Klaus Staubitzer, chief procurement officer and head of supply chain, Siemens AG

“Recent events, like the Covid-19 pandemic and focus on sustainability, have given us the opportunity to establish procurement and supply chain as a key value function instead of a simple support function,” Klaus Staubitzer, the chief procurement officer and head of supply chain at technology and engineering giant Siemens AG, says in a new report on procurement industry trends from Economist Impact and business software company SAP SE.

But the report notes that living up to that “key value” provider role isn’t easy and requires more coordination among procurement and other business departments as companies deal with ongoing supply chain threats, such as the armed conflicts in sea lanes that arose after the pandemic.

The report, “Across the procurement-verse: changing trends in the procurement function,” is based on a first-quarter 2024 global survey of 2,307 senior executives across various business operations, including supply chains, financial management and human resources as well as procurement.

The report asserts that while most executives recognize that procurement departments have made notable strides in collaboration with other departments, “procurement teams have considerable room to improve collaboration skills.”

“While 75% of executives agree that procurement collaborates effectively with the business on issues of strategic importance (up from 53% last year), only a fraction of these (18%) have high confidence in procurement doing so, and only 14% have high confidence in the application of procurement insights across the organization,” the report says. “Procurement has yet to gain the full trust of stakeholders in this area.”

The report, citing crucial trends in AI and supply chain diversification, also asserts:

• Procurement’s success in digitalization increasingly rests on its ability to adopt and master emerging technologies.

“Accelerating digitalization is the highest procurement priority for the majority of respondent organizations over the next 12-18 months, and AI adoption is a centerpiece of these efforts, cited by 44% as a top technology priority,” the report says. “The respondents make clear AI should play a key role in improving procurement process automation.”

• Procurement teams are seeking a balance between centralized and decentralized operating models.

Asked about procurement operating model changes in the next 12-18 months, survey respondents said their intentions were roughly evenly split between two directions: “One is increasing the role of centers of excellence (CoEs), which support best practices in strategic sourcing, knowledge management, performance tracking and other areas. The other is adopting a center-led model, in which the central procurement team makes decisions in key areas while leaving business units to decide on unit-specific procurement matters. CoEs complement and support a center-led approach.”

• Businesses look to reduce supply chain risk in the long term by prioritizing supplier diversification — a priority cited by 40% of surveyed executives.

“In the shorter term, meanwhile, companies are putting stronger emphasis on supply-base consolidation (26% in 2024 v. 10% in 2023) given the push to build trusted relationships to overcome supply-chain challenges,” the report says.

Procurement and supply chain teams are also using new technology applications to improve how they ensure getting the right products for their organizations.

Pushing procurement’s more valuable role

For example, the report notes that Siemens uses “a digital twin (a digital model of a real-world product, object or process) to analyze, with precision, the material cost of the parts it purchases and how they are produced.”

The report adds that Staubitzer’s  team at Siemens now also uses the tool to determine the CO2 emissions of those parts as well as the carbon footprint of the supplier’s entire operations. The survey uncovered a similar trend, noting that 46% of CPOs “prioritize carbon footprint mitigation, more than any of their counterparts.”

“Our suppliers are sometimes surprised that we have a better breakdown of these details than they have from their own calculations,” Staubitzer says.

Roman Belotserkovskiy, a partner in the Austin, Texas, office of the global management consulting firm McKinsey & Co., says the inflation trends in recent years have provided an opportunity for procurement teams to demonstrate their value and increase their prominence.

“CPOs who did well are those who went and found new sources of supply or who focused on protecting revenues or margin, rather than focusing exclusively on cost,” he says in the report.

Belotserkovskiy has also observed an increase in the number of CPOs presenting to their board of directors — another sign of increased prominence.

“That was very rare two or three years ago,” he says.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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A Houthi spokesperson stated in December that they would target “ships affiliated to Israel or transporting commodities to Israeli ports” and continue to do so if “food and medicine keep not accessing the Gaza Strip.”

The online freight-booking and payments platform said it facilitated a 32% year-over-year increase in the number of transactions to 316,500, exceeding management’s Q2 expectations.

Freightos transaction volume in Q2

Freightos said in a statement that it had expected transaction volume to grow between 27% and 29% to a range of 303,000 and 309,000 transactions. It also said the Q2 growth rate of 32% outpaced its long-term targeted growth rate range of 20-30%.

“This significant transaction growth highlights the growing adoption of digital solutions in the freight industry,” Freightos said.

Freightos added that steady freight prices resulted in corresponding increases in its Q2 gross booking value. It also exceeded expectations by growing 31% to $203.4 million. Freightos had expected Q2 booking value would rise only 15%-18% to a range of $178 million to $182 million.

Freightos lets importers and exporters compare freight shipping rates, book shipments and pay for services through Freightos.com. It also provides software for air and ocean carriers and freight forwarders for managing quoting, pricing, bookings and other operations.

An expanding base of buyers and carriers

Despite its prior slower-growth expectations, Freightos prepared in Q2 for more long-term growth by expanding its air and ocean carrier network by 38% to 51 from 37 carriers. In addition, its number of unique “buyer users” in Q2 increased 16% to approximately 19,000.

Freightos notes that its buyer organizations range from small and midsized businesses to large multinational organizations. Its number of buyer users includes all the individuals placing bookings on its platform. A spokesman adds that Freightos has an average of more than 5,000 bookings per workday.

