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With headwinds like inflation and rising customer acquisition costs, attracting new customers is getting more challenging for brands and retailers. In this environment, growing relationships with existing customers becomes more important.
It’s a time when a great customer experience shines through. That makes ecommerce merchandising a key function, as teams seek to connect shoppers with the right products, and build loyalty so that they return.
If it’s successful, a great experience may appear seamless. But there’s a lot that happens behind the scenes to make it happen. In the center of this are merchandising teams that serve as orchestrators of the types of seemingly small changes that can have a big impact on revenue.
“They are unsung heroes,” said Lauren Lang, senior content marketing manager at Constructor.io, a search and product discovery solution for large retailers. “There’s so much work, planning, creativity and optimization that goes into creating a compelling customer experience online.”
To dig deeper into the role that merchandising teams play, Constructor.io conducted a survey of 100 people doing this work at enterprise companies with more than $100 million in annual revenue.
The findings show that these teams have lots on their plate. The survey showed that 99% of the employees have responsibilities that are outside of merchandising itself, while 48% work at least five hours over their regular schedules each week. Further, the survey showed a disconnect between management views of workload, and employee views. About one in two employees feel they don’t have time to complete tasks each week, while 77% of managers feel their teams have an appropriate workload.
This comes as merchandising's role within an organization is occupying a less clear place. At some firms, it is combined with marketing. At others, it is under the more general role of ecommerce manager. This can put a strain on the potential for proper resources to be allocated toward customer experience.
(image via Constructor)
At the same time, teams are spending a lot of time on routine tasks like fixing typos, creating synonyms and managing redirects. In the survey, 57% of employees reported that merchandising teams spend at least 20 hours per week on manual work. Further, 40% of small teams spend at least 30 hours per week on these kinds of activities. Even so, 58% of respondents say they like this work, while others found them repetitive and even boring. Given that 40% of associate level employees have been in their current position for at least three years, there are also signs that advancement opportunities are more limited.
Yet the most fulfilling work for members of these teams comes from the moments that they can contribute holistically, collaborate with others and be creative in ways that contribute to key metrics like revenue, conversion and customer satisfaction ratings. The survey showed they’re getting room to do this work, as 95% of employees feel they can be creative, while 91% feel they are contributing to business goals.
“They really do enjoy the work that they do,” Lang said. “The question is, how do we help them do the creative and fulfilling parts of their job, and how do we minimize the parts that are burdensome to them?”
It’s a place where technology can potentially play a role, especially given all of the data that is collected by brands and retailers. In particular, AI can automate tasks that free up merchandisers for more creative and strategic work. Rather than believing it is coming for their jobs, the survey indicates that merchandising teams are open to using this technology. Constructor.io reports that 94% of employees have a positive view of AI and its use in ecommerce, while 85% of large teams say that they are already using it to some degree.
To be sure, there’s a balance to strike. Merchandisers still want to have the ability to make changes to the AI where needed, but overall there’s a receptiveness to introducing it.
“What we’re seeing is an evolution perhaps in the way that merchandisers are thinking about technology, and how technology has evolved to not be a black box that you can’t understand and you can’t look into and can’t change if you need to change,” Lang said. “I think we’re seeing this cooperation between the merchandisers and the technology that they use where they can both make each other better.”
The technology doesn’t only have to be for routine tasks, either. It can be applied in service of solving the key challenges facing a business. For instance, companies collect troves of data on customers. But Lang still sees a “disconnect” between that data and how it’s applied to improve the customer experience. With that experience rising in priority, there’s potential that AI could help navigate through the headwinds.
“There’s going to have to be more interest because that’s what is going to be required to stand out in this economy,” Lang said.
Merchandisers are the internal champions of that customer experience. The report indicates that they are open to introducing technology that will help them to improve it, at a time when it is needed most.
Trending in Shopper Experience
Ask Instacart answers prompts with personalized recommendations.
A pair of recent launches from Instacart highlight how the grocery ecommerce company is integrating two of the key emerging areas of technology into its offerings: Generative AI and marketplaces.
Let’s take a look:
Instacart is seeking to harness generative AI to create a more personalized shopping experience.
A new tool called Ask Instacart that is launching this week is designed to allow customers to type in questions about specific recipes or general recommendations for an occasion. Embedded in the search bar, Ask Instacart also provides personalized questions to be asked by customers. In addition to specific items, it provides information about food preparation, product attributes and dietary considerations.
For those eying how generative AI will play a role in the shopping experience, Ask Instacart shows how search can be transformed into a place for discovery. Instacart is aiming to provide answers to the more open-ended questions that people would naturally ask, not just simply provide info in response to a question that has one answer. It shared the following sample prompts:
- “What fish is similar to salmon?”
- “What can I use in a stir-fry?”
- “What are dairy-free snacks for kids?”
The tool is also showing the way for generative AI to integrate with retail media. Ask Instacart is designed to integrate with a brand's sponsored products campaign, so that the answers to questions that match consumer needs can also provide a way for brands to stand out.
To create the tool, Instacart combined the language understanding of ChatGPT with its own AI models. It added in catalog data from 80,000 retail partner locations around the country, which together have more than one billion shoppable items.
Beyond mission: Ecommerce marketplaces have honed a shopping experience where it’s easy to find what you’re looking for. But if shoppers want to happen upon something they didn’t know they needed, social media or the store is still the best place to visit. Instacart is showing how generative AI can make discovery a marketplace function. It also signals that advertising will come to generative AI by way of retail media. Going forward, the growth of discovery could make retail media more valuable as a tool for advertising that raises brand awareness, not just lower-funnel conversions.
A virtual store
Instacart will power a new virtual convenience store for the grocery chain Aldi.
Aldi Express will feature 2,000 of the most-shopped Aldi items, ranging from prepared food and snacks to grocery staples.
Drawing on 2,100 Aldi locations around the country, items will be delivered as fast as 30 minutes, the companies said.
“Through ALDI Express, we’re making shopping more convenient so you can satisfy a craving or get a missing ingredient in minutes,” said Scott Patton, VP of National Buying at ALDI, in a statement. “Together with Instacart, we’ll continue to find ways to innovate and make the online grocery experience even more effortless and accessible.”
Aldi began offering delivery via Instacart in 2017, and has since expanded services to include pickup as well as alcohol delivery.
Aldi’s marketplace moment? While Aldi previously offered delivery, making the assortment available through a virtual store offers the opportunity to create a marketplace for its goods. With the virtual store, it will more closely resemble DoorDash and Uber Eats, which have been expanding their grocery assortment. With a marketplace, additional revenue opportunities could open up for the grocer, such as advertising through retail media.