5 Ways AI Websites Outsell Regular E-Commerce - Modern Distribution Management

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5 Ways AI Websites Outsell Regular E-Commerce

Optimize search results, facilitate up-sells and cross-sells, promote items that need to turn quickly and elevate private-label products all ways distributors can use AI to transform websites from order-taking to order-making assets.
Chat bot , artificial intelligence , robo advisor , robotic conc

There’s a huge difference between having an e-commerce website that passively takes orders and having a smart e-commerce platform that actively generates sales. The past few months have illustrated that difference vividly.

In April, year-over-year e-commerce spending in the U.S. increased by 30%. But not all businesses with e-commerce sites saw those kinds of gains. A few exceptionally designed e-commerce platforms — Wayfair, Shopify, eBay, and Amazon — outperformed the rest.

Amazon is a great example of an active digital channel. When customers shop on Amazon, the website doesn’t just passively take orders, it actively uses AI to promote items the same way reps would make sales pitches. As more customers shop online, this difference is huge. During initial coronavirus disruption, Amazon saw $75 billion in Q1 sales, a permanently steepened growth curve, and predictions that Jeff Bezos will be the world’s first trillionaire by 2026. For distributors with passive websites we’ve seen practically the opposite: According to Jade West of the National Association of Wholesaler-Distributors, some distributors are down 20%, others are down 90%, but everyone is down at some level.

If distributors are going to compete in the new digital-first world, they’ll need to increase e-commerce performance. Luckily, the B2C companies listed above have established clear precedents for how to sell more online with active AI. Below are five proven strategies that distributors can use to transform their e-commerce platforms from order taking sites into order making sites.

1) Optimizing Search Results

One of the most overlooked ways to increase e-commerce revenue is to enhance search functionality. You want to make sure that when customers search for products, they’re truly being shown the most relevant results. This may sound like a simple and obvious goal, but it’s surprisingly hard to pull off.

Search engines must crawl, index and rank products in order to return results. Top engines even use AI natural language processing tools to work around human spelling error and diction, and specially designed search relevancy optimization tools to show customers the products they are most likely to buy.

Also see: “A 3-Part Plan to Grow Business During the Coronavirus Crisis.”

Optimizing your search engine to create a path of least resistance is well worth it, however, as it will facilitate more customer purchases. For Amazon, optimized search brings in roughly $10 billion extra dollars annually (more than 3% of their revenue). Here’s the math. When a customer visits Amazon’s site, they have a 2% chance of making a purchase. But, if they use Amazon’s search engine, that chance leaps up to 12%, a 6X increase. In comparison, websites with less advanced search engines see less than a 3X increase when customers make searches. This suggests that Amazon’s AI-powered search engine generates $10 billion in revenue per year that would otherwise go unrealized. If you’re looking to boost your e-commerce revenue, using AI to optimize search results is a great place to start.

2) Facilitating Up-Sells 

Once you’ve optimized search to help customers find products that they’re likely to buy, you can further increase revenue by nudging customers toward high-margin sales. This concept isn’t new to distributors; expert sales reps have helped customers buy the right products for decades. But, until recently, digital tools have been unable to mimic this process.

With AI, websites can gain a sort of sales intelligence and start executing active upsells. If you use an omnichannel AI vendor to attain this upsell feature, your website can even learn from your sales reps’ behavior to start offering customers upsells that are proven to work. With an AI up-sell feature, your website won’t just make sales. It will make the right sales.

3) Facilitating Cross-Sells

Once a customer has an item in their cart, the next way to increase sales is by encouraging cross-sells. Everyone knows the story of how McDonalds grew into an empire with the billion-dollar cross-selling question, “Would you like fries with that?” But for distributors, cross sells aren’t that easy.

Distributors maintain huge and complicated inventories that make impersonal upsells all but impossible: Fries go well with basically any meal McDonald’s meal. Most products in a distributor’s inventory, however, only fit well for niche customers or situations. What distributors need is a way to make automated cross-sells based on each customer’s unique purchasing profile. That’s where AI comes in.

AI can automatically create personalized product pitches for every customer and encourage cross-sells as customers shop. It’s hard to put an exact value on AI-powered up-selling and cross-selling features. But, one way to think about the value that these tools add to a website is to think about the difference that a great sales rep can make. If you can see that active sales reps outperform passive reps by making expert products suggestions, up-sells and cross-sells, then these AI features are likely a great fit for you.

4) Promoting Overstocked or Perishable Items

Improving search and encouraging up-sells and cross-sells are good ways of driving profit by increasing revenue. However, in order to truly maximize profits, distributors must also find ways to minimize losses.

Perishable items can be a huge source of lost revenue for distributors. Overstocked items can create further losses by causing inventory problems and supply chain inefficiencies. With AI, however, distributors are now able to mitigate these kinds of unnecessary waste.

Also see: “AI is the First Technology to Create Exponential Value for Distributors.”
AI-equipped distributors can enter lists of products they need to get rid of, or automatically set up programs that prioritize perishable items over durable products and overstocked items over understocked products. That way when a customer shops online, they will naturally be guided toward the items that you are more interested in selling.

5.) Promoting Private Label Items

Distributors with private label items can also seriously consider using AI to increase sales. Selling private label items is particularly challenging because rules-based approaches tend not to work. Always recommending private label items may drive a short-term bump in revenue, but this approach can hurt business in the long run by upsetting customers and suppliers. When sales reps are talking to customers, they can ask questions and make judgement calls about when to recommend private label products. However, old-school websites have no such ability and treat all customers the same way.

Fortunately, we are now beginning to see a new era of smart websites that can analyze customer behavior and purchasing patterns to inform data-driven action. By bringing an AI backing to your website, you can choose to promote private label items when applicable. With these tools, you can feel comfortable knowing that you are always pursuing the course of action that is most likely to end in a sale.

AI-enhanced websites are a win-win. They make the customer shopping experience more personal and enjoyable, and make the distributor selling experience more accurate and profitable. As e-commerce becomes ever more important, distributors can embrace these five ways of creating an active digital selling experience.

\"BenjBenj Cohen founded Proton.ai to help distributors harness cutting-edge artificial intelligence. He learned about distribution firsthand at Benco Dental, a business started by his great grandfather. Later, while studying Applied Math and Data Science at Harvard University, Cohen saw an opportunity to bring his two worlds together. He’s on a mission to supply distributors with the innovative technology they need to thrive in modern markets.

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