On today’s episode, Kunle is joined by Oren Inditzky, VP of Online Stores at Wix, a website builder that offers quality features that eCommerce brands can use.
Oren Inditzky became passionate in the space of mass-market consumer product management software and internet when he worked in Amazon as a Kindle reading app intern. After working with a few more companies, he went back to his homeland, Israel, and led the Wix online store. His knowledge and hopes of better service of AI are coming to fruition which could potentially increase the success of small and medium eCommerce brands.
Wix’s goal was primarily website creation but with the changing times, it widened its horizon. Wix now provides an all-in-one platform for small businesses to build, manage, and grow their business. The platform includes a wide range of tools, from website builders, to analytics, to marketing tools, to payments. Wix’s goal is to make it easier for small businesses to succeed and grow.
It’s an insightful episode as you’d hear Kunle and Oren talk more about Wix and its features, generative AI and machine learning, and how merchants can use the power of AI to grow and build their business.
Here is a summary of some of the most important points made:
On today’s interview, Kunle and Oren discuss:
This episode is brought to you by:
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If you have been following my journey here on this podcast, you’ll know that I am a Co-founder at Octillion, a consolidator of digital-first good-for-you CPG brands. We acquire brands with a view to scaling them up. We currently have a portfolio of three brands all powered by the commerce platform Shopify.
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Shopify helps you turn browsers into buyers with the internet’s best converting checkouts, which is a whooping 36% better on average compared to other leading commerce platforms. You’ll also sell more with less effort thanks to Shopify Magic, your AI-powered all-star. I remember the first brand we acquired was running on another platform with quite poor conversions. We made it a point of duty to get it migrated over to Shopify and our checkout conversions doubled.
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Oren, welcome to the 2X eCommerce podcast. Oren, you’re the VP of Online Stores at Wix. You’re responsible for product management, engineering, UX design, operations, an accomplished business and product leader for mass market SaaS eCommerce and mobile apps, and a serial CES awards winner four years in a row. That’s amazing. Oren, it’s a warm pleasure having you on the podcast.
Thank you very much. It’s great to be here and thanks for having me. I’m excited about it.
Before we jump in, we’re going to speak about AI and eCommerce, it’s hot right now. Black Friday and Cyber Monday have passed. I want to know more about you. You’re an award-winning software leader and you’re a product leader. What’s been your journey till now at Wix?
I’ve been in the tech space since 2009, first of all, in R&D. I then moved into a product space after I’ve done my MBA at MIT. I crossed the ocean from Israel to the United States. I remember falling in love with the space of mass market consumer product management software and internet. When I first became an intern at Amazon.com, being an intern for the Kindle Reading app for Android and iOS, I couldn’t even believe that they pay people to do this job. Ever since then, it’s been a huge passion of mine and, luckily, it also became my career.
Moving forward, I also did some time at Dell leading all the software products for all of their devices. I spent some time at Expedia heading the product for one of their major brands and that was the first time I interacted with eCommerce. It was a great segue for me to move back to my homeland, Israel, and lead the online store space here at Wix and impact many people and provide them with the means and tools to generate a business and income for them and for their families.
Wix, as far as I remember from my SEO days, has always been viewed as a page builder. When I think about WordPress, a top competitor in the space would be Wix. What came about Wix eCommerce?
As you all probably know, Wix is a world-leading website building platform. Wix eCommerce provides merchants with professional tools to establish, manage, and grow their eCommerce businesses. In general, our platform provides merchants with capabilities to sell their products across various channels, including their own branded online stores at Wix, their own native mobile app, physical point of sale, as well as native integration with any external eCommerce marketplace and social media platform that you can think about. In addition, we also provide merchants with the ability to manage the back office of their eCommerce operations from end-to-end, covering activities such as sourcing products, managing inventory, accepting payments, fulfilling and shipping orders, obtaining analytics, and so on.
Additionally, merchants can also leverage a wide spectrum of marketing and eCommerce tools to increase traffic, enhance customer engagement, boost sales, and grow their business. Something important to mention is that the platform also includes hundreds of integrated third-party apps and it is built also to be extended or replaced by both developers and the merchants to further customize a solution to create tailored unique eCommerce experiences at scale.
