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By definition, ecommerce employs digital tools to build a shopping experience for the internet. But it’s worth remembering that much of the process of building and designing online stores still requires a human touch.
One area where this plays out is the site optimization process that helps brands and retailers map out the journey that guides a user from the time they click into a site to the checkout. Designers typically use A/B testing, in which different sets of users see certain sets of features and configurations to determine what works.
But this process is still often lacking certainty in results. Often, brands don't run enough A/B testing because they are limited by time and resources, said Parham Aarabi.
Over 15 years working with retailers like Amazon and Sephora to spread adoption of his virtual try-on tool ModiFace and ultimately selling it to L'Oréal, Aarabi saw how the impact of a new feature on conversions could vary by site. On one site, virtual try-on would increase conversions. On others, there would be less.
So the University of Toronto AI professor set out to better understand ecommerce sites by simulating user behavior and how interaction with specific features drove key results.
“The idea was that if you take an ecommerce site and the choices the people make, you always know what impact a choice has – it either takes them to a different page, or adds a product to cart. So that's easy to model,” Aarabi said. “The hard thing is understanding why a user would click on product one versus product two. If you could model user behavior using AI, then we could actually simulate the user journey on the site.”
The result is a new tool that’s designed to help brands and retailers more easily A/B test every element of a site. Predictive Commerce performs tests accounting for a wide variety of actions and choices that people make on a site.
The venture builds a virtual model of an ecommerce site, from the UI elements to the individual pages. It accounts for the size, placement and content of each feature. That includes not just positioning, but also considerations like vibrancy of colors that lead an element to stand out for users.
“We model everything related to the element to the actual click rate that that element has, and then we run this for every single element on the page,” Aarabi said. “And based on this, we can actually [measure], if a user comes on this site, what is the chance that they would click on this image versus this [one] on this UI?”
To determine this, Predictive Commerce runs millions of simulations using AI-generated virtual shoppers to determine conversions, cart rates and revenue per user of each configuration.
In testing on 80 websites, Aarabi said Predictive Commerce had a 94% accuracy rate. By moving faster than human A/B testing, they can also test more types of configurations, increasing the likelihood of arriving at what works best.
“Instead of trying out four or five options, [brands] test 100 options because it's so easy to do,” Aarabi said.
While designing a site or running continuous testing, brands and retailers may go with a gut feel, pick what looks best or even opt for a best practice. But the data may indicate that these options are not actually the best way to drive conversions. Sometimes the optimal journey may look counterintuitive to a human brain. At other times, AI may uncover something designers didn't consider.
Predictive Commerce aims to separate what seems like a good idea from what actually works.
Trending in Shopper Experience
On the Move has the latest from Amazon, Lovesac and more.
This week, leadership is changing at GameStop, Sorel and Beautycounter. Meanwhile, key executives are departing at Amazon, Wayfair and Lovesac.
Here’s a look at the latest shuffles:
GameStop CEO fired
GameStop announced the termination of Matthew Furlong as CEO on Wednesday. A brief statement did not provide a reason for the firing.
With the move, Chewy founder and activist investor Ryan Cohen was named executive chairman of the video game retailer. Cohen will be responsible for capital allocation and overseeing management.
It came as the company reported a 10% year-over-year decline in net sales for the first quarter. Meanwhile, the company’s net loss improved by 62%.
In an SEC filing, GameStop further added this “We believe the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while also focusing on capital allocation under Mr. Cohen’s leadership will further unlock long-term value creation for our stockholders.”
Cohen was revealed as GameStop's largest shareholder when he disclosed a 10% stake in the retailer in 2020. GameStop went on to become a leading name in the meme stock rise of 2021.
Sorel president steps down
Mark Nenow is stepping down as president of the Sorel brand in order to focus on his health.
After rising to the role in 2015, Nenow spearheaded a transformation of Columbia Sportswear-owned Sorel from a men’s workwear brand to a fashion-focused brand that led with a women’s offering of boots, sandals and sneakers.
“Mark led the brand to sales of $347 million in net sales in 2022,” said Columbia Sportswear CEO Tim Boyle, in a statement. “His leadership has been invaluable to this company, and we wish him the very best.”
Columbia will conduct a search for Nenow’s replacement. Craig Zanon, the company’s SVP of emerging brands, will lead Sorel in the interim.
Beautycounter appoints interim CEO
Beautycounter appointed board member Mindy Mackenzie as interim CEO, succeeding Marc Rey. According to the brand, Rey and the board “mutually decided to transition to a new phase of leadership for Beautycounter.”
McKenzie, a former executive at Carlyle, McKinsey and Jim Beam, will lead the company as it conducts a search for a permanent CEO. Additionally, former Natura & Co CEO Roberto Marques will join Beautycounter’s board as chair.
As part of the transition, Nicole Malozi is also joining the company as chief financial officer. She brings experience from Tatcha, Nike, and DFS Group Limited.
Amazon’s North America fulfillment chief departs
Melissa Nick, a VP of customer fulfillment for North America at Amazon, will leave the company, effective June 16, CNBC reported. Nick joined the company in 2014, and oversaw a region that included nearly 300 fulfillment centers. After doubling its supply chain footprint during the pandemic, Amazon recently reorganized its fulfillment operations to take a regional approach, as opposed to a national model that often resulted in items shipping across the country.
Wayfair’s chief commercial officer to retire
Jon Blotner (Courtesy photo)
Steve Oblak will retire from the role of chief commercial officer at home goods marketplace Wayfair. With the move, Jon Blotner will be promoted to chief commercial officer.
"Steve has served as a critical part of our leadership team and played a pivotal role in Wayfair's growth, helping us grow from a $250 million business when he joined to $12 billion in net revenue today,” said Wayfair CEO Niraj Shah, in a statement. “He oversaw countless milestones, from helping to launch the Wayfair brand as we brought together hundreds of sites into a single platform, to launching new categories, business lines, and geographies while overseeing our North American and European businesses, to leading our debut into physical retail.”
Blotner previously oversaw exclusive and specialty retail brands, as well as digital media at Wayfair. Before joining the company, he served as president of Gemvara.com prior to its 2016 acquisition by Berkshire Hathaway.
Lovesac announces CFO transition
Furniture retailer Lovesac said Donna Dellomo will retire as EVP and CFO, and move to an advisory role, effective June 30. Dellomo was with Lovesac for six years.
Keith Siegner was appointed as the next EVP and CFO. He brings experience as CFO of esports company Vindex, as well as executive roles at Yum! Brands, UBS Securities and Credit Suisse.
Additionally, Jack Krause will retire from the role of chief strategy officer, effective June 30. His responsibilities will be divided between CEO Shawn Nelson and president Mary Fox.
“Since joining Lovesac, Jack has played an instrumental role in transforming the Company into a true omni channel retailer by helping expand our physical touchpoints and digital platform as we continue to disrupt the industry,” said Nelson, in a statement.
NRF adds board members
The National Retail Federation announced the addition of five new board members. They include:
- Marguerite Adzick, founder and CEO, Addison Bay
- Harley Finkelstein, president, Shopify
- Ian Kahn, partner, PwC
- Sharon Leite, CEO, Ideal Image
- Carrie Tharp, VP, strategic industries, Google Cloud