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

Now Alibaba is rolling out its latest tool: an AI-powered conversational sourcing engine.

Alibaba owns the world’s two largest online marketplaces by gross merchandise value (GMV), Taobao and Tmall. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by GMV. Tmall ranks No. 2. Both operate in China.

How Alibaba’s new AI tool for B2B works

Unlike traditional search engines, which rely heavily on simple ranking and indexing, Alibaba’s AI sourcing engine will focus on understanding natural language and transforming it into professional sourcing requests.

It can even predict sourcing needs and provide suggestions. Another feature also allows complex queries or full documents as inputs. The system will distinguish and respond to them in natural language, according to Alibaba.

“Traditional search engines evaluate web page importance through interlinking, credibility and ad spend,” said Alibaba.com president Kuo Zhang. “In this AI era, the B2B sourcing engine offers an intuitive and organic way to query, as well as rapidly and accurately match business buyers and business sellers based on their proven track record.”

The sourcing engine’s features

Alibaba’s sourcing engine includes two significant features:

1. Reconstruction of information.
2. A digital assistant.

First, in reconstructing information, Alibaba looked at how ecommerce has traditionally used product listings with titles, descriptions, keywords and pictures. Business buyers often need to compare multiple suppliers. With that in mind, the sourcing engine will reorganize such information to enable direct, custom-made and side-by-side comparisons, Alibaba said.

Next, the digital assistant will leverage 25 years of expertise in digitalizing various trade aspects — products, payments, logistics, customs and currency exchanges. Alibaba believes its AI technology in this context can now mimic the experience of having a sourcing professional at a buyer’s side.

“This technology can level the playing field and significantly reduce costs, enabling small to medium enterprises (SMEs) to become integral players in the global supply chain,” Alibaba said.

Alibaba’s larger push for B2B AI tools

In November, Alibaba International Digital Commerce Group introduced its generative artificial intelligence (AI) toolkit, branded “Aidge,” which has been adopted by approximately 500,000 merchants, with daily API usage reaching 50 million calls.

Features include a virtual try-on tool for apparel and a 24/7 AI customer service capability.

Since last April, Alibaba International has assembled an AI business team of 100 analysts and developers.

In May, the marketplace company surveyed 500 micro-, small and medium-sized enterprise (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 daily.
• 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 assessed.

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Beacon is one of the largest roofing material distributors. It’s partnering with EagleView, which provides aerial imagery, software and analytics. Together, they are going to integrate EagleView’s detailed roof measurements with Beacon’s ecommerce platform.

In its most recent fiscal quarter, which ended March 31, Beacon Roofing Supply posted revenue of $1.9 billion. That’s a 10.4% increase from $1.7 billion in the first quarter of 2023. Net income was $5.6 million, down from $24.8 million during the same period a year prior.

Beacon Roofing partners with EagleView

The new digital tool called Smart Order is meant to provide contractors with faster, more accurate ordering. To do so, it will leverage EagleView’s aerial imagery measurement service. In under one minute, contractors can develop a complete materials list and place a customized order based on roof measurements, Beacon says.

“Beacon’s collaboration with EagleView makes it easy for contractors to quickly and accurately place digital orders, allowing them to run their business more efficiently and profitably,” said Jonathan Bennett, Beacon’s chief commercial officer. “Continued investment in our digital platform increases customer loyalty and enhances profit margin driving, above market growth in line with our Ambition 2025 strategy.”

Ambition 2025 is Beacon’s ambitious multi-year strategy to digitally transform the company. Two years ago, it announced plans to make 25% of residential and commercial sales digital by the end of 2025.

Beacon Roofing operates over 560 branches throughout the U.S. and 7 provinces in Canada. It serves a base of 100,000 customers.

The company offers its own private label brand, Tri-Built, and has a proprietary digital account management suite, Beacon PRO+, which allows customers to manage their businesses online.

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Amazon, which is the top retailer in the Top 1000, started its member-only summer shopping holiday back in 2015, and many retailers over the years have joined the ecommerce bonanza by offering their own sales — with many returning again this year. However, two of Amazon’s largest competitors, Walmart Inc. (No. 2) and Target Corp. (No. 5), both held more subdued sales this year.