You’re fully vested into eCommerce. Is this the focus of Wix now or is it a bit of page builder and eCommerce? What size is eCommerce versus the rest of Wix at this point in time?
Wix was established as a website creation but quickly, we were able to understand that this is your place not to only generate your online presence but also your online business. Pretty quickly, we grew up various verticals. We have Wix restaurants and we have Wix bookings for scheduled services. We have Wix events and we have also Wix online stores. Specifically, we’re in charge for the vast majority of the income for Wix. Here at Wix eCommerce, we mean business. We have over 700,000 stores that are selling products right now so we’re pretty big in this space. It’s a pretty big thing what Wix is doing these days.
I like that idea of verticalizing with a built-in solution or a one-off solution for restaurants, for instance, and then diversifying into commerce and other places. I didn’t know that so that’s interesting. Let’s jump into the crux of the matter. When the opportunity to speak to you arrived at my desk, what caught my attention was artificial intelligence and eCommerce.
In our businesses, we use AI. In fact, we empower every single unit to use AI to its fullest potential, whether it’s customer service, trying to improve the helpfulness to customers, or whether it’s our backend team ensuring that the email etiquette is good or running calculations through. We’re using it. I want you to give us a broad overview of how AI is making an impact right now in eCommerce and what operators reading this should be aware of from a first-principles perspective from your opinion.
Artificial intelligence was always a big word that sounded complex and that you need to be an advanced developer to deal with it or maybe an enterprise to even enjoy those capabilities. What we’re seeing is how it’s all been accessible, practical, and easy and almost fun to use. It’s important that merchants today would understand how easy, accessible, and practical those tools are. What I want to focus on is what any merchant can do tomorrow to leverage AI and to help their business grow. Today, AI offers tremendous advantages for online merchants.
I want to talk mainly about two types of AI that can benefit online merchants. The first one, the one that’s making a lot of headlines, is generative AI. The second one that sounds more frightening, I would say, but it shouldn’t be is machine learning. Generative AI enables online merchants to effortlessly create original eCommerce-related content.
Machine learning uses a data loop process of capturing data, analyzing it, translating insights into adjustments in the store, and then continuously making adaptations to further optimize. In other words, it takes input from customer interactions to improve the experience for the subsequent customers. Let’s focus first on generative AI, which is making a lot of headlines, and then we also talk about machine learning. In terms of generative AI tools that could be used today, I’ll focus on a few built-in generative AI that we have natively within the Wix eCommerce platform.
Bear in mind that outside of Wix, there are other platforms. We should broaden it a little bit.
First of all, if you’re starting to think about maybe getting to the eCommerce space, AI can help you start this journey. It can help you choose your right business name, locate the perfect domain address for you, and also design for you a professional logo. All those things that usually take business people a lot of time and an effort to start, this is from the get-go, AI can remove the friction for you. Once you’re in this business or you’re already in this business for many years, AI can do a lot of great things for you.
First of all, in terms of customer acquisition, and it’s important today as customer acquisition costs are skyrocketing, AI can help you brush up your SEO, and it can create optimized suggestions for your title tags and meta descriptions based on existing page content. It also allows you to change the tone of voice to match your brand. We’ve seen how the SEO improves and then how you can benefit from acquiring more customers more easily being it all more cost effective.
In addition, online merchants can also use AI to quickly and effortlessly generate professional product descriptions that do several things. Good product descriptions are making products more self-explanatory, they’re bringing more trust, and they help customers make more informed product decision. Ultimately, it improves the customer experience and boost conversion and trust. Product description is a great way to use it.
Also, something that we have in our editor but you can see it a lot is the ability to use AI text generator for any type of website content. It’s not just for the product description, it can produce all the titles, paragraphs, and taglines that your site requires by answering a few simple questions that are engineered to generate the best results specific for the website content that you’re looking for.
Other things that I want to talk about that also relates to content is anything that relates to image creation. Visually compelling content can lead to increase in customer engagement and, as a result, boost conversion and sales. Today, you have AI image creation tools that can allow you to describe the image that you’re looking for and generate unique image for you, for your homepage, for your category page, or whatever you need.
