Online merchandising: Timing is everything

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Moment marketing and how predictive AI algorithms can help

The digital commerce data we crunch at Apptus show a clear pattern -  in the beginning shops typically expose the product too little, compared with the actual demand.  Later on, in the second phase of manual product merchandising, products are usually overexposed compared to the actual interest of the market, both in terms of duration and in extent.

Fashion retailer - ecommerce data on sales and exposure

Above: data collected for an advertised product from a fashion retailer. X axis holds time units – see them as days or hours. The purple columns stand for sales volumes; the orange ones represent the volume of digital product exposure done with manually set digital campaigns.

Digital merchandising

While in the past campaigns and transactions happened in the physical world with an inherent direct shop-client contact, the current move of the process on the net gives merchandisers whole new control possibilities.

There is a justified belief that an experienced merchandiser has a nose for products in demand, and that she/he can adjust the product exposure on-the-fly. This belief has been passed to the digital, on the assumption that the window shop has only just moved to a screen.

Data processed in Apptus cloud witness however subtleties in product demand that go beyond human capacity for data resolution and analysis. Retailing is swept continuously by microtrends -- the hits-of-very-short-moments. Meanwhile ecommerce enhances speed and possibilities. Products go viral faster in the digital world than in the offline commerce. On the top of this, commerce and campaigns are permanently affected by unpredictable phenomena not directly connected to the specific market, for example a summer music-hit & vip, an abrupt different pattern in weather, a sudden political change or event…

Best seller of the month, or best seller of yesterday – which one to focus on?

To exemplify further let’s look at books retailing. There is a historic rationale behind traditional period-based best seller list (the Top 10 of the year, or of the month):

  • People buy what is popular
  • Showing the best sellers makes people buy more
  • Best seller lists make people buy from the head of the list and not form the long tail.

However, as bookstores went online the game changed.

Best seller approach has changed with digital marketing

People got now easy access to the long tail. Consequently, making people buy more means now:

  • Expose more products
  • Make the list more volatile
  • Last month best seller won’t be the same with yesterday’s best seller.

The last point brings the dilemma: What should you expose more: the consistent seller, which confirmed on a long-time frame (say a month), or the hit of the day?

Moment marketing and how to stay relevant at any given moment

There is an emerging concept of moment marketing which can answer the question of staying all-time relevant. “Moment marketing is the ability to take advantage of an event to deliver relevant and related, seemingly spontaneous, and often fleeting interactions with customers in real time” [1].

To cite Randy Wootton, an apostle of this new field who is soon to publish a book [2] on the topic: “moment marketing requires companies ingest lots of data in near real-time and take action in less than 20 milliseconds. That’s where AI comes in. You need insight engines to mine all this data or you’ll get overwhelmed and drive your customers crazy. AI can help us discern the relevant data and then deliver advertising at the right time, in context[3].

Product exposure in Apptus eSales algorithms

Apptus machine learning algorithm has taken the moment marketing approach to reality. The recommender system we offer goes beyond what is easy (i.e. determining the best seller for an interval), to solve the complex: finding the right balance between long and short term best sellers at any given moment. The algorithm is valid beyond bookstores for any retailing segment, including sectors as fashion, DYI, electronics and furniture.

Find the right balance for digital product exposure between microtrends and long-time frame trends

Listening to data coming in real-time, Apptus algorithms are devised to react and trigger a product exposure that stays to the highest level relevant to the moment, and furthermore to the individual, given the product search history and the behaviour of the visitor on the site.

According to Wootton “we are still in early innings of understanding the possibility of data. […] We are going to see computers make decisions more and more often. Marketers will have to surrender control and trust. Otherwise they’ll stand in the way of progress – and higher conversion. […] The opportunity to stitch online and offline together thru predictive marketing is radical”.

Learn more on Moment Marketing

  1. William Grobel et al., Webinar on Moment Marketing, WARC Toolkit 2016
  2. Randy Wootton, Eric Duerr, Ken Rufo - Moment Marketing: Optimizing Every Step of the Customer Journey, 2019
  3. The Right Ad, Just When you Need It: Talking “Moment Marketing” with Randy Wootton