The Automation Revolution - eCommerce

Interview Transcript

Article | The Automation Revolution – eCommerce
1st October 2021 Atheneum Team

Expert Profile


Current VP of eCommerce




Gustavo has 20+ years of executive experience across multiple industries. Most recently he leads the development & execution of Invicta’s, luxury watch & accessory maker, digital expansion. He was formerly the CMO of Anda, a $1.7bn division of Teva Pharmaceuticals. He has combined his knowledge from Invicta, Teva Pharma & AMEX to create innovative eCommerce solutions to drive revenue & conversion rates.

Section 1: Current Automation Strategy

1.1. What is your current automation strategy? What are the intended goals?

The automation strategy brings AI-based messaging and conversation to create a continuous connection throughout the customer life cycle. The goal is to increase revenue, conversion rate, customer satisfaction, and in doing so also reduce operational costs. This is the overarching theme across all of our automation initiatives.

With automation, you can improve conversion rate. You can deliver the right content at the right time in the right channel to each individual customer. The old ways of one size fits all, does not apply anymore, you need to deliver the right message. It relates to content and messaging, but also with experiences: end to end experiences throughout the buying funnel.

To get to that level of scale you will need an enormous amount of headcount. Automation allows you to reach that scale without incurring a massive growth in operational expenses.

1.1.1. How has automation improved performance in the luxury space?

Invicta sells affordable luxury as a fashion accessories company. We have watches at different price points, sunglasses and other accessories like bracelets.

We are an international top brand for affordable luxury fashion accessories. In our space, the automation allows for digital advertisement to increase without having to increase the cost of digital ads.

It also elevates the customer journey, there are different ways of achieving this across many different initiatives across different categories we have going on and have planned, but overall, it allows for a much better experience. It’s a natural language, connecting people through experiences instead of forcing online sales service.

1.2. What are the challenges to implementing automation in your industry?
1.2.1. Start Up Capital Investment

If you want to develop your system to scale up and bring in automation to achieve this then costs increase significantly. You have a new system; you need to hire people with the expertise to connect and set everything up and that is a big expense. The ROI is not immediate. So, companies face this challenge.

That’s why so many companies are procrastinating on their automation initiatives because they cannot reap the benefits right away.

1.2.2. Scalability

There is a bottle neck in the skills necessary for automation. Today, it is not scalable. When you want to automate journeys through different communications for marketing and servicing across channels, you need different types of resources. Potentially, you have consulting companies to give you a hand, you need a lot of testing and you need someone to manage that. And those individuals to manage the automation moving forward, although you may not need more people than before, you will need chances that are resources that are of a higher salary.

1.3. What are the different types of automation you have invested in?

Automation cuts across our entire business operations. We have automation for our security and fraud prevention. Especially within marketing: communications, offers, content. We have a project for automation and pricing; in distribution with cross pallet shipping; site performance, there are amazing new technologies to monitor what’s going on with your website. There are some others things we have for Google Ads, which is the most common form of automation, where the engine relocates funds based on the performance of each individual keyword, each individual campaign. And then the last two we are investing in; one is related to the entire customer service operations; the other one has to do with the checkout experience on the website.

1.3.1. Automation Chat Bots

Until recently, chat was a hundred percent human and just a few weeks ago, we launched something that is powered by a bot with predictive Q&A. The next phase of this project is AI, full AI and we expect to further improve customer satisfaction and have instantaneous results for the answers, the right answer in the channel of choice for our customer and therefore better customer retention.

A market leader for chat bots is Crisp. Crisp is a very popular tool nowadays, but there are honestly, there are different ones. And there are different ones at different price points, each one of course claims to be the best one.

But it’s very important that when someone looks at different potential vendors in this space, that you look at how wide the client portfolio is, for how long have you been in the market? The challenge is that many companies in this space, they want to lock you into a year contract promising amazing results. So that is very challenging because you don’t want to be locked in because if it doesn’t work, you want to switch vendors.

1.3.2. Do you choose to develop in-house solutions or use on-the-shelf solutions?

It really depends on the needs of the business whether it’s better to have something done in-house. Sometimes we take two different vendors and combine the benefits to get the best out of the two service solutions.

I would say 80% of our automation budget is on third party solutions, 10% is in-house, and 10% is a combination.

The budgetary spend on the third parties is higher and it’s going to continue to increase. And this goes back to the significant upfront investment. The budget for automation doubled from 2019 to 2020, and I expect that by the end of this year is going to increase by another 50% more. And the year after maybe another 50%.

1.3.3. Have the technologies met your ROI?

The short answer is yes, absolutely. That’s why we keep betting on the same strategy and why it’s so widespread across the company, across different functions, but we can see ROI in different ways. We can see it with improvement in conversion rate, increase revenue, reduction in cart abandonment. We see that with an increasing customer satisfaction and increase in service levels for the call center, because more people are self-servicing with the right tools via chat. So, where we have less call volume, therefore with the same resources in the call center, we can achieve better performance.

1.4. How has the pandemic changed your approach to automation?

You have companies like Delta for example, the top airline, where the call time suddenly went from 20-30 minutes to up to 2 hours. In our case, it was something somewhat similar with all stores closed because of the pandemic, everyone who was buying only in stores, or mostly in stores shifted to e-commerce. So, we had all our stores in the U.S. including Puerto Rico closed.