“This growth underscores the ongoing marketplace network effects, where buyers attract sellers and sellers attract buyers,” Freightos said.

Handling spot freight market growth

Freightos also attributed its growth to its ability to serve the spot freight market, or freight shipments handled outside of long-term contracts.

“This momentum represents the continued digitalization of the spot freight market, estimated to comprise 30%-50% of the total air and ocean freight market,” the marketplace company said.

As part of its carrier network expansion, Freightos in June announced agreements with Thai Airlines and Coyne Airways, carriers on Freightos.com that will use the WebCargo by Freightos digital booking and payment platform to manage freight services across areas including Asia, Africa, and the Persian Gulf and Caspian regions.

Barcelona, Spain-based Freightos said it will host a conference call to discuss its Q2 financial results and Q3 outlook on Aug. 19.

Here’s last quarter’s update on Freightos.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Matt Levitt

In the realm of marketing, B2B and B2C strategies often appear worlds apart; after all, you don’t market a software product the same way you market jewelry.

As someone focused on B2B marketing, with experience working with consumer brands, I’ve discovered that B2B marketers stand to gain more insights from their consumer counterparts than they might initially realize. Ultimately, whether it’s enterprise software or everyday products, those making the purchasing decision are still consumers. Companies are increasingly demonstrating that you don’t need to delve into technical intricacies to effectively engage with business audiences.

Here are four helpful principles B2B marketers can learn from B2C:

1 – Market to People, Not Just Businesses

There is a lot to learn from consumer brands that excel at communicating effectively with their audience. Often, marketing assets are not about the product itself but rather the emotion or benefits it can provide.

B2B marketers can take note — not everything has to be down to business. Take HubSpot, for instance. Initially targeting smaller businesses uninterested in or unable to handle the complexities of more advanced alternatives, HubSpot didn’t push the merits of marketing automation and CRM. Instead, they consistently provided valuable content addressing various business and marketing subjects, addressing the real needs of their audience.

This technique mirrors the strategy of makeup brands offering tutorials on platforms like YouTube, Instagram, or TikTok. Viewers seek education, and through this process, they discover and trust brands that offer solutions to their problems.

2 – Lose the Lingo

Business services and technology offerings can be a challenge to communicate, especially concisely. It requires skillful wording and sometimes an outsider’s perspective to strip away industry jargon and deliver a clear message. Even among knowledgeable audiences, content overloaded with unexplained acronyms or industry terms risk alienating rather than engaging.

3 – Expand Beyond Traditional B2B Channels

LinkedIn and Google aren’t the only way to reach your audience. If you ensure the right targeting, any channel can be a B2B channel including Instagram, TikTok and press. Since not every B2B company is leveraging these channels, it also offers an opportunity to stand out from the crowd.

If your website already has strong traffic, you can even use these advertising channels only to retarget people that have already been to your site and found you through more traditional B2B channels. A good example of a B2B company using traditionally consumer marketing channels is collaborative work management software firm Monday.com.

On Meta, Monday.com uses a strong mix of content that looks native to Facebook and Instagram, like UGC-style video, in conjunction with more typical B2B ads showcasing the product’s UI and various infographics. Monday.com understands that their audience spends time on Meta and is adjusting their strategy to meet them where they already are.

4 – Don’t Put Your Website on the Backburner

Your website’s impact is substantial; neglecting issues such as slow site speed can hinder users from discovering your offerings effectively. Invest in a website that will impress, regardless of whether your traffic rivals that of direct-to-consumer brands.

By embracing these principles gleaned from consumer marketing, B2B marketers can elevate their strategies and forge deeper connections with their audience. This will ultimately drive success in an increasingly competitive landscape.

About the author:

Matt Levitt is director of strategy at 829 Studios, a B2B and B2C marketing agency.

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Piyush Chaudhari, CEO, Salsify

A veteran executive involved in helping brands connect with customers, Piyush Chaudhari joined product experience management company Salsify last month as CEO, succeeding co-founder Jason Purcell as the top executive. Chaudhari joins Salsify as the company invests millions to roll out new technology products, including AI and automation, designed to improve how companies manage and syndicate branded product descriptions and images to attract online customers and boost conversion rates.

In this July 2 interview with Digital Commerce 360, he shares his views from Salsify’s corner office on the future course of product experience management and how brands can win the digital shelf.

Interview with Piyush Chaudhari

Digital Commerce 360: What excites you most about joining Salsify now as CEO? Please comment on one or more of the experiences in your career that will help you bring unique value to Salsify and its customers, including B2B as well as retail companies.

Piyush Chaudhari: I’m two weeks in at Salsify as we speak, and I have spent it talking to Salsify employees (or Salsifarians, as we call them) and Salsify customers in both the U.S. and Europe. These conversations have confirmed what I hoped for coming in — that my colleagues, our customers, and digital commerce are hungry to take advantage of significant growth opportunities on the digital shelf over the next few years. My past experiences at places like Aon Hewitt and IRI, driving continuous improvement in the quality of the products and services, will serve as a great foundation for expanding the business value our customers realize from their Salsify partnership.

DC360: What do you see as Salsify’s most significant strengths, and how do you plan to build on them? Are there particular technology applications and/or services you want to introduce or explore to expand Salisfy’s product suite?

Chaudhari: Our market position starts with our people, and their passion for helping our customers win on the digital shelf. Our customers’ ambitions drive everything we do. There’s a reason that Salsify was named a “Leader” in the most recent Forrester Wave in our space. Since our founding, we have focused on delivering a platform that will enable our customers to optimize the product content on every digital shelf touchpoint.