The Top 1000 ranks North America’s largest online retailers by their annual web sales.

Prime Day competition from Walmart and Target

Last year, Walmart and Target held big, branded sales during the Prime Day sales week, offering members of its loyalty programs discounts on a wide variety of items.

This year, Walmart held a Walmart+ Week in mid-June, and Target’s Circle Week sale took place the week before Prime Day. Both retailers still offered deals on their homepages on Tuesday, the first of the Prime Day sales event, but neither branded their promotions in ways that overtly compete with Amazon.

Still, 77% of the retailers in the Digital Commerce 360 panel ran promotions on Tuesday. That’s up from 69% in early June and even above the 75% running on last year’s first day of the Prime Day sales event — also a Tuesday. However, retailers offered smaller homepage discounts, down to a minimum of 6% compared to a 10% minimum discount during the control period. The median smallest discount on the homepage also shrank, down to 20% from 25% during the control.

Of those running promotions, more offered percentage-off discounts during the first day of the Prime Day sales event compared to the control period — 85.5% of retailers offering promotions discounted by percentages compared to 72.7% during the control. Free shipping, a hallmark of Amazon’s Prime membership, was also touted a lot on Prime Day, with 15.8% of retailers offering promotions mentioning it as part of a sale compared to just 4.5% the month before.

Prime time promotions

Of retailers running promotions in Digital Commerce 360’s panel, 22.1% offered large site-wide promotions to compete with Amazon. Last year, 29.3% of the same panel offered competing promotions. For example, Target was running a simple “2-day deals” promotion, a slight nod to Amazon’s big sale, but with much less fanfare. Similarly, Walmart pushed its membership program, but deals on its front page were much the same as they were during the control period.

Still, other retailers did aim to take on Amazon. The Gap Inc. (No. 20) returned to its Gap Day promotion, which it didn’t run during last year’s Prime Day event, with a blanket 50% off promotion. Designer Brands (No. 72) used its DSW.com to poke fun at Amazon, noting that it was a “Prime time to become a VIP member” to get a 20% discount.

During the first day of the Prime Day event, the Prime-adjacent sales were the most popular framing, but many more retailers were pushing Father’s Day sales during the control period. This holds steady from last year, when many more retailers published 4th of July deals than competed with Prime Day.

Last year’s control period was after Father’s Day and before the 4th. This year’s was before both.

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HVAC equipment distributor Parts Town launched this week a visual search feature on its mobile app designed to quicken how contractors identify and purchase the exact parts required for a particular unit of HVAC equipment.

Jeff Audette, senior vice president, HVAC, Parts Town

Rather than looking up an HVAC unit’s details and calling them in to a parts center, contractors can now use the new HVAC Data Plate Scanner in the Parts Town app to scan the manufacturer’s data plate attached to the HVAC unit they’re servicing.

The scanner identifies criteria such as the unit’s model and serial numbers, circuit ampacity, and circuit break size. The app’s scanner supports the scanning process by using optical character recognition (OCR) technology.

The app then directs users to a product landing page on PartsTown.com that displays information on the OEM (original equipment manufacturer) parts and service manuals available for the identified unit. Contractors have the option to place an online order through the app or contact a Parts Town rep.

“Technicians are the backbone of our industry,” says Jeff Audette, senior vice president of HVAC at Parts Town. “Our mission at Parts Town is to equip our customers with the tools they need to work efficiently and effectively.”

Parts Town is still beta-testing the data plate scanner to gather customer feedback for making ongoing improvements, Parts Town says. The scanner’s initial launch supports products from the Trane and YORK brands, but Parts Town, which distributes HVAC parts from dozens of companies, says it will expand it to include “a wider range of manufacturers in the near future.”

Paul Hancox, senior vice president, ecommerce, Parts Town

Parts Town Unlimited also distributes parts for food-service equipment parts and residential appliances. The privately held company reported a 25% increase in 2023 revenue to $2.3 billion, crediting continued growth in B2B ecommerce from new features. It has said ecommerce accounts for about 70% of its total sales.