Beyond that, think how much friction, investment, and time you needed in the past to start an online business. You finally have a product and then you need to schedule a shooting day and pay a professional photographer and find the right area and sometimes even fly over to a different country. Today, you can potentially take a photo of your product with your phone and with a few simple auto background removal and background changing an image enhancement tool, you can generate perfect enterprise-like images for your product that generate stats and show you in a more professional manner. These are all things that you can do with a few clicks.
Beyond the AI features that are native, and some of them are native integrated into Wix, there are so many different third-party apps that we see in our app market but in many other places as well. You can generate eye-catching graphics or you can enable AI powered chatbots to improve customer service and make customers more informed 24/7. You improve the turnaround time as well as the quality of your answers. These are no longer one question and simple answer but more of a conversational type of chat bot that can understand the intent of the customer and provide them with the answer that they’re looking for.
Beyond the specific eCommerce tools that I talked about that we have natively at Wix or third-party applications, even if you look outside for more external generative AI tools, those can help you generate a lot of different things that are important for your business. First of all, we’re talking about customers FAQs and those are super important in order to provide better customer service and allow customers to make more informed decisions. Regarding acquiring more customers, there are tools out there that can allow you to generate social media posts to promote products and now sales and engage with followers.
There are tools out there that can allow you to create your email marketing campaigns, both the content, the title, and the right strategies. Blog posts both help you with SEO as well as the ability to attract customers to your website not only to transact but also to gain the right knowledge that they need in that space and then to keep them coming back for more. These are everything that is practical, easy, and accessible that people can do in terms of generative AI. I also want to talk about machine learning and this is not making a lot of headlines these days.
Thank you for the definition of generative and then machine learning clearly. I get that machine learning learns from insights and it continuously improves. It’s like a self-improvement platform, which you’re going to talk about next. Going back to generative AI, what I picked up from what you said is speed to market so things like name, logo, or domain all sorted. The vast majority of every other thing after that is content and chat box. Real-time content is a machine that would speed up your ability to churn out your SEO title, meta tags, and description content both from a product description standpoint to FAQs, blogs, social media, email, and as well as then images.
One issue I’ve had is there have been AI agency services I’ve reached out to help with product images and it is coming almost as expensive as using a photographer. This is anecdotal. In all of that, do you have any recommendations on AI-powered photo solutions that eCommerce readers of this podcast should be using at this point in time for professional enterprise grade product photography as you said?
I would recommend the one that we have natively within Wix that allows you to take a photo, remove the background, change it, and then choose the right theme for the background that you can use for your products. I would like to say something that every day, those solution would become better and better. Prices would come down and the quality would come up. I’m talking about in an exponential pace right now.
We remember DALL-E coming with the ability to describe something and get an image and how it was months ago. If you look today, there are many different tools, more than we can count on our fingers from Ideogram to all those things that are way better now. Every day, that’s the magic of how those tools is being optimized. The more people are using them, that loop continuously improves them and getting them better and better. I’m not even talking about the computing power that is also getting them better.
Also, the competition. More and more companies are jumping into this ocean and what’s right today is not going to be right in a month from now and not right in a year from now if we’re going to talk about it again. That’s going to be obvious that I’m sure that we’re not going to even have this question anymore. AI is going to be able to even tackle way more complex problems.
For example, what about pricing? Think about pricing. The pricing today is a big dilemma that sellers face every day. We’re starting to see some pretty good tools that allows you with some recommendation of how to price your products but they’re not there yet. You can define for them which similar products to look at and use competitive information to provide you with the right recommendation. There are many factors that should be taken into consideration when making the right pricing suggestions. In the future, this is going to be solved.
What about inventory management? We’re starting to see tools that are doing it well. In the future, it’s going to be a no-brainer. What’s happening well in that space is the content piece as you can see and as we can feel as consumers but there are so many actions where you can hand over and delegate decision-making to machines to make it faster for you and to make it better for you and we’re going to see it improving in a very fast pace.
Do you think pricing and inventory management should be more in the domain of machine learning rather than generative AI?
For sure, it’s definitely that space. We’re going to talk more about machine learning that is already available today, Monday morning stuff that merchants can do. I see how machine learning, which is already happening at the enterprise grade, are becoming more accessible and more cost effective that could be used by any merchant by of any size.