Salsify lets our customers centralize their product data and be sure it meets the data requirements of every retailer. We then connect that data everywhere it needs to go across an open network that’s continually expanding. Finally, we make sure they can do all this at scale, with automation and AI to drive all this with maximum efficiency.

We have all this in one unified platform — and over the next few years, we are going to continue to innovate by expanding our network and embedding AI throughout the product experience management (PXM) lifecycle to realize the goal of optimizing every touchpoint, everywhere.

DC360: How well do you think most companies (including existing Salsify clients and prospects) recognize and act on the importance of deploying comprehensive technology systems for effective product data management technology? What can help bring more companies further into effective product data management strategies, including through extended sales and distribution networks?

Chaudhari: There is no question that the period of COVID — when the digital shelf was the only shelf — brought product experience management (PXM) front and center into executive suites for retailers and manufacturers across all categories. They had to invest not only in the right technology, but also reshape the ways in which their cross-functional processes and teams designed, marketed, and sold their products to consumers and B2B buyers.

We have been fortunate enough to be their partners and advisors in the first decade of Salsify, and have witnessed companies like Mars and L’Oreal and many others go from implementing PXM in one team or region to executing global digital shelf excellence in every market. At the same time, retailers like Amazon, Kroger, Wayfair and Intermarché make it seamless for their suppliers to quickly understand and meet their product content requirements through automated APIs rather than outdated spreadsheets.

We are excited to work with B2B distributors like Affiliated Distributors (AD) and Grainger and their suppliers to extend digital shelf best practices into the industrial space. B2B buyers have the same expectations as consumers and want to self-serve their buying experience as much as possible. We believe this industry will transform in half the time of companies adopting PXM in the first decade, given the paths that have already been tread and the impact of AI.

DC360: What are companies (including both merchants and brand suppliers) missing regarding effective technology and strategies for effectively competing for sales and brand recognition through the digital shelf? What are some of the newest and most effective strategies merchants and brands should deploy?

Chaudhari: We believe that the single most important driver of growth that will emerge over the next several years is AI-propelled personalization at scale. We have seen the improvements in conversion in areas such as email marketing when brands are able to apply deep knowledge of the consumer through permission-based first-party data to demographic, behavioral, and other predictive data insights to drive higher click-throughs and conversion.

Imagine the growth potential when a merchant is able to apply similar intelligence at scale to personalize a product detail page (PDP) for each visitor instantaneously.

Achieving this future will require deep data collaboration between retailers and their suppliers to make sure there is the product data necessary to support merchandising that supports the correct persona, occasion, and use case. Retailers must invest in the technology and data infrastructure to power these experiences through collaboration with their suppliers, and suppliers must be testing and learning their way with generative AI and the automated processes to be able to support personalized merchandising at scale through their retailers.

DC360: Are brands and merchants today collaborating more effectively than in the past to build customer loyalty and grow sales and profits? How do you see Salsify helping them along these lines?

Chaudhari: Quality product content is the foundational fuel of two things that modern retailers care very much about.

One, accurate, complete product content powers both search discovery and conversion on the product page. 78% of online shoppers cite product images and descriptions as “extremely” or “very” important to their buying decision.

Two, in recent research from the Digital Shelf Institute and Stratably, 71% of digital leaders from 78 global consumer brands said Product Detail Page (PDP) quality significantly influences their return on ad spend (ROAS). In a time where many retailers hope to boost their balance sheet by monetizing their audience with brands, ad buyers are refusing to increase investments until product data quality is best in class.

In response, leading retailers have invested heavily in the processes and API connections that enable suppliers to meet constantly shifting data requirements in a more automated and reliable fashion. For retailers such as Walmart and Kroger, we are seeing a trend toward OmniConnectors, APIs that are purpose-built to support data ingestion for both digital shelf and brick-and-mortar. Salsify is democratizing these 2-way, automated connections between suppliers and retailers through innovations like our Open Catalog. Continually optimized quality product content will be a minimum requirement for entry into the future world of a personalized digital shelf at scale.

DC360: How will AI and other emerging technologies help companies better engage customers with digital content that is personalized to their needs and will boost conversions and sales? How do you see AI and other emerging technologies adding to Salsify’s product offerings?

Chaudhari: Salsify is a no-hype AI zone. By that I mean that we really try to clearly differentiate between what may become possible in the future, and what is available now for our customers to use on their test, learn, and scale journey. So today, you’ll see from us AI-propelled capabilities like our Grocery Accelerator, which uses AI to rapidly validate grocery suppliers’ against regulatory, industry, and retailer-specific requirements, and proactively surfaces content recommendations to speed accurate and compliant product content to market.

Our customer Uma Home Decor introduces one to four thousand new products a year. Content creation for that many products was a serious impediment to getting to market. With AI connected to Salsify, they were able to reduce their production of content from six months to six weeks!

In the future, you will see AI deployed across the entire PXM lifecycle — data modeling, content creation, data quality validation, automated mapping to each retailer’s requirements, and the ultimate goal of PXM, continuous optimization of every digital touchpoint.

The Salsify App Store will be a busy place over the next several years, where best-in-class AI providers will be able to easily hook their latest capabilities into Salsify and customers can implement the ones that deliver the value they need in the PXM lifecycle. Exciting times ahead!

