4 practical applications of automation for online businesses

Published April 26, 2019   |   

One could argue that machine automation is a slightly controversial technology adopted by industries of the modern era. The most common argument against its implementation in business is the fear that it could mean millions of jobs will be taken over by computers in the next few years. Which could potentially mean that the humans replaced would be left without job opportunities? But, whatever your opinion or view on the topic may be, it’s impossible to deny the fact that automation does have a positive effect on many companies.

According to a report from Statista, 99% of leaders agreed that automation provided major advantages to at least one aspect of their business. A majority of leaders and employees reported that automation technology reduces errors, produces better quality products, enables better services and improves the overall productivity of the workplace.

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Automation certainly has a place in the online business sector. It offers many of these same benefits to even the smallest of e-commerce operations. However, many small online business owners often think that automation is out of their reach. Mostly because they believe that the size of their operation isn’t big in enough to cover the process of implementation and the subsequent cost.

The good news is that there are several practical ways that online brands of all sizes can reap the benefits of automation. Another piece of great news is that as automation and technology have advanced, these tools are also more accessible and affordable than ever before.

Let’s discuss four of the most practical ways that every online organization can utilize automation for a more productive and profitable business.

Automated Inventory Management

One of the biggest financial risks that online businesses must make when they open their virtual store is stocking their shelves to fulfill future orders. First, inventory storage space often must be acquired. And the shelves need to be stocked with products before a single order is even placed. Issues with inventory management can also stand in the way of profitability. If you run out of products due to high demand, you could be losing sales until items get restocked. On the other hand, over-ordering a product with low demand could mean smaller profit margins.

One of the best ways to avoid this trouble is to opt for business ideas that could be fulfilled by a drop shipper to eliminate this task altogether. While this strategy does make the process easier for the business owner, it can sometimes be dicey. There are plenty of risks that come with a drop shipping partnership since it is simply delegating the task to another party.

Instead, predictive analytics can help to make the inventory planning and management process automated through data-driven planning. Machine learning enables business owners to accurately predict when sales are going to rise or drop, which means that the shelves can be stocked accordingly. Thanks to the forecasting accuracy of machine learning, online companies can keep their profit margins high even when demand decreases and they can base their inventory orders on reputable data, rather than just taking a guess.

These solutions also work well with a drop shipping business model – as this information can be shared with third-party logistic teams to alert of upcoming changes in demand.

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Trigger-Based Communication

Reaching your customer at the right time with the perfect piece of content can have an impressive impact on conversions. This is best done by utilizing trigger-based marketing strategies that target specific customers with content based on their behavior. Businesses that utilized trigger-based email communication tend to report 400% higher revenues and 18 times greater profit margins than traditional email campaigns.

However, in order to make this type of targeted marketing strategy work, it must be based on sound data and executed properly through automation. The key to making this process totally automated is by creating a detailed customer journey map. This is to help ensure that an email (or another form of communication) is issued based on a customer’s behavior. For example, all customers will receive a welcome email if they create an account, but certain customers may be targeted with specific product promotions once they view a certain item or make their first purchase.

By setting up an automated communication system, customers will be notified with relevant content based on their actions – rather than just a blanketed email notification that goes out to everybody.

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Dynamic Content for Automated Personalization

Personalization is a huge deal to consumers these days, and the only way that online retailers can truly offer it is through automated practices. By using data, such as the customer’s location or past history with your business, your content can be customized and optimized for their experience. Making this level of automated hyper-personalization work for e-commerce requires deep roots in Big Data and behavioral analysis. There is no room for guessing games here because personalization only works on customers when it is truly customized to their preferences or needs.

For example, if certain items are typically purchased together, a customer who views one of these products could receive personalized recommendations for the related item. However, these personalized suggestions will only result in conversions if they make sense to the specific customer. Just because they viewed dog toys or children’s shoes does not mean they also want cat food or adult sneakers, even though other customers may have purchased those items together. This is why dynamic personalization is crucial. By using real-time data, the content can be customized specifically for the customer based on their own behavior.


Source: Vans promotional email

Price Adjustments for Profit Optimization

Predictive analytics can help keep profit margins as high as possible during demand slumps by automatically adjusting prices. Since there are so many online retailers, a price difference of a mere few dollars or cents can cost you a conversion. However, since online prices fluctuate all the time, it would be nearly impossible to manually keep track and adjust your pricing accordingly.

Automated tools can keep track of fluctuations in the market by checking competitor’s pricing, along with demand changes. From here, you can adjust your pricing to ensure the best profit margins possible.

This can also be incredibly useful for alerting your business of the best times to run promotions or sales on specific items. If demand is about to drop, or items have been stagnant and eating into profits, running a promotion could help to clear the shelves for new products. By using predictive technology, online retailers can have a data-driven approach to their sales strategies, rather than shooting at the dark and changing prices on the fly.

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Although automation offers online businesses lots of benefits, it is important to note that the implementation of these systems takes time and effort, along with hearty data analysis. However, considering the fact that automation can save you time, money, and effort while simultaneously improving your customers’ experiences, it is well worth the investment.