Paul Hancox, Parts Town’s senior vice president of ecommerce, will speak on B2B ecommerce growth strategies at the EnvisionB2B Forum in Chicago on Sept. 12.

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

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For the third quarter ended June 1, MSC reported a decrease in sales of 7.1% to $974.4 million compared with the third quarter of fiscal 2023. Net income was $71.7 million compared with $95.2 million in the prior year.

MSC Industrial ecommerce sales

MSC Industrial didn’t break out ecommerce sales for the most recent quarter. However, in the second quarter, MSC’s ecommerce sales — including sales made through EDI systems, VMI systems, extensible markup language ordering-based systems, vending, hosted systems and other electronic portals — represented 63.2% of net sales.

It’s been a tough year so far for MSC. Struggles can be attributed to two factors, MSC Industrial CEO Erik Gershwind told analysts on an earnings call, according to a transcript from SeekingAlpha.com. First, there were fewer sales from its core group of metal-working customers. Also, the company experienced delays in launching time-critical improvements to its digital commerce platform,

“During our preliminary results release, we described that our biggest disappointment impacting this fiscal year’s results has been re-energizing our core customers due in large part to delays in our website improvements,” he told analysts. “We also experienced some unexpected gross margin pressure in our fiscal third quarter following the full rollout of web price realignment.”

The delayed website enhancements were designed to foster ecommerce with MSC’s core manufacturing customer base. Nevertheless, they resulted in setbacks in marketing efforts and online features for helping those customers find the right products at the right price, the company says.

MSC Industrial website updates

MSC expects to begin realizing more website improvements in its current fiscal fourth quarter. In addition, it expects to complete the projects in the “early stages” of fiscal 2025, which begins this September.

The delay in ecommerce technology upgrades eventually led to an executive departure. MSC’s chief digital officer, John Hill, left the company last month.

Gershwind wants to expedite a return to better sales and profits. To do that, he said he is taking a more direct hand in speeding up ecommerce updates.

“With respect to MSCDirect.com, the recent executive changes have given me a chance to get even closer to our team and to our development efforts,” he told analysts.

MSC expects to have most of all the updates complete by the second quarter of fiscal 2025, the company says.

“We’ve implemented twice-per-week executive reviews; these reviews are bringing more transparency, collaboration, and energy to the program,” he said. “We expect to deliver enhancements to search and product discovery beginning this month. These include improvements to search accuracy and relevance and the introduction of a new presentation of results, which will begin with a narrow slice of our product offering and a rollout on a broader scale in the upcoming quarters.”

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The study came from British security software and hardware company Sophos Ltd. On average, 44% of computers in manufacturing and production are impacted by a ransomware attack, the report found. In total, it looked at 585 companies in 14 countries in the Americas; Europe, Middle East and Africa (EMEA); and Asia Pacific.

How often ransomware attacks hit manufacturing

“99% of manufacturing organizations hit by ransomware were able to identify the root cause of the attack, with malicious emails coming out as the most commonly exploited cause of ransomware attacks in 2024 (29%), followed by exploited vulnerabilities at 27%,” the authors of the Sophos report wrote.

93% of manufacturing organizations hit by ransomware in the past year said the cybercriminals attempted to compromise their backups during the attack, Sophos said.

Of them, just over half (53%) of backup compromise attempts were successful. Both the attempted compromise rate and the compromise success rate in manufacturing and production are lower than the cross-sector average of 94% and 57%, respectively.

Additional ransomware stats

Other findings include:

• Manufacturing organizations that had their backups compromised reported worse outcomes than those whose backups were not breached.
• Ransom demands totaled, on average, double demands for those whose backups were not impacted ($2 million vs. $1 million median initial ransom demand).
• Organizations whose backups were compromised were more likely to pay the ransom to recover encrypted data (70% vs. 49%).
• Median overall recovery costs came in double that of those that did not have backups compromised ($750,000 vs. $375,000).
• Three out of four ransomware attacks on manufacturing organizations (74%) resulted in data encryption. That was the highest encryption rate for the sector in the last five years. This rate is also higher than the 2024 cross-sector average of 70%.
• All manufacturing organizations (99%) that had data encrypted got their data back.
• 60% of ransom demands in manufacturing organizations are for $1 million or more. 15% of demands were for $5 million or more.

