seem very human.

These algorithms and AI systems even work if customers are still unknown to the platform. Through shopping behavior and already existing cookies, insights can be gained even if customers do not provide any personal information to the shop itself.

Furthermore, a lot of online shops will try to get customers to at least enter their e-mail addresses and accept the terms of service. If customers then also accept the occasional newsletter, shops can advertise suitable products ever more accurately.

This way, an online shop is assuming the role of a vendor in a stationary store who assists customers and knows all their preferences and wishes.

E-commerce: from online to offline

Most companies go from stationary shops to online platforms, but it can also work the other way around. Offline stores of online vendors are a small, but growing trend.

I do not mean Go stores for groceries without cash registers in the USA, but rather something like Amazon’s new experiment, Amazon 4-Star. In stationary shops, the intrinsic structure of an online shop is replicated. The products are grouped the same way they would be online, including the recommended section.

Alibaba calls its shop AI Fashion Store. Obviously, AI stands for artificial intelligence. However, this shop not only profits from algorithms, but also possibilities only feasible in a stationary shop.

A “recommendation engine”, for example, suggests more products like the one customers are currently trying on. What’s more, it also recommends products from shops it partners with in the immediate vicinity for maximum customer satisfaction.

A special case will be Amazon’s #HomeofChristmas shop which will reside for five days in Berlin, Germany next November. If customers find products they like, they can simply scan the labels and have them delivered to their home address as per usual. A smart idea – an offline store with online functionalities.

E-3 Magazine December 2018/January 2019 (German)

About the author

Michael Kramer

Michael Kramer is an expert in all things digital transformation, with a lot of experience in the SAP community. Kramer is also a member of the supervisory board of E-3 publisher B4Bmedia.net.

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