Future-Proofing E-Commerce: Omni-Channel, Personalization

In today's digital era, customers engage with brands across various physical and digital platforms, but expect consistent and streamlined experiences across all channels. To achieve this, retailers are implementing solutions that leverage customer and retail data to enhance conversion rates. Armed with market insights and consumer behavior data, retailers can optimize pricing strategies, product assortment, and promotional activities.

The integration of several platforms, known as an omnichannel strategy, has become vital in influencing purchasing choices, according to the Mexican Online Sales Association (AMVO). This strategy benefits from advanced data analysis, which enables retailers to better understand consumer behavior, optimize inventory, and improve operational efficiency. This not only translates into greater profitability but also fosters a more satisfying shopping experience for customers. 

But before discussing omnichannel, it is crucial to fully understand the potential customer, says Edgar Embriz, CEO, Swatch. “The challenge lies in understanding each customer, because omnichannel works only when the customer is understood. Technology is a means to an end, and it should adapt to the customer's needs at each touchpoint with different brands,” says Embriz. 

Technology allows retailers to analyze consumer behavior data to optimize pricing strategies, product assortment, conversion rates, and promotional activities. Additionally, precise demand prediction, using both past and present data, facilitates effective inventory control, minimizing both excess inventory and stockouts, according to Turing.

Another challenge lies in a consumer that is becoming increasingly demanding, says Fabricio Moreno, Country Manager, Adyen. These customers not only demand more features but also a simple, streamlined experience across all of them, which can pose problems to companies of all sizes. “Our survey showed that 56% of customers claim to be more loyal to a brand that allows online purchases with easy returns. However, despite seeming easy, integrating back-office systems with separate systems and different stocks poses a significant challenge for the industry. It is essential to check if systems are connected, if suppliers are the same, and if there is the same stock to reduce friction and enhance the experience,” says Moreno.

Technology can be a solution for these problems. A Microsoft and IDC report found that in late 2023, over 70% of US businesses leveraged AI, with 92% of AI implementations completed in less than a year. Companies witnessed returns on their AI investments within 14 months, found the study. On average, for every US$1 invested in AI, businesses are experiencing a return of US$3.5.

Ensuring that customer and business information is protected at all times is another challenge, especially as the use of technology becomes prevalent. “The challenge across industries is consolidating information, data, and platforms into one place to integrate digital and physical channels end-to-end for complete visibility. However, in terms of technology, cybersecurity, including biometrics, poses another significant challenge as integration is necessary to enhance security and the user experience,” says Omar Pérez, Regional Sales Director Mexico and North Latam, Splunk.

Biometric data, as a means to verify customer identity, is gaining traction in the retail industry, promising to streamline transactions, bolster resilience, and mitigate fraud. This technology also has the potential to differentiate stores and enhance revenue, as customers are drawn to novel shopping experiences. 

“Improving technology experience relies on understanding the customer. Incorporating biometrics is applicable as customers seek speed and security. Customer trust in the brand depends on their needs. The tool implemented depends on the customer type. From the company's perspective, fraud prevention and data management are vital and relevant to technology departments,” says Embriz.

In June 2023, fraud pressure and attempts against merchants surged by 68% compared to April of the same year, making a 106% increase compared to May 2022, reports the Mexican Online Sales Association (AMVO).

Digital fraud prevention engines play a crucial role. Without a physical card present, identifying the buyer becomes challenging, contributing to Mexico's high fraud rates. Tools like fraud prevention engines, powered by AI, validate transactions and determine whether to proceed, explains Rolando López, Director E-commerce and Omnichannel, Grupo Oprimax (Office Max & Party City). 

“Platforms using AI offer a better shopping experience in digital channels. In physical security, biometrics and blacklists are essential. Even with prevention systems, there is always a risk of theft. However, with fraud prevention systems and biometrics, stores can deter it. Video analytics and biometrics, with the agreement of customers, can be used to improve shopping experiences and generate campaigns for both physical and digital channels,” says López.

Despite the increasing volumes of data collected by retailers, including workforce metrics and customer and sales analytics, only 36% of companies feel confident in their capacity to safeguard customer information from cyberattacks, according to Own Data. This discrepancy persists even as the number of companies implementing data strategies grows exponentially. 

“Changes in payment methods have completely transformed experiences, making payment processes transparent and frictionless. However, reducing information and clicks for smoother processes compromises anti-fraud measures due to less customer data. There must be a balance, and biometrics play a role. In Mexico, where 55% of people have experienced fraud, preventing it is crucial to ensuring a good experience and reducing fraud for both companies and users,” says Moreno.

Another challenge is dismantling data silos and integrating processes within the business. “A unified data platform is the key to unlocking deeper insights, as it gives retailers the ability to drive more meaningful experiences for customers. Retailers can open the door to next-generation retail data solutions and more actionable insights with a unified data estate,” according to Microsoft. 

One of the biggest challenges is seamlessly integrating physical and digital commerce to ensure seamless integration across all systems, all while ensuring that the data is safe at all times, says López. “The key to omnichannel is building trust that data is appropriately used and safeguarded,” says López. 

López highlights another challenge within data lies in analyzing the vast amount of information to understand customer history accurately for precise personalization. Customers seek exclusivity and demand a personalized shopping experience, achievable only through technological tools and data scientists correlating information for marketing or commercial purposes.

“Understanding the user is key,” says Embriz. With data from various sources, it is possible to identify customer profiles, crucial for maintaining loyalty and understanding the customer better over time. Based on this data, creating ad hoc profiles to make digital campaigns, offer benefits, and enhance experiences becomes possible.