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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The company, which reported $536.9 million in 2023 revenue, up 19% from 2022, has 120,000 customers across 85 countries. Companies using the SPS retail network include W.W. Grainger Inc., The Home Depot Inc. and Target Corp.

Jason Popillion, director of technology, SPS Commerce Inc.

“SPS sits in the middle of the transactions that happen in retail — including basic transactions like purchase orders, ship notices, invoices — all those things that are key to allowing commerce to happen,” says Jason Popillion, director of technology, adding, “We also have things like inventory files in ancillary documents that show what inventory is available on hand at any moment.”

“What we’re able to do with all that data — which is really super interesting about AI — is dissect it and get analysis done in ways that we haven’t been able to do before.”

He adds: “Transactional data tell many stories about the life and cycle of our economy, customer sentiment and buying habits … what products seem to be stronger in times of the year, or how you might look for things in the coming future.”

Popillion says SPS defined its data structure to make it more understandable by AI. “We create a schema that says, ‘this is the data that we’re going to be working with; these are all the pieces that we have available.’”

As a result, “AI did a very, very, very good job of understanding the data” and produced useful machine learning evaluations related to supply chain operations, he adds.

For the last several years, SPS Commerce has been experimenting with AI. “Early tests have primarily focused on internal projects with the goal of increasing efficiency of the work we do in service of our customers along with validating effectiveness of potential market-facing solutions,” Popillion says. “In every test we run our goal is the same — find ways to help our customers run the most efficient supply chain possible.”

So far, the company says it has found AI produces levels of efficiency, including speed and accuracy, ten times higher than non-AI methods for such efforts as making demand forecasts.

For example, SPS used AI to predict order volumes for a future time period based on past order volumes over an extended time period.

“If you’re trying to think about how to plan for the upcoming holiday season, what we’re doing is looking at the last two years and see what the data is showing us, to give you an idea of what you can expect in this upcoming season,” Popillion says.

Other methods SPS is using with AI include:

• Faster onboarding of supplier product data. Using an in-house developed AI chat client tool, SPS is enabling its internal supply chain professionals to help expedite commerce for retailers by more quickly and accurately compiling retailers’ requirements for onboarding merchants’ new suppliers into the SPS retail network. “When you’re trying to get connectivity to your supplier base that’s feeding your commerce engine, the sooner you can get them on board, the sooner you can acknowledge the revenues from those suppliers,” Popillion says.

• Customer personas. To help retailers tailor marketing communications, SPS uses AI to customize marketing language to the needs of managers in particular roles in companies, such as director of sales, or who have communication preferences based on their U.S. location, such as the East Coast or in the South or West.

Popillion, who is a Certified Information Systems Security Professional, says SPS has addressed security concerns many people have regarding AI by working with established AI technology providers Microsoft Corp. and Amazon Web Services and by setting data management standards.

“It’s all about data,” he says. “It’s about training individuals so they know how to use it effectively, and it’s about creating the right access policies to allow only [authorized] people to have access to it.”

He adds that he’s noticed a shift in thinking among companies concerning AI. As with the early days of the internet, when companies realized they could use the web to grow their businesses and make them more efficient, organizations realize AI offers practical ways to improve business operations — for example, possibly generating a demand forecast in minutes instead of hours.

For now, SPS is using its AI technology internally to provide value-added services to customers as it continues to develop it, Popillion says. But he adds that SPS also expects to introduce as early as later this year AI applications that its customers will directly access and use.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Whereas Q4 revenue decreased about 2% from the same period a year earlier, Nike full-year revenue reached a new high in its fiscal 2024.

In an earnings call with investors, chief financial officer Matthew Friend attributed the decline in Nike Digital sales to “softer traffic, higher promotions and lower sales of certain classic footwear franchises.”

Although Nike Digital has grown at about a 26% compound annual growth rate (CAGR) since the retailer’s fiscal 2019, Friend said, the company missed its targets in its fiscal Q4. Nike Digital sales “underperformed” in April and May, continuing into June, he noted. This comes as Nike continues “to drive retail sales growth at a high full-price realization,” Friend added.

Friend had said in Q3’s earnings call that Nike’s target has been “to achieve the 40% digital metric.” So far, Nike has not disclosed how far along it is toward hitting that share of sales through digital channels.

In the earnings call, president and CEO John Donahoe said Nike is “taking our challenges head on and we’re regaining our edge.”

Nike ranks No. 8 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by online sales. It’s also the highest-ranking Apparel/Accessories retailer in the Top 1000.

Total Nike revenue in fiscal 2024

For its full 2024 fiscal year, Nike revenue totaled $51.4 billion. That’s up 1% year over year from $51.2 billion. The full-year revenue growth comes despite a 2% year-over-year dip in Q4 Nike revenue, to $12.6 billion.

With the exception of the first COVID-19 pandemic year, 2020, Nike has grown its annual revenue in each year since 2011.

Total Nike revenue fell to about $12.61 billion in its Q4, which ended May 31, 2024. That’s down from about $12.83 billion in the year-ago period. This marks the fourth year-over-year drop in Nike revenue in a quarter since Q1 of the retailer’s fiscal 2019.

It’s the third such drop to happen in the retailer’s Q4 in that time frame — the first of which was at the onset of the COVID-19 pandemic in 2020. Moreover, Q4 2021 rebounded to outperform the same period in the two prior years.

The only non-Q4 drop in the past five years was Q1 FY21, though the drop was moderate (less than $100 million) compared to the Q4 FY20 drop of about $4 billion. That was the second quarter to have been affected by the pandemic.