I do see, in the space of generative AI, that shaping up to like an all-in-one solution. There’s still no dominant player yet in eCommerce as yet. It seems like you’re hugely handicapped if you’re not tapping into AI now to streamline. The challenge with most businesses is how do we streamline at scale these changes and also fact check it from a human standpoint before going public? It’s so wild, wild west right now. What timelines do you think the generative AI of eCommerce will need to shape up given there are a glut of tools out there right now?
What’s the question? In what time we’re going to be in a place where it’s going to provide you with scale, meaning no fact-check needed, and just going to do it for you?
For instance, when I’m using an SEO tool, something like Semrush is the de facto in my head from analyzing and crunching data. For generative AI, at this point in time, there’s ChatGPT but ChatGPT seems to be like a baseline engine that power sets and standardized platforms. It seems like there’s a lot of decentralization now because everybody’s trying to win certain places.
Eventually, for product descriptions, there would be a tool out there that would either be sat in your eCommerce platform or powering your eCommerce platform to help you write smarter title tags, meta descriptions, and content in real-time. If there are any macro trend changes, it picks that up and adjust to it. You’re not having to be reactive, you’re proactive. The thing is those powers, historically, the most powerful will be with organizations. ChatGPT is the $20 crude oil, in my opinion. Refineries are popping up but we need to know which refineries to tap into longer term. That’s my thoughts anyway.
I’ll tell you what what’s happening today. For example, ChatGPT. ChatGPT is a general tool. Where we or other eCommerce platforms provide value is that our people, our experts in our space, and we know how to engineer the prompts in a way that by asking you simple questions, we can generate the right product description for you, and we can generate the right SEO meta tag for you.
What you see happening today is that we have the common engines of the GPTs of the world and then the experts on various different fields are adding their own layer to it. For you, as a customer, it comes seamless. You’re being asked three different questions, we generate it for you, you pick the right option, and it’s already being optimized by us for eCommerce, and it’s already been optimized by other people in other fields.
The true magic is going to happen when machine learning is going to integrate with generative AI because then you won’t need to be proactive all the time, it could do it for you in real-time based on customer demand or optimizing whether this product description is converted or not. It’s constantly optimizing it and generating that feedback loop for that generative AI engine. We’re so close to that because there are a few different capabilities that needs to be connected together. It’s all out there and it just needed to be connected at being handed over to the end user. We’re close to that time. I don’t even think that we’re talking about years.
In that scenario, how do eCommerce brands and businesses truly differentiate themselves if all that power is available to everybody?
AI is that engine that activates the tools. If you have design capabilities or you have vertical capabilities for scheduling or you have other different capabilities to manage data, you have all those capabilities in place and AI making the decisions for them and providing them with the right input. Think about a car, AI can provide it with the right direction, whether to turn left or right or choose this route versus the other route. You still need a good engine, pretty good tires, and the right chassis.
The way AI platforms or any other platform out there is the quality of its tools and its capabilities and then AI would be the one directing it, making the decisions for it, providing it the input, and making it constantly improved. You’ve got to have the engines, chassis, and wheels and tires out there to generate high-quality results eventually.
How would you define the engine, chassis, and high-quality tools in eCommerce?
Let’s break it down into three. You have all the storefront capabilities. You have to have the right capabilities in place to generate freedom of design and quality of design for your storefronts. You got to have those capabilities. You got to have those editors that can make those changes and they have those capabilities to provide you with that stunning look and then you need to have AI to give it directions. The other thing that you need to have are all those back-end services, whether you need a back-end stock service, automatic discounts engine, and an abandoned cart capabilities. Those are things that AI still cannot code for you but you got to have them in place so that AI can activate it for you.
AI can generate the right tactic and strategies for abandoned carts. What are the intervals in which you’re sending the emails, for example? What do those emails contain? You got to have the engine that does it for you and so on for other tools that does the marketing for you. Integration, for example, with other marketplaces such as Amazon, Etsy, and Wish, you got to have that in place. AI would not be able to generate those APIs, not yet at least, as well as being able to generate email marketing and so on.
A very simple one is AI can generate content but to what canvas or templates has it been well crafted? AI can also generate content but have you devised a tone of voice? Have you given it a soul to feed AI, which also could be copied? That is what lights up the throughput of your AI, your ads, and all of that stuff. We have a thorough understanding of generative AI. Is there any other thing in generative AI that eCommerce operators should be aware of that you think we haven’t touched upon?
