Online sales continue to grow worldwide, underlining the need to invest in a digital- and mobile-centric customer experience. To further improve relevance and personalization, eBay has turned over their Best Match algorithm into the hands of data scientists, testing out different ways to optimize the buyer’s experience. Similarly, Macy’s is reallocating resources away from the physical in order to invest in the mobile and digital.
eBay Tests New Approaches to the Search Results, Making Listing Optimization Difficult for Sellers
As part of their structured data initiative, eBay has been using artificial intelligence to identify and predict consumer shopping preferences, in order to improve relevance and drive demand. Last Monday, they explained specific ways how their data scientists are implementing machine learning technology. This mainly involves revamping the marketplace’s Best Match system, an algorithm that influences the order of listings.
eBay is reordering their search results pages, attempting to find the right balance between relevance and great deals, auctions and Buy It Now, as well as individual sellers versus large retailers. eBay is moving beyond simple keyword matching, and instead, are applying “machine learning techniques to item-to-product matching, price prediction and item categorization tasks.”
As eBay tests and alters the Best Match algorithm, it becomes more challenging to optimize listings. eBay could one day prioritize listings with generous return policies over listings with lower prices. More unsettling is the fact that what a seller sees on their search results may be radically different from what potential shopper sees.
These changes to the marketplace’s algorithm may provide a better experience to the customer, but could be a detriment to sellers who have invested in a lot of time optimizing their listings.
Via Ecommerce Bytes
Macy’s Closes 100 Stores and Invests More in Digital and Mobile
As consumers migrate away from malls, legacy retailers like Macy’s are starting to understand the need to close the gap between the physical and the digital. In order to connect with today’s consumers and adapt to changing shopping habits, Macy’s announced that they would close 100 stores within the next year, which accounts for 15% of their store base.
"We recognize that these locations do not yield an adequate return on investment and often do not represent a customer shopping experience that reflects our aspirations for the Macy's brand," said Macy's president Jeff Gennette. "We decided to close a larger number of stores proactively so we can invest in a winning customer experience in our most productive and highest-potential locations, as well as invest in growth sooner and more aggressively in digital and mobile."
Despite their overall revenue declining, Macy’s announced that their online sales have grown at a double-digit rate, and they plan to invest in their sites and apps, as well as a stronger omnichannel strategy. But in an age where ecommerce is largely driven by marketplaces, will Macy’s online strategy be enough to save their business?
Global eCommerce Sales Will Hit 1.91 Trillion This Year, with Sales Topping $4 Trillion by 2020.
eCommerce is consistently trending upwards and outpacing physical stores, not just in the U.S., but globally as well. According to eMarketer, retail ecommerce sales will account for 8.7% of all retail spending worldwide, with total retail sales reaching $22.05 trillion in 2016, up by 6% from the previous year.
Retail ecommerce sales include products and services ordered via the Internet over any device, but exclude travel, restaurant and event ticket sales. eMarketer estimates that overall retail spending will be subdued, but the digital portion of sales will expand rapidly, with a 23.7% growth rate forecast for 2016.
With old, legacy retailers reporting declining sales, now is the time to be an online seller. Online marketplaces such as Amazon and eBay, as well as niche, community-driven marketplaces offer many opportunities for smaller retailers with lower budgets to compete against larger ones.