Before Q4 this year, the last year-over-year drop in Nike revenue was in Q4 of its fiscal 2022.

Revenue from Nike’s namesake brand accounted for $12.1 billion of the company’s $12.6 billion total revenue across brands, which include the Jordan brand and Converse.

Nike Digital sales drop again in Q4

Nike Digital, encompassing global sales through the retailer’s website and mobile app, decreased 10% in Q4. That follows a 4% year-over-year decline in Q3 Nike Digital sales.

Similarly, Nike Direct revenue fell 8% year over year, to $5.1 billion. Nike Direct refers to the retailer’s direct-to-consumer sales, both in physical stores and online. On the opposite end, Nike wholesale revenue increased 5% year over year, to $7.1 billion, in Q4.

In North America, Nike Digital sales decreased 11% in Q4. Meanwhile, Nike store sales decreased 5% while wholesale grew 6% in the region.

In Europe, the Middle East and Africa (EMEA), Nike Digital sales declined 14% in Q4. Nike Digital sales also declined in Asia-Pacific and Latin America (APLA), down 12% while wholesale grew 9%. However, Nike Digital sales in greater China grew 8% in the quarter; wholesale grew 15% while in-store sales dropped 6%.

Nike outlook for fiscal 2025

Nike expects Q1 fiscal 2025 revenue to decline about 10%, Friend said. That includes lower Nike Digital growth, “especially in the first half of the year due to lower traffic on fewer launches.”

“This reflects more aggressive actions in managing our classic footwear franchises, continuing challenges on Nike Digital, muted wholesale order books with newness not yet at scale, a softer outlook in greater China, and a number of quarter-specific timing factors,” he said.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Nike report.

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About 30,000 businesses on the marketplace use Alibaba’s AI tools to increase product exposure in targeted markets, a practice sellers on the marketplace say helps them grow even with limited internal staffs.

“Using AI has helped put my Alibaba.com store on autopilot and saved us a lot of time since it’s just me and one employee managing our business,” Sieu To, deputy managing director of Vietnam-based electric fan company Hanh Sanh Co., Ltd., says in an Alibaba press release issued today.

Alibaba.com is a unit of Alibaba International Commerce Group and serves more than 48 million buyers and more than 200,000 suppliers on its ecommerce platform worldwide.

Kuo Zhang, president, Alibaba.com

At an event to mark the United Nations-sponsored MSME Day today in Geneva, Kuo Zhang, president of Alibaba.com, participated in a panel discussion presented by the U.N. International Trade Center on the inclusion of small and midsized business in global trade. “As we promote wider adoption of our AI tools amongst MSMEs, we also hope to expand our global supplier base … we are building a global supply chain by and for MSMEs, leveraging AI,” he said.

Last month, the marketplace company surveyed 500 MSME companies that do business on Alibaba.com and range in size from one to 250 employees.

Among the survey’s findings:

• 25% to 35% of respondents use AI on a daily basis.
• Using AI tools led to an average 37% increase in product exposure to promote growth in commerce.
• Companies using AI tools accepted 70% of product optimization suggestions.

The survey also found that companies from developing countries accounted for much of the use of the marketplace’s AI tools. “Among the top 20 countries making the most frequent use of Alibaba.com’s AI tools, approximately 50% are from developing countries,” Alibaba says.

Earlier this year, Alibaba.com launched the latest AI-powered version of its Smart Assistant global sourcing tool. Alibaba describes the tool as an “intuitive personal guide to sourcing that helps small business owners discover new opportunities, stay up-to-date on trends, seamlessly track orders and more in a single, efficient touchpoint.”

Alibaba adds that businesses on Alibaba.com can diversify their product sources in markets known for specific product categories.

For example:

• In Northeast Asia, buyers can connect with natural ingredient skin care suppliers out of Korea and partner with home furniture and camera, photo and accessory manufacturers in Japan.
• In Southeast Asia, Vietnam is a supplier hub for seasoning and condiments, and home and outdoor furniture. Buyers can also seek out expert suppliers in India and Pakistan for loose gemstones and horse racing gear.
• In West Asia and Europe, carpets, men’s clothing and construction and building machinery suppliers can be found in Turkey. Buyers are able to tap into suppliers in Germany for industrial machinery and suppliers of wine, textile machinery and women’s apparel from Italy.

“Alibaba.com has helped me expand my business beyond Europe into markets like China, Vietnam, Bangladesh and Ghana,” says Maria Francesca Aceti, CEO of nutritional supplements supplier Deltha Pharma.

On its website, Deltha says it is looking for distributors throughout the world.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Without constant learning and adoption, existing biases can prevent product managers from identifying the most persistent and intense challenges for clearly defined user personas that other products in the market have not addressed. As a result, many product managers build for the “average user” since this approach increases the total addressable opportunity during early assessment. This approach results in products that lack differentiation and scalability that create a durable competitive advantage over a period of time and are easily replaceable.

In today’s market, the most successful company leaders and product managers understand that product development starts with a deep understanding of previously unarticulated customer needs captured by closely observing customers in their workflow. An essential product competency is familiarity with new technologies like generative AI when approaching customer discovery, including at the earliest stages when diving deep into targeted user personas and identifying potential opportunities to address specific pain points.

