E-commerce Logistics Success Starts Before the Customer Hits 'Buy'

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Not that many years ago, few people in retail understood the importance of the e-commerce customer journey. Yes, retailers tracked buying habits. Some offered "recommended products" based on these habits. Others created reward programs for frequent shoppers. But the customer journey was most often defined by each of the silos that made up an e-commerce transaction.

That is changing, in no small part because of the COVID-19 pandemic. What the pandemic has taught retailers is that even if they optimize the e-commerce experience, the logistics part of the equation can turn a satisfied customer into an unhappy customer.

Eli Finkelshteyn, founder and CEO of personalization platform Constructor, told Modern Shipper this week at the National Retail Federation's Big Show in New York that improving the overall customer experience, including the last-mile delivery portion of that journey, starts with retailers offering improved product suggestions.

When Adobe Analytics reported its data from the 2021 holiday shopping season, it found that there was a 10% year-over-year increase in out-of-stock messages for e-commerce shoppers. That was up 253% from 2019. In a Digital Commerce 360 and Bizrate Insights survey of 1,033 online shoppers, 25% said they searched online for items in stock and ready to ship.

It is that last item that firms like Constructor are helping to solve for. Constructor works with retailers to help them create personalized shopping experiences for consumers. This includes tracking data and shopping patterns to make more relevant product suggestions.

"Maybe I'm starting to learn that the shopper only buys black masks, so I probably wouldn't show them green masks," Finkelshteyn explained.

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The company talks to retailers to determine what business metrics are most important to them. Because Constructor offers an open platform — what Finkelshteyn calls a "product discovery platform" — nearly any data point the retailer collects can be incorporated into the system and optimized to improve the search recommendations.

"We want to make this transparent," Finkelshteyn said. "It's not just helping the customer find the best product but informing the retailer on why the customer [chooses that product]."

While Constructor is focused on improving the customer experience, what 2020-2021 taught everyone is that the last mile of delivery is an important part of that experience. Finkelshteyn said the platform can incorporate inventory and shipping platform data to ensure the options the customer receives can be delivered.

"That shipping problem is different to different retailers," he said. "Each retailer's data as a result is very different."

To illustrate how a personalization platform assists with a successful delivery experience, Finkelshteyn gave a typical e-commerce example.

"As I learn more about you as a customer and I see that everything you have in your cart is pick up from store, and then you search for a Red Delicious apple and it is only available in the warehouse, then I probably shouldn't show you that as an option," Finkelshteyn said. "But if the store has a Golden Delicious apple, I might want to show that."

The goal is to help the retailer build a relationship with the customer, and that means building trust.

"It's not just about giving back results, it's about giving back relevant results," Finkelshteyn said, and increasingly, that means items that can be shipped to meet customer expectations.

Finkelshteyn said because retailers define the metrics, they can tell Constructor what is most important. If faster shipping is important, the system can be optimized to offer product suggestions that meet the criteria, including using distance to the end consumer or delivery provider as possible sorting parameters.

"It doesn't matter to me if I have this item in inventory if I have to ship it from Vietnam," he said. "If it [or something similar] is available in Tennessee, obviously I have a preference."

E-commerce personalization is becoming big business for retailers and has shown to boost sales. It is also increasingly being used to connect the entire customer journey, right through shipment to the door and even a return if necessary.

"The way we think about it is that the best world is where retailers and consumers both win," Finkelshteyn said.

Click for more articles by Brian Straight.

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This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.