No, not much. We pretty much touch upon the major things but we can meet in the future and there are going to be a few other things that are going to be thrown out there. The pace in which we look beyond the capabilities that we develop natively, I look at our app market, and every day, I got a new app coming. Now, everyone is about AI. I saw one that was added. The fact that this power is given to developers, they can just use their imagination to create these tools in a matter of months. This conversation could have a volume two with a few other additional practical tools.
I often say I like speaking with SaaS providers on this podcast for the reason that they are privy to merchant data at a quantitative level so they’re able to share trends that they see. Now, I’m speaking to someone from an eCommerce platform that runs the app. You’re one level above the SaaS in the sense that you see a lot of SaaS activity. This brings me to a question, where in the Wix app ecosystem are you seeing the most activity? What’s happening there? Where are developers paying more attention and to what solutions are they paying more attention to?
It’s funny to say it because it continues the same conversation that we had. Right now, AI is the hottest topic. We see more and more apps that are leveraging those accessible engines such as GPT to generate applications. Another thing that is happening and is already out there is we’re using AI to guide new users to make the right decision and choose the right services for them.
For example, funnels were pretty defined. You come into Wix and you say, “I want to be an online store. I’m a restaurant. I want to showcase my portfolio. I also want to use an ability to schedule events. These are my products and I need to start adding products today.” All this funnel is a conversational AI funnel. You’re almost talking to an advisor or almost like a website designing agency and it’s happening today at Wix. It talks to you, understands your needs, and is offering you different things. It’s amazing, I feel like I’m talking to a human.
On the side, you see what’s being installed for you and then you’re getting a template that is very much almost ready for business. It’s optimized for you with the right images, the right product descriptions, the right categories, and the right secondary apps and services you need. The distance from this to have a ready-to-use for business online store is short. It also made things much easier for us as SaaS providers and for our SaaS users in the journey of becoming a merchant or becoming a business online.
Within eCommerce and within AI, are you seeing more activity in marketing solutions and inventory management solutions?
Content. The biggest boost and news that we’ve seen is that space was generative AI and content. We see various different things that allow you to create great content, whether it’s images, marketing content, product descriptions, and things like this. The next thing would be taking machine learning and making it more accessible.
We could talk about several machine learning services that we have but all of those are still being either homemade with our own data science teams and machine learning engineering teams or by various external parties. What I want to see happening next is those machine learning capabilities being handled over in an accessible way to consumers and developers. We can see the same pace that we see today with generative AI generating content using machine learning to generate those pricing solutions that I talked about that the industry needs.
The challenge is the standardization of how you’re going to present the data, the API, or whatever terminology you’re going to use in AI to a way that’s scalable to SaaS-solution providers.
It takes some time until a standard is being generated but once it’s generated, then various different parties can enjoy it and then you enjoy network effects and then the magic happens.
We’ve given a lot of time to generative AI because it’s what everybody’s talking about. They often say that the bigger things lay underneath. Where the real magic is happening and where businesses are going to differentiate themselves is in this machine learning piece. Do you want to break down what eCommerce operators should know about in machine learning today?
Years ago, I attended a conference. I did a live interview podcast with a SaaS provider and they were providing more AI-generated merchandising solutions at the time but when you look at it, it’s still quite siloed. In a way, it was quite a little then. How’s that changing now? Merchandising is important. Context is super important as well as many other things. What does machine learning look like now in eCommerce? I’d love to hear your thoughts.
It’s definitely not where generative AI is and I hope that that’s probably going to be the next wave but we’re already see a growing number of tools that democratize machine learning by bringing what used to be advanced enterprise-level capabilities to any online merchants. I want to talk about several capabilities. Prior to Wix, I worked at Expedia and we have huge teams who were responsible for doing things like this. Today, I see those capabilities being handed over to my merchants on Wix.
A few highly effective yet super practical tools that merchants can use today include the ability to offer the right products in the right order for the right users. The way products are ordered in your shop pages means a lot. Everyone who has been in eCommerce for a while know that the first product gets more attention than all the others, the second one, and then there’s a cliff. If you’re able to generate the right order according to data for the right user at the right time, you can generate both great customer experience that involve way less friction as well as increased conversion.