The value of using extensive amounts of data from various user settings during discovery becomes magnified when the same datasets funnel into the development of personalized solutions. One powerful example of AI revolutionizing product development is the last-mile delivery systems companies develop and utilize for organizations’ delivery fleets, which they even sell as delivery-as-a-service white-label solutions. Fueled by massive growth in online shopping, the last-mile delivery market is expected to grow to more than $200 billion by 2027.

Using AI to make last-mile delivery more efficient

Not long ago, using generic routing algorithms and mapping technology and identifying the fastest, most efficient delivery routes with a simple “traveling salesperson problem” was considered sufficient in delivery systems.

Now, machine learning, advanced optimization techniques, and AI have enabled product managers to go deeper into each part of the driver’s delivery journey and create last-mile delivery products using the most optimal routing constructs for dynamic factors that influence driver’s on-road decisions, like the predictability of parking in dense metro areas, weather conditions, a customer promise to deliver within certain hours, street-crossing safety, and more. These enriched, real-world datasets combined with the ability to “productionize” them to optimize each delivery or pickup make last-mile deliveries more reliable, efficient, and much safer.

For instance, with today’s routing algorithms and advanced optimization techniques, it is possible to determine whether it is more efficient for each driver to park in a central location and walk to multiple delivery addresses or drive to each address. With historical datasets and generative AI, drivers can also access specific information about where they are making deliveries, including access codes, business hours, customer notes, and even photos of buildings.

With AI and other advanced technologies incorporated into delivery workflows, drivers can receive details on connected devices from past successful deliveries, along with important information such as guidance on the presence of lockers and directions for alternative delivery locations, which could be spread across multiple floors. Because of these advancements, uncertainty and inefficiency are replaced by streamlined operations that ensure packages are received optimally based on up-to-the-minute delivery conditions.

Drivers will consider various delivery applications and unit economics when delivering in various marketplaces. If all factors are equal, they are more likely to choose the companies that make delivering packages as convenient and reliable as possible. McKinsey & Co. reports that AI-based delivery solutions can save companies up to 15% in logistics costs, 35% in inventory levels, and 65% in service expenses. In one recent example, OYAK Cement used an AI-based solution to lower fuel and other delivery costs by $39 million annually.

Generic solutions for average users are no longer enough

The same degree of product specificity occurring in the delivery market is also happening in other areas of product management. As AI advances rapidly, the key to success for product managers today is “going deeper,” or using advanced technology to identify actionable insights from detailed datasets about users in their workflow.

Product managers leverage that information to create expansive lists of pain points organized by themes, test and validate hypotheses, and analyze results from surveys and focus groups to ultimately work backward from the user when envisioning product prototypes that achieve a higher level of differentiation.

Effective product managers understand that the most critical skill they bring to software development teams is acting as the user’s voice in the room. In this role, they prioritize product ideas likely to make the most significant difference to the user journey and ensure the development team designs features and solutions using the most advanced technologies that resonate deeply with consumers.

One example of this is a recent agreement between Mars, which creates a variety of food and pet care products, and PIPA LLC, a company that accelerates nutrition science and innovation by embedding AI in R&D, manufacturing, and commercial businesses. The partnership allows Mars to utilize PIPA’s advanced AI technology to design new products that meet the health benefits demanded by customers. The technology taps into clinical trial data, biomedical databases, scientific publications, and additional sources to identify market trends. The partnership and AI technology access have already led Mars to create a state-of-the-art diagnostic tool that predicts cat kidney disease.

The most effective product managers leverage AI, ML, and deep learning techniques to build specific customer personas and craft innovative solutions that meet their needs. On the other hand, product managers who stubbornly continue to focus on the average customer will likely see suboptimal user growth and retention by delivering products that fail to stand out and satisfy specific user needs.

Designing for the average customer is a mistake in most industries because increased competition has divided demand among many players and made differentiation necessary for product-driven growth. AI and other advanced technologies complement existing techniques that product managers can leverage to ultimately become faster and more effective in their jobs.

With the tools now widely available, differentiation has become more important than ever for product managers. In a recent Fictiv survey, 97% of senior decision-makers said AI will impact their organization’s future product development and manufacturing processes. In that same survey, 78% of respondents said they are currently evaluating technology tools to develop new products more efficiently.

AI is quickly changing the way product managers work

Advanced technologies are transforming the entire product development process. AI empowers product managers to make better, more informed decisions and design highly personalized products for users. There is almost no limit to how granular product managers can understand user needs as they strive to improve and grow their products.

In last-mile delivery, for example, product managers use enhanced map datasets driven by ML models to optimize delivery based on traffic lights, predicted street traffic, and parking availability instead of just determining the shortest map route for deliveries — a capability that is easily available in consumer map products. These capabilities are why 83% of CEOs say AI and advanced technology are critical to the success of their companies.

Paul Daugherty, chief technology and innovation officer at global information technology consulting firm Accenture, recently said, “The playing field is poised to become a lot more competitive, and businesses that don’t deploy AI and data to help them innovate in everything they do will be at a disadvantage.”

About the author:

Hrishikesh Paranjape is a senior product manager with experience across ecommerce, real estate, customer service and financial industries.

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Joshua Silverman

Many retailers have historically fashioned their product data ingestion processes into “walled gardens,” narrowly architected systems that required their suppliers to pay for access to portals to submit product information.

These walled gardens make the collection of data extremely challenging. Brands would have to go through one system to submit GDSN (Global Data Synchronization Network) data, another for ecommerce setup, and another just for submitting images. This web of single-purpose systems created manual work for brands that delayed product launches, led to error-prone data that resulted in fees, and ultimately worsened the quality of product detail pages and jeopardized the shopper experience.

