AI augmented e-commerce and the digital shopper of tomorrow

November 3, 2022
Mircea Stan has answered the questions of the Polish specialized publication Logistyka Magazine
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Interview with Mircea Stan in Logistyka Magazine
Radu Țoncu
At the end of October, Mircea Stan, CEO & Founder Postis, has been interviewed by Michał Koralewski, Editor-in-Chief of the Polish specialized publication Logistyka Magazine about the development of e-commerce, trends in consumer behavior and the use of artificial intelligence in e-commerce, as seen in Romania and Poland.

You can read the original article in Polish here. And below, find the full interview.

Michał Koralewski: What do you think about the rapid development of e-commerce in the last few years? What are the prospects for further development?

Mircea Stan: Since technology has impacted a lot of areas in our lives, the rapid growth of e-commerce was based on easy and affordable access to technology, and the convenience and easiness of shopping from anywhere, at any time, through online channels.

The last 2 and a half years have accelerated the growth of e-commerce, as people’s needs and buying habits have drastically changed due to external market conditions. For example, due to mobility restrictions in the first year of the pandemic, people began to buy online new product categories traditionally purchased in physical stores, including food, FMCG, pharmaceuticals, or DIY products.

In the second year of the pandemic, customers that discovered the benefits of online shopping stuck with it. The main reasons were the easy access to multiple choices for the products they were looking for, the simple and efficient way in which they could compare options, reviews, and prices, and the convenience with which shopping could be done from the comfort of their houses.

At the same time, the pandemic has exacerbated the challenges that the retail, logistics, and transport industries were already facing when dealing with complex customer needs. Higher demand, more complex product portfolios, and accessibility limitations led to surging pressure on supply chains, logistics, and delivery processes. New ways to engage customers and mass customization became critical for retail survival.

As a consequence of those days, omnichannel or pure digital has become a norm. Adopting an approach that will provide customers with a fully-integrated shopping experience across multiple touchpoints, including brick-and-mortar, online stores, marketplaces, and mobile apps, will be vital for any retailer even more in the future.

MK: What are the trends of consumer behavior in e-commerce today? What do consumers want?

MS: When people shop online, they want a simple, intuitive, fast experience, tailored to their lifestyle. More specifically, they wish for:

  • flexibility and speed - easy access to the products they want, clear product descriptions and tools to facilitate the match-making between needs and features, and the possibility to get the product fast, with as many delivery options as possible to suit their lifestyle;
  • transparency and predictability - no hidden costs, simple and intuitive processes, and most importantly, knowing at all times where their order is and when they will receive it;
  • the right quality for their time and money - they want to have quality service and personalized experiences, from the first click towards the website to parcel delivery at their doorstep;
  • last but not least, they want a solution-oriented attitude from the merchant in any unforeseen situation that may arise.  

With online, borders and territorial reach are no longer factors of influence and lead to increased competition among retailers from anywhere in the world. Hence, shoppers have become aware of their power and the influence they have over their relationship with brands, so the standards they ask for will continue to grow in quality and complexity.

The trends we see in the overall evolution of e-commerce and the relationship between retailers and shoppers may be affected in the short term by economic and geopolitical uncertainties. In 2022, the war in Ukraine, the inflation, rising prices, and the anticipated food and energy crisis made people more cautious about how they spend their money, especially for non-essential categories. But such evolutions are transitory and e-commerce is here to stay, for more and more product categories.

MK: Do online stores meet the above-mentioned customer requirements? If not, what do they need to do to ensure the right level of customer service?

MS: Adopting a customer-centric strategy is mandatory. This means that every business decision should be made by putting the customers’ needs, preferences, and specificities at the top.

This requires effort, but it can be achieved using the right systems, tools, and processes. To do that, online stores and retailers need to upgrade their logistics ecosystems, IT infrastructure, and processes to be able to promote, sell and deliver products with a mass-customized approach.

At the same time, they need to rapidly create new shopping experiences to meet the more sophisticated and demanding customers and to differentiate from the competition, which is also growing with increasing cross-border trade and the proliferation of marketplace platforms.

MK: How could the costs of e-commerce logistics services be reduced?

MS: Adopting technology and automation is the right answer here. By using integrated systems capable of collecting, aggregating, and processing data (about customers, processes, and performance), and also looking at such data with advanced analytics systems, companies can make vital business decisions in real-time, regardless of the volume and complexity of the products they are selling.

The good news is that there is a simple way to do all of these. Working with a specialized partner such as Postis can help. By combining IT, data science, and logistics, Postis has the right knowledge and all the tools to improve the last-mile delivery segment. All processes are simpler and more effective within our open platform, with systems integration, Artificial Intelligence, machine learning, data-driven decisions, and automation.

MK: How is technology optimizing the last-mile delivery processes?

MS: As it happens in many other industries, technology is a huge disruptor in last-mile delivery. By aggregating customer, product, process, and performance data, and by applying Artificial Intelligence to it, technology brings a lot of benefits for companies, such as:

MK: According to global reports, artificial intelligence and logistics process automation can help optimize the costs of the last-mile and increase productivity. Is Polish e-commerce ready to invest in AI?

MS: If we look at the Polish market, we notice a certain specificity. In e-commerce, a large part of the market is consolidated in marketplaces with closed, siloed ecosystems. In the last-mile, locker networks play a central role and make things easy when providing delivery options. In customer experience, there is an apparent focus on standardization which provides cost efficiencies.

There are very well-established ways of working, but getting out of the already-known environment, integrating new sales channels, or building new experiences may prove challenging.

When it comes to logistics and e-commerce market development, Poland benefited from its geography, with a central position between East and West, and a solid logistics eco-system. This allowed the market to open fast and easily to neighboring countries, and play a central role in cross-border trade. We see many Polish companies becoming solid international brands across Western and Eastern European countries alike. Expansion leads to a need for adaptation to local contexts.

