Case Study: The Start of Logic Based Commerce

Logic based commerce is a first of its kind in defense of retail

The History

If you’ve ever had to deal with the competition of online retail with your classic brick and mortar store, you know the challenges associated. Retail has undergone a tremendous transformation over the last decade, and the changes are far from over. We went from a period of retail glory during the 1970–80–90’s and even early 2000’s where it was simple to set up a storefront in a decent location, grab passersby and enjoy the benefits of selling items. This glory period was set up in part because a massive insurgence of new real estate, and a new market coming of age. At the same time, you had very cheap manufacturing from China and the extremely simple and at the time effective advertising methods. Each store was very similar, yet may have had different merchandise to set itself apart. In this same time period (actually slightly earlier) there was an emergence of the first department stores which took over as the anchors, offering everything from clothes to furniture and shoes. The department stores capitalized on credit card usage which made it easier to track trends and keep people buying, specifically the women’s segment. With the department stores popularized, a new retail method developed in the off-price space. Stiff competition kept retailers undercutting each other into a price war, which inevitably played right into the hands of the classic retail killer: eCommerce. With prices already trending down, and stores struggling to keep up with off-price and discount brands, eCommerce came along to provide a new avenue for selling goods, which nearly anyone with a computer could do (though it was quite ugly!). As the 90’s developed the eCommerce concept, and the 2000’s fully embraced the eCommerce idea, classic retail struggled to adapt their stores to handle the new wave of commerce. Since the introduction of eCommerce, not much has changed from a technology perspective. With that being said I’d like to be (perhaps) the first to introduce you to the concept of logic based commerce and the impacts it is having on the retail environment of the modern day.

Time to Evolve

The way retail evolves now must take into account many different factors than the simple brick and mortar days before it. Retailers now must face the extreme pressures of globalization, the internet, and startup brands which have come into the market only in the last 10 years or so. In this circumstance, the pressure the evolve becomes far stronger. The problem, though, is classic brick and mortar businesses, who have tried to change, are not keeping up with the direct competition of the faster, agile pure-play online retailers or omnichannel from the start retailers. Therein lays the problem, and herein lies the solution. Logic based commerce is a new wave of commerce which takes into account all the new era decisions faced by retailers in order to drive business. Logic based commerce takes a seemingly endless supply chain, multiple market segments, varied customer preferences, and competitive forces and boils it down into a series of decisions made on behalf of the retailer. Logic based commerce is a solution that uses data, artificial intelligence, and human decision making, to set up workflows natural to the way consumers buy. It’s the next wave of retail because, until this point, most retailers and/or eCommerce companies have been using a static approach. I mean static in that they choose to keep similar products flowing through a similar channel, powered by similar platforms, and using similar marketing campaigns. This is not how we set ourselves apart as logical retailers.

Why Is Logic Based Commerce Emerging?

Let’s take a look at how the evolution of retail up until this point has been helped by technology. Sure, we have the biggie of eCommerce, which, now anyone with $29 can get a theme and set up an online store. This is at the most basic level of eCommerce and is not considered advanced, ahead, or any other word related. In another realm, we have the omnichannel retailers. This is an exciting time for omnichannel, and it’s the main buzzword floating around the retail space. Omnichannel combines the physical retail format, with an online presence like eCommerce only the products are synced across the channels offering customers the choice of buying online only, buying in store only, or buying online and picking up in-store, as well as other combinations of the same. This method has done really well according to a recent Harvard study of 46,000 shoppers which stated that 7% had purchased online only, with 20% stating they purchased online only and finally a whopping 73% who purchased across channels. That’s a good signal omnichannel is working. Beyond this, we rely on marketing campaigns which still involve print/radio/TV almost at the same rates as back in the 90’s. There have been some advances in the placement of product through social media, and through ad networks which use caching to show product after a person has viewed it on your site. These are the most advanced forms of retail available today, aside from logic based commerce. While most of the systems we see in place today have addressed the need to serve customers at different channels and through new advertising, they have failed to connect with consumers in a way that best suits their buying habits. By this, I am talking about serving the right products, at the right time, with the right channels, and all entirely personalized to this one consumer. Logic based commerce does this by establishing logic (or rules) to decide what to do based on every action this consumer takes. Let’s dive in a bit more with some examples.