While some retailers still have these traditional processes in place today, many more have begun to rethink how to offer their suppliers a better experience. This new trend has been driven by several factors:

1. Recognition that high-quality product information drives conversion. The  latest consumer research reports found that 78% of consumers will abandon a product purchase when the product information is incomplete. Additionally, the 2023 Forrester Wave^TM for Product Information Management states: “The macro trend shaping product information’s criticality is that consumers find online shopping more convenient than offline shopping in stores…Product information quality [is] the North Star to drive conversions. Bad content on product pages is a barrier to sales.
2. The rising importance of retail media as a revenue source. According to new research from Stratably and the Digital Shelf Institute, brands reinvest, on average, 7.2% of their digital sales into retail media spend with their retailer partners — and that figure is steadily climbing. But 67% of brand leaders say that content quality is a meaningful part of this investment equation, meaning that brand leaders will reconsider additional investments until the data on the product detail pages their ads connect to are best-in-class. Inaccurate or incomplete product data means lower return on ad spend (ROAS) for the brands. For any retailer looking to derive revenue and margin from their first-party data, the quality of the product detail page (PDP) is critical.
3. The introduction of AI is giving retailers the ability to scale content quality checks in a way that simply wasn’t possible before. Part of the walled-garden approach was an attempt to force data consistency through a narrow submission channel. AI allows for data checks at scale, without the need for a limiting submission mechanism.

A key way retailers have begun to tangibly invest in better collaboration with their suppliers is through “omniconnectors,” new application programming interfaces (APIs) that are purpose-built to support data ingestion for all content for both the digital shelf and brick and mortar.

These omniconnectors create a single, streamlined process for brands to submit information and reflect the omnichannel shopping habits of today’s consumer (eg., through BOPIS, an industry that is forecast to grow at a double-digit. compound annual growth rate of 19.3% until 2027, globally). The technology of APIs, as opposed to submission portals, also offers the ability for AI-propelled quality checks and two-way feedback between the retailer and their suppliers, driving collaboration at scale.

Leading retailers are investing in this technology now. Walmart recently launched its new Omnispec API, a new product information submission process for suppliers that combines all of the data requirements for both online and brick-and-mortar item setup. Other retailers like Kroger and Albertsons have also “opened up” their existing walled gardens, allowing their suppliers choice when it comes to which syndication provider they prefer to use when they submit their product information. This means that brands no longer need to pay multiple providers to get content to the same retailer. The Home Depot is another retailer now rethinking how it can create more agile ways for its thousands of suppliers to submit product content updates.

Over the next couple of years, it will become possible for any retailer to efficiently offer similar capabilities at a reasonable cost, transforming the industry.

What should brands and retailers do now to prepare for an open, collaborative, omnichannel, future?

Retailer Executives:

1. Think strategically about where supplier collaboration sits in your roadmap of priorities, given its impact on consumer experience, retail media ROAS, and PDP conversion rates.
2. Complete an analysis of all the various disparate methods across teams for product ingestion from suppliers today and how they might be streamlined.
3. Start conversations with leading suppliers and their chosen product data management and syndication technology providers to begin designing a roadmap towards your own omniconnector capabilities.

Supplier Executives:

1. Consider how and where your product content is stored and managed today. Are you still using spreadsheets, or do you have a product experience management solution in place? How ready are you to scale processes to automate delivery of your content to all endpoints?
2. Think about which teams will need access to product content and whether it’s easy for them to access. How will you power your product enterprise and break down silos, allowing your legal, support, ecommerce and retailer media teams to access the same set of optimized, complete and accurate product content?
3. Talk to your retailers about any pain points you experience in the content submission process today and the consequences (e.g., delayed product launches or stale information on PDPs). Your influence could help to get improvements on the roadmap.

A focus on open and easy collaboration between retailers and their brands drives efficiency and revenue, impacting both top- and bottom-line growth by creating product experiences that drive conversion.

About the author

Josh Silverman, is senior vice president of retail and distribution at Salsify Inc., a provider of product information management and related technology applications.

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Dale Edman

I’m sure many of us have seen Simon Sinek’s Ted Talk “Start with the Why.”

In the talk, he introduces the golden circle, which consists of what, how, and why.  Sinek suggested that every company knows what they do; some can even articulate how they do it, but few get to Why they do it.

Companies looking to replace their ecommerce system often know what they are doing: replacing their ecommerce system. Some even get to the how, deciding on technologies and partners. But from my experience, few understand why they are replacing their platform. The re-platforming project will be complicated and expensive, and you will need a ‘Why’ to align everyone in the company.

Here are some of the whys that I have heard over the years:

• Legacy systems that are no longer supported.
• Security concerns.
• Increasing total cost of ownership.
• Looking for modern functionality.
• Board/CEO/CIO/CMO — want something new and shiny.

There are other reasons why, so make sure you understand yours. Often, it will have multiple layers. For example, who doesn’t want modern functionality? However, you need to ask yourself what you think you are getting.

Is it enough for the investment? Technical debt and legacy systems can force your hand, but your Why must be bigger than “we have to do it” to get you through the difficulty of the project.

One last word of caution: while having your C-suite on board might be enough, wanting something new or shiny is not enough to sustain your project over the long run.  Your Why is likely to be multi-faceted, and the better you can get to the bottom of it and get transparent with all stakeholders, the more you will set yourself up for success.