With fast-broadband internet connectivity, with smartphones always present in people’s hands, with an EU open market and a “global village” that we see growing every day, retailers need to rethink their business. Logistics and IT infrastructures need to be able to provide international reach, but be ready to adapt to local contexts. Streamlined processes are needed to enable economies of scale, but they need to allow for personalization according to each shopper, product, or customer journey. All these build trust, differentiation, and brand loyalty.

From this point of view, mass customization is no longer a macro-trend, but should be part of retailers’ everyday life. The complexity of their work grows exponentially by combining factors such as territorial expansion, sales channel diversification, product portfolio development, or customer experience personalization. From a certain level of complexity, people and standard processes are no longer able to cope, no matter how many resources are put in place. AI is needed for real-time data analysis, prediction, and decision-making.

Luckily, advanced AI does not necessarily require significant investments, as it is already available as part of open platforms such as Postis, and paid for as a service. Based on solid datasets collected over more than 6 years in multiple market environments and product categories, our MA algorithms are continuously trained and optimized in order to provide process efficiency, best quality, lowest cost, and seamless customer experiences.

There is an opportunity to be ahead of time and lead the change, with no significant costs. If retailers will not rethink their business because they want to benefit from the new international contexts, go out of their markets, and scale, they will have to do it in order to survive, because international competitors will get in and take their customers.

MK: How can we make effective business decisions in times of uncertainty and crisis? Can machine learning help with this?

MS: At Postis, we use machine learning to continuously optimize the processes and decision-making for each individual delivery, based on roughly 100 criteria related to business objective, product, customer, promised experience, territory, added value services, available delivery partners, contractual terms, previous performance, customer feedback and more.

Based on historical data, and with every delivery, things get better in terms of costs, efficiency, transparency, and customer satisfaction.

The built-in dashboards provide a holistic control tower over the entire last-mile ecosystem, no matter how complex it is. While observing the historical trends in terms of order volumes, carrier performance, or customer feedback, the platform provides the means to adapt to new market contexts, be it opportunities or threats.

With a catalog of more than 200 transport and delivery solutions already integrated and available across Europe, retailers can deploy new options and create new customer journeys in an activate-test-scale-or-change approach, fast and in control.

More, as we provide our platform as a service, we take the costs for IT development, systems integration, and maintenance out of retailers’ budgets, and we enable full flexibility and business scalability, be it growth or consolidation.

Simply put, in times of uncertainty, it is better to be agile, stay alert, be prepared for anything, outsource costs, diversify sales channels and go-to-market approaches, and think for the better, but prepare for the worst. To do that, you need to partner with a reliable, business-proven, market-hardened platform. This is why Postis is here.

MK: The Postis platform integrates IT with logistics, retail and transport. How does it all work? What are the advantages of such a solution?

MS: For over 5 years, our mission at Postis has been to simplify transportation and logistics processes for companies in retail, e-commerce, and fulfillment. And to give them control and transparency during delivery and post-delivery.

We have over 200 customers in industries such as retail, e-commerce, logistics, and manufacturing. With Postis, they operate in more than 25 countries, including Romania, Greece, Bulgaria, Cyprus, Hungary, Poland, the Czech Republic, Slovakia, Germany, and France.

Looking at what Postis does, our platform connects all the retailers’ sales channels (online shop, marketplace, physical stores etc.), at a system level, with all of the transport solutions they use. Through process automation, data aggregation, and machine-learning algorithms, the end buyer will benefit from the best delivery option for each product type, destination, or preference, as previously mentioned.

Using Postis, retailers have immediate access to any transport and delivery solution from the Postis Carrier Catalogue, without any integration costs. Performance, cost, and information about the customer experience are aggregated in one platform, regardless of the number of couriers, transporters, or deliverers which the retailer works with.

Additionally, the Postis Platform provides advanced tools to improve the customer experience before, during, and after delivery, including shopping cart widgets, track&trace mobile apps, real-time status notifications, and post-delivery feedback & satisfaction forms.

If we are looking at the way it translates into the company’s business, with the help of machine learning algorithms, companies that use our platform to automate, optimize and manage their deliveries can save between 15-25% of their shipping budget, increase end-user satisfaction by up to 30%, and decrease delivery time by 25%.

MK: You entered the Polish market in March. Why did you choose our country? What are the development plans for Postis branch in Poland?

MS: Poland is the largest economy in the Central and Eastern Europe, a well-established logistics hub, and a thriving e-commerce market, internally and cross-border. Coming from Romania, which is the second largest market in CEE, we have always shared experiences and best practices with Polish partners. And we have seen not only the potential of the market, but also what are the things that local retailers need to do, whether they are already aware of it or not.

As the levels of process complexity will rise in Poland with both internal and cross-border trade, we believe that our systems integrations, process automation, data science, and AI techs will enable Polish companies to foster digital transformation and be ready for the next level in last-mile.

This year, we opened our local office in Wroclaw, and since then we continuously expanded our partnerships with local fulfillment, e-commerce, and tech providers, to create synergies for Polish retailers selling locally or outside of the country, as well as for international retailers that come to Poland.

Our technologies have been recognized locally and they have been awarded in the AWS AI Challenge organized by Vestbee last year, and also this year, our platform has been nominated in the Logistics Awards Poland in three categories - “Solutions dedicated to e-commerce”, “Telematics and TMS Solutions”, and “Innovation of the Year”.

In the next 2 years, we aim to become one of the top 5 IT platforms rendering services for e-commerce in Poland, and support Polish retailers to achieve seamless last-mile operations and differentiating customer experiences. Locally and across Europe.

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