We have these tools today, you can apply it, download the app, apply it to your online store, and then different customers sees different order of how the products are being listed, and we see great numbers in terms of conversion boost. That’s one solution that could be used. Not too long ago, you had to have an entire team doing it for you. Today, you can implement it to your online store at Wix within a few clicks.
The other things that I want to talk about are smart recommendations. These are must-have capabilities for any online store to maximize sales potential by displaying similar or complimentary products. Alongside of your products, merchants can entice customers to add more items to the cart and increase the overall order value and, at the same time, to increase customer satisfaction. These are two things that not only have been with us for a while at Wix but I also see generating great results that any merchant can use them more.
The online merchant merchandising pieces is important, particularly on category pages. Even if the customers land on a product page, smart recommendations from an upsell and cross sell are super important. Amazon have been doing it. One of the huge points here is search results. Search results also broken.
I was on a huge reputable merchant site and they’re a top UK retailer and the search results were not it. What are you seeing from a machine learning standpoint? There’s a lot of data. I remember when I used to go through search logs when I was running Magento. You’d see so many variations of misspellings and synonyms. How do you think machine learning can get into that space? There are custom solutions out there that have the solutions.
Search is one of those areas that is not a big problem to tackle. With the capabilities that we have with AI today and the computing power behind those engines, potentially we can bring way better results for users and merchants. This is not an easy problem to tackle. In the next few years, we’re going to see it getting better and better.
It’s going to take some time until you get the quality that you get on search engines such as the Googles and the Amazons of the world that have huge teams behind it perfecting their results for their specific needs. Pretty soon, we’re going to see those capabilities being exported by other companies using engines that can provide you what you’re looking for. It already exists today but I agree with you, it’s still not at the level that we are used to get from the big, giant enterprises out there.
You spoke about repricing software. I’ve spoken about this on a blog post I wrote a few years ago and I was speaking to personalization. The fact that we’re on Black Friday week and I’m connecting from a certain postcode, the website might know certain things about me which could reveal a certain price point to me. Let’s say I want it yesterday and I’m willing to pay more. How is machine learning playing out with pricing? You didn’t speak to dynamic repricing. When you mentioned pricing, you’re speaking to how you even price a product for the general markets using machine learning, historic dates, and all of that stuff. Do you want to speak to this point around pricing?
We can get a little bit scientific here but we can stop whenever it gets to detailed. I can tell you how those pricing engines work and I’ll try to simplify that. How responsible you want to be and how much you want to generate different pricing for a different user is up to the merchant. The way these things work, as someone who comes up and generate the pricing model, first of all, you need to decide what you’re optimizing for.
Usually, what those engines do is potentially optimizing for profit or conversion usually for profit. What you do is you define different variables that are going to be inputs that you provide the machine in order to generate the right price. Those inputs could be different and potentially not intuitive. It could be the device you’re using, and these are obvious ones, it could be the product you’re looking at, the geography you’re at, the different changes in discounts that this product faced in the past, and it could be the weather.
You take those variables and you have coefficients for each one and then the machine spits out a price. Using machine learning, it sees whether it was able to convert well or not so well and then constantly optimizing the coefficients for those variables to continuously optimize the right pricing to achieve whatever goal you had. It’s up to the merchant to decide whether they’re using the device their using, the specific geography, or the time of the day to generate the right pricing.
Are we going to see mass market or accessible repricing solutions in the future? The last time I checked, it was more enterprise.
For sure. The need for this is huge. Every merchant out there knows that pricing is a big deal. If you’ve been a merchant on Amazon, for example, they provide pretty good tools within their platforms but you need to understand that you’re also competing outside their platform. Pretty soon, someone is going to pick up that glove and provide some more accessible and easy-to-use but, at the same time, advanced and high-quality pricing tools.
Right now, it’s pretty simple and basic. It can look at various products and provide you with an input or recommendation based on the various product that you wanted to track as your competition. There are so many other factors such as your inventory level or the margins that you’re looking for. With what we’re seeing with AI today, a year or two, it’s going to be pretty obvious, you’re going to have tools out there that do it for you dynamically.
Why hasn’t the inventory management problem been solved with AI yet? I’m seeing specialist inventory management solutions. If you’re a fashion retailer, you want to go for specific inventory management systems that understand your industry versus if you’re selling food on a website, which is obvious. Why do you think AI hasn’t firmed up inventory management solutions?