The online sales of course increased, but without the need for customer service. And we couldn’t ramp up so quickly, our head counting customer service because of all the significant training is required. So, with the pandemic, we basically needed to shift our funding dollars from stores to online and truly accelerate the speed to completion for many projects that were in the pipeline that were not urgent, they became urgent overnight.

Section 2: Future Automation Strategy

2.1. What are your current unmet needs/pain-points?

To go from the idea, from ideation of what you wanted to automate, to running it in a way that matches your initial business requirements is a challenge. People are underestimating what it takes to have something automated and running as you conceived it in the early stages.

There are some parts of automation we brought into realization that were going to take a couple of weeks to be fully set up and because of conflicting priorities, lack of knowledge within the organization, the training needed so the process ended up taking 3-4x longer to get the program to go live.

That impacted the return on investment and ultimately became a huge distraction. The biggest challenge is that automation today still is complex and most often you need third party to go and configure everything and it’s costly. In the future, that’s going to change.

2.2. What are your upcoming priorities in automation in the next 3-5 years? Why?

The automation we are bringing in is to remove manual repetitive work and automate it and achieve scale, in the next 3 to 5 years. I want to use automation to purely drive growth because of our automated base. What growth can we achieve from automation?

The other thing is to have the end to end content personalization completely done across your channel of choice. Regardless of the channel you want to interact with us, the information is really at your level, it’s completely personalized to you and it’s in real time.

The level of automation we have today depends on the function. When you look at something like Google Ads, it’s highly automated, it’s optimized by people, but the operation is automated.

Marketing communications, the first one I would say is in ads, maybe 90% is automated. As it relates to email, the automation there is, from marketing communications I would say it’s maybe 10%, for three-year communications it’s maybe 75%.

Another is one-step checkout. Currently payments force someone to enter information when everything can be automated with just a couple of things, your email, phone number. We already have a few forms of payment automated however in the very near future, we’re going to have it across all forms of payment. Everything is going to be automated.

The one area that will benefit the most, I would say is customer service. Customer service is going to benefit a lot because when you think of a virtual queue, instead of waiting they call you back. And when you have a chat that is responsive, when you have an IVR that basically answers all the questions without you having to wait for a person, there is so much automation that can be brought in. When you have this level of automation across languages, you can quickly scale to have your call center open 24 hours, and you can do it in all languages. Invicta ships worldwide, but our call center is in two languages only, or we offer service in two languages and it’s reduced hours. So that’s what you truly can scale up.

2.3. What are the key emerging technologies that appeal to you in the future? How would you rank them in terms of ROI?
2.3.1. Customer Analytics for Customer Pathway on website – Highest ROI

There’s one way that already exists, where they monitor the customer experience online, and based on the experience they have, they define different opportunities and they monitor the customer behavior of those who go through that individual, a unique path in their buying journey in different places on the site and what is it in conversion rate.

Based on that and define what needs, what’s the friction in the experience online, they prioritize different tickets that if you work on, they say how much you can increase in revenue. I would say 99% of companies, they use company tools like Hotjar, Fullstory, they look at videos or they wait for the customer to report an issue. And you really don’t know how much that issue has cost the company and whether it should be prioritized or what are the issues.

And now it’s all AI. And then the machine says, these are the 10 things you need to work on. This is a revenue opportunity of each one. And then the business working with IT would start working on them, prioritizing them based on the revenue opportunity for the business.

The future of customer analytics is an omnichannel customer analytics insights with recommendations. So Google Analytics is very basic, there is nothing today that is an omni-channel where you can see the level of engagement of people across chat on the site, servicing, how many times they call, their experience in stores, how much they buy, whether they buy the same products in store or online. Based on what the system recommends, you can decide what you should be doing, how you should be segmenting your customer base. This is something that is going to be here in the next few years, currently it is very manual and time consuming today.

2.3.2. Phone Bots – 2nd Highest ROI

A bot for phones is still being worked on it does customer service so well done that you cannot tell it’s a bot. You can set different accents, different languages, and you cannot tell it’s a bot. The next evolution of that is via the phone.

As we increase our focus on international expansion there are localized forms of payment, there is localized marketplaces. The bigger your bet in international, the more important it is that then your website delivers on the needs of your international customers.

2.3.3. Automated website translations – 3rd Highest ROI

Another technology is being able to have the website be based on your geolocation and adapt to the language which already exists. But instead of people translating the website, the website is translated automatically. You upload content to the website in whatever language and everything is translated. There’s still a lot of human work involved in doing translations and ensuring that the translation is correct, but you can see when in Google Translate how far they have come in the last few years.

2.4. How important is integration across the automation ecosystem?

It’s going to be very important when we’ve employed various types of technology, and not all will be from the same vendor. If you don’t have the automation integrated, then the connection between one and the other will still be manual. It will still be slow requiring more maintenance and more training. The more you integrate all the systems, the more of a true cyber brain you will have running all things that could be delegated to systems, and the less you have to rely on people. And you can use people to focus on things that; cannot be automated; are very highly skilled; or that are more strategic or creative in nature.