Examples of Logic Based Commerce in Action

Since the concept of logic based commerce is rather new, it helps to view how this system changes the retail landscape. Here’re a few examples to help demonstrate the point. Let’s say a consumer is searching around for brown shoes (to keep it easy). They search online and eventually come across your online store. First logic based commerce pulls this consumers “cookies” (those things that track us as we move around the web) to realize you were looking at brown shoes. Immediately the logic states to find similar items and present them to this consumer first on the page. Now, the customer decides on a pair and places it within her cart. Logic based commerce now dictates the priority of grabbing an email to save this customers information and preferences. If it’s not there, artificial intelligence will search online databases to find this information, and save the information for her. Unfortunately, she leaves the site without a purchase. Logic based commerce has already saved this session and 1 hour later sends an email informing this consumer that she has items in her cart and should complete the checkout. After two days and no success in creating a customer, a new event pops up. The consumer is driving by the physical equivalent of the online store. Logic based commerce picks up on this movement, and announces the shoe she wanted to buy, is available at the store less than 0.5 miles away from her location. This consumer, who had no intention of purchasing, is now on her way to the store to grab the shoes she never purchased before. While this example, to some, might seem a bit invasive it is not even within reach of the way Google uses your data to personalize everything about your life. This personalization and “always on” functionality is actually what consumers want, whether they admit that or not. Things that make our life simpler, are automatically adopted faster, and more effectively than luxury items in our lives.

How Do I Input Logic Based Commerce?

What’s most important perhaps in the approach to logic based commerce, is having the right place to put your logic on how things should work. While machines and algorithms do a lot of the data gathering and organizing for use, your role comes in the way you actually want to use the information. If you’ve got a team of programmers, some servers, and a way to gather all the data, you’ve done it. That being said, a commerce system which does all these things for you, with an interface to input your logic based commerce decisions is probably an easier way to go. For this, check out the Epic Commerce system which is the first of its kind logic based commerce system. It automatically collects data on your potential and existing customers and provides you an easy way to input your logic based on what decisions and actions should be taken depending on this consumer’s action. With this simplicity, you can set it and forget it. The system takes over once you’ve input your logic so all decisions happen without you having to monitor it. Even if you don’t have to monitor it, how do we reach these people? Perhaps this is the best thing about logic based commerce. As the system finds out more information about your customer, it uses this information to send out the appropriate messages to these customers. This could be in the form of email, text, tweet or any other channel you can talk with your customer. Emails are the most effective, which is why in a logic based commerce system, based on each event your consumer has made, it chooses the appropriate response, fills in the details within an email, and shoots it off, as if it were personalized for one person! What we have now is something that, constantly monitors your online and offline stores, to determine what the best possible course of action is for this customer to completing a purchase. Powerful commerce requires powerful software, so, what’s the next step?

What’s your Next Logical Step

Chances are if you’ve read through this, a logic based commerce system may be right for you. In some ways, you might be able to get started with logic based commerce easier than you think. Some simple things, such as cart abandonment, is possible in most commerce systems. You may have to look for an app to do that, but it’s one way to get started. If you’re fed up with antiquated and outdated systems that don’t do the job, you can check out the first logic based commerce system which will easily migrate your existing online and offline stores. When migrating, everything comes over seamlessly, fits within the site design you want, and begins working nearly right away. Once you’ve got the email and message formats you’d like to use, we connect these templates in, and Epic Commerce handles the rest. Perhaps you’d like to check out the tutorials on how logic based commerce works. Or, you might want to reach out to a specialist@orkiv.com so you can have direct access to someone who can relate to your unique situation and deliver the right solution to combat your issue.

We look forward to hearing any questions/comments or inquiries about logic based commerce!