It’s a tougher problem to tackle and it’s also because it relates to that segment of AI machine learning that we talked about. It’s going to take a little bit more time for this to become accessible for end users. Generative AI happened overnight, by the way, and no one anticipated that. Generative AI suddenly became something and a lot of companies out there had the capabilities but you needed open AI to push the envelope and force everyone to finally introduce that the customers.
We would potentially need something like this happening in the machine learning space from those companies that has those capabilities or from a distractor that suddenly does it. It’s almost like what Tesla has been doing to the electric vehicle space. Everyone had those capabilities but no one pushed them to provide them to customers. It’s a bigger problem to tackle. It requires some more expertise and specializing in the different industries. Like what happened within generative AI, the next wave would be making and democratizing also machine learning.
Oren, I want to be respectful of your time. Before I let you go, what’s a parting piece of advice for 2024 to merchants involving AI and eCommerce growth?
What we’re seeing these days is that customer acquisition costs are skyrocketing. Coming into 2024 and end of 2023, I would advise everyone to look at the holiday season not just as a one-chance revenue boost opportunity but rather look at it as a unique opportunity to generate long-term success. The holiday season is a unique time for shopping because consumers are often stepping out of their usual habits and willing to visit new brands and new products, especially as they shop gifts for others.
This is a perfect time for you to take these new one-time customers and turn them into repeating loyal customers for sustainable, consistent, and as well as more cost-effective growth. To give you some numbers to make it more tangible, we know that existing customers are 50% more likely to buy from you again. They spend on average 30% more than new customers. It costs 6 to 7 times more to acquire a new customer rather than an existing one. Those costs keep increasing.
There are several easy steps that businesses can take in order to ensure that those new customers that are coming in, willing to step out, try new products, and coming into their store, can potentially become their loyal customers in the future. I will go through a list and if you want me to focus on a specific one, let me know. Email marketing never gets old. You can use welcome email. Someone purchased from you and you tell them more about your story. You’ve seen 50% to 60% opening rates for those. Cross sell and up sell emails recommends a complimentary product.
I’m the biggest fan of content email. If you provide the users with great knowledge about their space, maybe you’re a backpacking store and you tell them more information about trails or hacks about camping, they would potentially come to you more and more because you get more than the transaction. Eventually, you can convert them to sell more. Social media connects with your customers in the area where they’re already in.
Customer service sometimes sounds counterintuitive in the space of online shopping but this is a place that people can set themselves apart. We talked about AI, use chatbots, and use generative AI to generate FAQs. Be proactive. It comes a long way in bringing back a customer. Loyalty programs are a great way to keep customers coming back for more. Last but not least, and people don’t think about it a lot, my favorite is the compulsion loop.
Ensure that every time a customer comes back into your store, there’s some variable changing surprise or a reward is waiting for them there. Think about Costco, every time you go to Costco, on your way to that $5 chicken, you see a new product that you haven’t seen there last week. It’s the thing that is bringing you back for more and more. The gaming industry has been doing great. If you can generate something like this within your store, it would entice customers to come back and it saves you a lot with regards to customer acquisition.
A lot of folks in eCommerce don’t focus on the variable reward piece, which creates habits. The execution point, as you said, is email, new content, new products, and new gifts, just throwing that in and making the cadence there. They don’t know what to expect and they look forward to the next drop, the next mention, or what have you.
Oren, it’s been a pleasure. You spoke some core wisdoms on eCommerce, which is maximize for customer lifetime value of CLTV. It’s super important. If you don’t do that, all of what we said prior will fall apart longer-term. For people who want to find out more about Wix commerce, it’s Wix.com. Oren, are you active on any social media channels? Some people would read this and be like, “I need to follow this guy.” What platforms are you most active on?
I’m on Twitter, feel free to follow me, or connect on LinkedIn. I would be happy to answer questions, connect, discuss eCommerce products, tech, and all of that anytime.
I want to appreciate your time. I appreciate all of the knowledge you brought on AI. I’m smarter now at the end of this conversation. I appreciate it. Thank you so much. Cheers.
Thanks for having me. It’s been a pleasure. Thanks a lot.