Setting Requirements

To accomplish your Why, you must decide on what you are building and establish requirements.  Requirements are an iterative process, starting with high-level requirements often defined by your Why.

For example, I have been a part of many projects that required analytics. “Enable Google Analytics” would be recorded as a project requirement. That is a high-level requirement from the Why, but you will need to define what types of data you need, what you want your dashboards to look like, and whether you have internal resources to build them. There are a couple of other watch-outs when defining requirements; over- and under-engineering.

Once you start to understand your requirements, it is important to consider prioritization. One question that an architect on one of my projects used to ask was, “If this was the only thing not ready, would you still go live?” You will eventually have to make those decisions, so understanding what is necessary versus nice will make the project smoother.

Over-Engineering

As you define your requirements, you may over-engineer the problem. Industry trends, such as “composable or headless commerce,” can cause additional work and overhead.

I worked on a re-platforming project to implement headless commerce.  We needed a high-level strategic resource to design the system, then an architect for the front-end work, an architect for the commerce work, and two or three developers for both the front- and back-end work. Requiring a headless commerce system added overhead to the project. You may have an excellent Why for using more complicated architecture, but make sure you know what you are gaining and what it will cost you.

Another common reason for over-engineering is to future-proof your platform by ensuring you get every requirement in the first build. Not understanding or prioritizing your requirements can lead to everything being important and nothing being important. It also could prevent you from seeing times when an “out-of-the-box” solution could have been adopted with a few tweaks to the requirements, saving costly customization. Remember, you don’t just build these systems; they must be maintained and expanded to meet your consumers’ needs.

Under-Engineering

Under-engineering can also be problematic; phrases like “Lift and Shift” or “Out of the Box” are often used to simplify requirements. With “lift and shift,” you focus on moving the existing site’s functionality into the new technology platform. It may seem the easiest way to avoid scope creep and constrain the project. But it doesn’t work because not every requirement can be ported over.

Most legacy systems were engineered over a decade ago, and there is a reason you are considering a re-platform. At the same time, you may have built those into your legacy system, but the new system tends to handle them differently. Another common mistake is using the “Out of the Box” functionality. You should select a modern ecommerce platform because they have already figured out many of the challenges you are dealing with.

Technology Platform and Partners

You have your team identified; they are clear about the Why and have started the hard work of defining the requirements. The question is, have you already decided on a technology platform? It is tempting to lean heavily on the IT department to make this decision. They will, after all, be responsible for maintaining it, so shouldn’t they have the final say? Since a re-platforming involves more than IT, it should be more than their decision. Your chosen platform has business, merchant, and marketing implications, so you must ensure everyone is comfortable with the decision.

Some things to consider as you look at different platforms:

1. Are you B2C or B2B? Do you need to support other marketplace channels?
2. How do your requirements line up with the functionality of the platform?
3. Will this platform scale with your growth?
4. Support and community: are there resources to turn to? What does the broader partnership ecosystem look like?
5. Interfaces and integration: will this platform integrate with your back-end systems?
6. What is the total cost of ownership, and what do maintenance, licensing, and support costs look like? How do they increase over time?

One last thought on platform selection: Make sure you talk to customers using the platform. Ask the vendor for references, but also do your homework. Reach out to folks in your network to get a sense of how people use the platform, what challenges they have had, and how they feel about it post-launch. You can’t have too many of these calls; they will help you understand what and how the platform works day to day.

Funding and ROI

You will need to understand the total cost of ownership and the benefits or gains the new system will bring. If your Why is technological debt, and you have been in a maintenance mode, it’s more than likely that your new system will cost more. Your old system doesn’t cost anything and feels like a freebie. Not since the early days of commerce have I seen a new system with double conversion rates, so you will need to get creative about what benefits the business and your customers will derive from the project. Having the team bought into the Why will pay dividends. Hopefully, they will  see the benefits, which could be as simple as freeing up your sales teams to have more time to sell and not take orders.

Once you understand your ROI, you can decide how to structure your project and its costs. I have seen two different ways.

1. Only fund the upfront work, requirements gathering, and UI/UX that informs the cost of the development portion of the project. I prefer this method, but most CFOs/CEOs won’t sign off on a project if they don’t have at least some idea of the total cost.
2. Get a bid for the entire project up front. If you have done enough requirements gathering, you can look to get a bid for everything. Your system integrator should know what they typically charge, although none are typical builds. If you go this route, add 40% internal contingency to your request so that you have room for surprises. The last thing you want to do is have to go back and ask for more money.

The other way to manage costs is to be flexible with your requirements. From my experience, this is hard to manage. Most people feel they will never get the functionality if it doesn’t happen at launch. At one company, there was an internal joke that there “was no 2.0,” meaning that once something launched, it was there for good, and nothing would change or get upgraded.

Conclusion

The decision to re-platform your ecommerce business is always a challenging one.  As technology author Rick Watson once said, “No one ever got fired for not re-platforming, but plenty of people have been fired for botched re-platforms.”

Starting with the Why, getting clear about your requirements, resisting the urge to over-/under-engineer, and selecting the right technology platform are crucial to having a successful re-platform project. Hopefully, this will help you understand the importance of firmly setting the foundation for your project.

About the author:

Dale Edman is an independent adviser on B2B and retail ecommerce and digital transformation. He has held ecommerce executive positions at companies including West Marine, Newell Brands and The Wasserstrom Co. He posted an earlier version of this article on LinkedIn.

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