The cost of recovery from a cyber-attack is neither cheap nor easy to recover from, according to the Sophos report.

In addition, manufacturing organizations in the findings reported a mean cost of $1.67 million to recover from a ransomware attack compared with $1.08 million in 2023.

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In 2021 IBM filed suit in the U.S. District Court for the District of Delaware. It alleged that ecommerce technology on Rakuten’s shopping website and mobile apps for providing cash-back offers infringed its patents. IBM says it tried to negotiate a license with Rakuten for six years without success, according to Reuters.

In the complaint, IBM says that it partnered with others to launch Prodigy. Prodigy was one of the first ecommerce services before Rakuten was founded in 1997. According to the complaint, Rakuten “took those prior innovations made by IBM and others to create and run its new business.” It also used more of IBM’s innovations as it developed, according to LawStreetMedia.com.

U.S. District judge Gregory Williams said in an oral order that he was “pleased to hear that the parties have reached an agreement to settle this case,” says Reuters.

The lawsuit had been set to go to trial on June 24. Terms of the settlement were not disclosed in detail in the court filing.

In North America, 18 online retailers in the Top 1000 use IBM for order management services. Those 18 retailers generated more than $90.56 billion in web sales in 2022. The Top 1000 is Digital Commerce 360’s database of the region’s largest online retailers, ranked by their annual web sales.

IBM, AI and sustainability

IBM recently released a study of 20,000 consumers across 26 countries showing that more than half would like to use:

• Artificial intelligence (59%)
• Augmented or virtual reality (55%)
• Bots or virtual assistants (55%)

Meanwhile, just 9% of those consumers said they’re satisfied with their in-store shopping experiences. However, that figure is slightly higher at 14% for ecommerce experiences.

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Comparable sales declined 5.7% in the same period. Meanwhile, ecommerce sales had back-to-back quarters of positive growth, according to CEO Steve Lawrence. Academy Sports also announced an exclusive partnership with DoorDash that offers its consumers same-day delivery from its stores.

The retailer has 285 stores in 19 states. It opened two new stores during its fiscal Q1. Looking ahead, Academy Sports plans to open another 12 to 14 stores in the second half of the year.

Lawrence said in a statement that the retailer’s Q1 results reflect its consumers remaining “under pressure in the current economic environment.”

In an earnings call with investors, Lawrence explained that part of Academy Sports’ core strategy is to grow its ecommerce sales to reach 15% penetration over the next five years. To achieve that target, he said the retailer’s goals are “to streamline and elevate the omnichannel shopping experience, offer expanded assortments online, and improve our fulfillment speed.”

Academy Sports + Outdoors ranks No. 144 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s top online retailers by their annual web sales.

Academy Sports + Outdoors ecommerce sales in Q1

In its fiscal Q1, Academy Sports sales totaled $1.36 billion. That’s down from $1.38 billion in the year-ago quarter.

Academy Sports ecommerce sales grew 8% year over year. Additionally, Academy Sports ecommerce sales comprised 9% of total sales in Q1 2024. That compares to 8.2% in the year-ago period. Buy online, pick up in store (BOPIS) and ship-from-store sales represented more than 80% of Academy Sports ecommerce sales.

Lawrence said that “highlights the true omnichannel approach that we’ve taken to growing this business.”

He added that there are three primary sales drivers regarding the retailer’s customers:

1. Newness
2. Value
3. Driving traffic during key periods

Academy Sports also seeks to push its My Academy rewards program by expanding buying power for customers. That includes a welcome offer of 10% off a customer’s next purchase of up to $200. It also includes free shipping on purchases of more than $25. That compares with a $50 minimum for free shipping for non-rewards members. In addition to expanding buying power, Lawrence said those in the program will have faster checkout both online and on its app, as well as “insider access to personalized offers, deals and products, and a birthday reward.”

