E-Commerce Reaches Machine Learning, Artificial Intelligence and Data Science – Puls Biznesu

The last two years of the pandemic have been a period of change, but also, paradoxically, of business development. It was noted especially by companies that not only sell to retail, but also to e-commerce.

In cooperation with PSI Polska, our long-standing business partner, we are implementing a solution based on artificial intelligence algorithms. The goal is to significantly increase the efficiency of online order processing – said Jacek Kujawa, Vice Chairman of the Board of LPP.

– In spring 2020, when the lockdown was first announced, our eCommerce department worked beyond measure, while the old sales teams experienced downtime. This prompted us to accelerate the digital transformation, which transformed LPP into a multi-channel organization in six months. At that time, we also launched the “Defrost” project for the first time, that is, we started shipping e-commerce orders from stationery stores. Thus, the old division of the structure of the company between the space dedicated to online sales and the other dealing exclusively with e-commerce has entered into history. Currently, after the period in which online sales recorded the greatest increases, filling the void after the suspension of stationary commerce, e-commerce is taking over the role of a domain supporting traditional commerce – said Jacek Kujawa, vice-president of the board of directors of LPP during the “Intelligent e-commerce” panel organized during the European Economic Congress 2022.

– Our research shows that 40 percent. customers contacted our online offering within seven days of their in-store visit, during which they finalized the purchase of our assortment. This shows how well the two channels complement each other while informing new customer buying habits.

Take on the challenge

LPP operates online in more than 30 markets. Each of them means different behaviors, different regulations, but also different trading preferences. Entering each market required the company, on the one hand, to recognize the needs of customers, and on the other hand, to adapt to legal requirements and local customs. Helping to successfully address such challenges has come from technology.

– LPP works on multiple channels at the same time. In a pandemic, we have learned to react quickly to change. Advanced data collection and analysis systems allow us to learn about customer behavior, as well as to study the conversion of online marketing campaigns into sales results, what type of assortment is attracting the most interest from customers in a given market, what are the preferred payment methods and what are the expectations regarding the delivery process. For a business to grow, it must operate on the basis of deep knowledge of the market and the ability to respond quickly to its needs – stressed Jacek Kujawa.

As he added, the company separated last year from its structures an entity dedicated to the development of technology, in which it currently employs up to 70 specialists in the field of data science, in which LPP sees great potential for development.

– The key today is to know your own customer’s preferences, not to explore knowledge of market averages provided based on a flattened recipient profile, which is the result of data collected from several different markets – explains Jacek Kujawa. This is why a detailed analysis of data on our recipients is so important to us, because only then can we understand their behavior and expectations, and thus adapt to their preferences – he adds.

E-commerce is becoming intelligent thanks to the increasing use of artificial intelligence. Thanks to advanced algorithms, online trading is supported by product recommendations. Data analysis also makes it possible to optimize the management of logistics, that is to say the management of deliveries, for example, to adapt them to the corrections in progress, particularly in terms of returns.

– In the past two years, we have dynamically developed logistics. 1.6K physical stores have taken over the function of warehouses that support remote order fulfillment. We have opened six fulfillment centers in Europe and are building three more. The nature of CF is changing, until recently it was mainly operated manually, and now it is quite intensively automated – explained Jacek Kujawa.

– Technology is there to help the customer. That’s why today it is personalized, uses rich datasets and has the ability to recommend – agreed Szymon Bujalski, e-commerce director at Modivo.

– E-commerce and retail must complement each other and work together. In periods of economic decline, we have developed our offline sales networks. There are 22 humanoid robots in our showrooms – he pointed out.

Organic development

When developing e-commerce, care should also be taken to ensure that these activities are not carried out in contravention of applicable legislation. The example of the largest e-commerce organizations in the world is a warning that should be taken seriously.

– The giants of the e-commerce market stumble over things as simple as bringing the regulations into line with the applicable regulations. As a result, it sometimes happens that they conflict with the protection of the fundamental rights of the buyer, for example the right to withdraw from the contract within a specified period. For this reason, they have to deal with regulators in many proceedings against them and pay high fines – warned Marcin Trepka, partner at Baker McKenzie.

Is e-commerce a good method to further increase sales?

– Yes, but you need to skillfully use the opportunities of this channel and focus on finding market needs and trend aggregation, and not on following the trend (follower). You can run the so-called marketplace: on Allegro, Amazon, e-Bay, Shopee and others. About 50% of sales go through the market. sold online. You can open an internal market, invite other traders to it and charge them commissions. Sephora has entered into this type of partnership with Zalando. On the marketplace platform, you can carve out a big slice of the e-commerce pie and, with the help of efficient last-mile logistics, fight winning battles for the customer – encouraged Jakub Gierszyński, Director of Commerce electronics from Sephora for the Polish and Czech markets.

The panelists agreed that e-commerce should develop organically, without falling into bias, that is to say always with a global and multi-channel sales perspective using the best quality information about our customers.

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