Recently, Facebook announced an expansion of its Marketplace feature that offers a way for retailers to broaden their reach. The Craigslist-style community shopping page will now show product listings from businesses too. Facebook will target results to individual users, giving retailers another avenue to customers.
According to targeted e-commerce platform Dynamic Yield, Facebook’s move is just one example of the wider trends in retail technology. Stores are being forced to follow the trend towards tech-driven commerce, built around shopping hubs such as Facebook and Amazon.
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When people head straight to these platforms, it’s no longer enough for a retailer to have its own store. As every retailer competes for attention on these new social experiences, they’re having to employ stronger targeting to meet new customers.
Dynamic Yield’s Vice President of Global Marketing, Mukund Ramachandran, said retailers are having to meet the “dynamic needs” of their users while finding their own ways to stay ahead of the curve. They’re turning to modern technologies to drive this, including the AI-powered targeting systems offered by firms like Dynamic Yield.
Digital Journal caught up with Ramachandran to learn more about the shift.
Digital Journal: Why is Facebook’s announcement significant for retail? Haven’t we already seen this kind of centralisation of retail, through the existence of services like Amazon and eBay?
Mukund Ramachandran: Facebook has more than two billion active users and each user spends approximately 20 minutes a session. This is the kind of reach and engagement that’s unheard of in the online world, or for that matter, any other offline media vehicle anywhere.
With this kind of market penetration, Facebook is attempting to further monetize their user engagement with a robust buy-sell marketplace. As to what it means for brands, that story is still being written.
Today, the marketplace is dominated by individual sellers and buyers but when Facebook opens up the marketplace to brands, it will be a whole other ball game. Today, we have so many retailers who look at Amazon as competition; but some have decided to partner with Amazon and sell their products via their sites.
Could a similar situation unfold with Facebook? I absolutely think so. But again, it’s too early to say what direction the marketplace is headed.
DJ: What are brands doing to meet new customers? Is technological innovation just about sustainability, or are businesses also trying to expand their audience?
MR: Brands are realizing that it is no longer possible to just increase media budgets and attract more eyeballs. There are two key trends underlying this.
Advertising marketplaces like those offered by Facebook and Google are becoming perfect marketplaces. It is extremely hard to identify pockets of demand (or new customers) that their competitors are also not after. This, in turn, increases the cost per acquisition for all players. This is great news for people like Google & Facebook – but not so much for the retailers.
So, marketers are increasingly using personalization as a way to capture the attention of the users they reach. Personalized ads, personalized landing pages, and perfectly timed, relevant trigger emails are just some of the techniques that marketers are adopting.
Furthermore, we are seeing an explosion in the number of marketers who are investing in technologies that allow them to delight users once they arrive on site by providing unique experiences and offers to repeat customers to inspire loyalty.
DJ: Your platform offers AI-powered segmentation of e-commerce audiences. This allows users to be individually targeted based on their specific behaviour. How might a brand use this to push forward their digital transformation strategy?
MR: AI and machine learning are the next frontiers in marketing – it sounds like a cliché but it is indeed true. It is impossible for a marketer to segment say, their one million unique users who visit their site, and create manual segments and merchandising rules that can cater to each of them individually.
Here’s a tangible example: Dynamic Yield can determine in real-time if a user is coming from a social media campaign that promotes blue jeans that are currently on sale; and it can change the entire site experience specific to this user.
So, the images that they see on the home page, the products they are recommended, the kind of nudges and messages that they serve all recognize the fact that this user is looking for discount blue jeans. Without AI-powered segmentation, it is simply not possible to do this.
DJ: How are brands reacting to your technology? What other solutions are they combining it with to deliver maximum results and boost their sales?
MR: We’ve seen an interesting shift in the market, companies are now asking specifically for personalization solutions that cuts across all channels and all engagement mechanisms. The days of looking for an AB Testing Vendor, or a Product Recommendations Vendor, or an Email Personalization Vendor are clearly numbered, which was quite a rare request in the marketplace just a couple of years ago.
Our solution is built from the ground-up to cover all channels and all engagement mechanisms like Search, Recommendations, Personalization, Behavioral Messaging and Triggering, to give marketers the unified solution they are seeking. As a unified platform, we allow marketers to replace several point solutions with one platform. Outside of logistical and cost advantages, the key value here is that data from all customer touchpoints live in one platform, allowing our algorithms to incorporate information from all user interactions on site.
In terms of other solutions that are being combined with our solution, CRM-based targeting & personalization is a clear trend. Marketers are realizing that their first-party information about buyers and subscribers has lived completely disconnected from their site experience and they are actively onboarding that data into platforms like ours to take advantage of all the information that they know about their users.
DJ: How important is targeting to modern e-commerce? Is this something that’s still emerging, or are brands evolving targeting with their new digital strategies?
MR: Targeting has always been essential to e-commerce. Traditionally, the targeting has been restricted to broad customer segments – say, M 25-34 or W 18-24. Today, a trend we are seeing is the emergence of micro-segmentation – the ability to break down your audience into even smaller segments with unique characteristics and needs.
We see this trend significantly accelerating and more and more marketers are going to look at their customers through this prism. For example, leading Russian retailer Lamoda has created over 160 unique audience segments, and uses Dynamic Yield to tailor experiences that are unique to each of these segments.
DJ: Finally, what other changes do you see coming to online retail? What direction are we pushing towards?
MR: Delivering individualized online experiences is becoming table stakes for retail. And both legacy retailers and e-commerce startups are scrambling to meet this core consumer demand.
While there has been a lot of attention around augmented reality and other flashy technologies in retail, ultimately less eye-catching initiatives like breaking down data silos to create cohesive experiences for customers across platforms will be the key focus of savvy executives.