Academy Sports partnership with DoorDash

As of June 10, consumers can shop from Academy Sports via the DoorDash app. Consumers can order items for same-day delivery from all Academy Sports locations. Those locations are also available on DashPass, DoorDash’s membership program that offers members a $0 delivery fee and reduced service fee on eligible orders.

Chad Fox, executive vice president and chief customer officer, said in a statement that Academy Sports is excited to give its customers “another convenient way to get the products they need quickly.”

“Academy Sports + Outdoors is continually looking for ways to help our customers get to the fun faster, and we believe this partnership with DoorDash will provide them with a new option to get the gear they need,” Fox said in the statement.

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GrubMarket acquired Butter on May 23 for an undisclosed price to serve GrubMarket’s growing appetite for artificial intelligence (AI) applications. The marketplace hopes AI solutions will be able to facilitate faster ecommerce and digital payment processing for small restaurants and neighborhood grocers.

San Francisco-based Butter is a four-year-old company. Its software product suite for food distribution companies includes:

• AI-powered sales tools
• Cloud-based enterprise resource planning
• Integrated online payment solutions

To date, Butter has raised more than $39 million in funding with a business base that includes more than 11,000 buyers. It also processes hundreds of thousands of orders annually, the company says.

Next steps in GrubMarket AI growth

Now, GrubMarket is rolling out its latest AI initiative: AI Orders, an AI-powered, automated order processing for food wholesalers and distributors who receive orders from their customers.

Many food wholesalers and distributors struggle with the manual, inefficient, and time-consuming process of taking customer orders, GrubMarket says.

And these businesses process a high volume of orders that arrive via traditional channels like phone, text message, and email. Each has complex line items expressed in vague and non-standardized language.

“The process of converting these artifacts into orders in the distributor’s enterprise resource planning (ERP) system is invariably error-prone, labor-intensive, and tedious, often leading to costly errors and fulfillment delays, negatively impacting both customer satisfaction and revenue generation potential,” GrubMarket says.

AI Orders addresses these challenges by using AI to convert emails, text messages, and voicemails into integrated digital orders, enhancing operational efficiency and streamlining how food businesses manage their order flow.

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The acquisition of KYKLO for an undisclosed sum from the enterprise resource planning software developer will foster faster application development of new digital technology including artificial intelligence (AI), Epicor says.

Why Epicor is acquiring a PIM developer

“With more and more B2B buyers looking online to transact with suppliers, the past several years has seen rapid expansion of digital strategies across B2B sectors to optimize buyer experience, self-service, and product discovery capabilities,” Epicor says. “PIM contributes to maintaining the consistency and quality of product data, consolidating it into one database to deliver improved customer satisfaction and omnichannel experiences.”

KYKLO’s PIM applications enable users to create, manage and deploy product information. That includes content, price and inventory across multiple channels.

For users, the company’s PIM applications offer a process for catalog and content creation involving search, editing and filtering. In addition, it enables bulk data uploading using an API for real-time content and price updates.

How KYKLO’s PIM applications are used

KYKLO’s PIM applications are deployed in several distributor settings. Those include:

• Electrical distribution and protection
• Pneumatic, hydraulic, fluid and power
• Process instrumentation
• Industrial automation
• Heating, venting, air conditioning (HVAC)
• Industrial and safety supply

KYKLO has created a catalog of more than 2.5 million products for more than 35 distributors. It’s also been endorsed by manufacturers like Schneider Electric, Wago, Festo US and Mitsubishi Electric Automation as their preferred ecommerce partner, according to TechCrunch.com.

The acquisition accelerates Epicor’s use of AI to transform traditional ERP from a system of record to a system of insight and action, Epicor says.

“Our customers need to reach more prospects across more channels, with a relevant, accurate, content-rich digital experience that drives brand loyalty and repeat business,” says Epicor CEO Steve Murphy. “Our acquisition of KYKLO furthers our aim.”

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