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“The week of Valentine’s Day, the intent to purchase is so high that we’ve seen — and we’ve tested this a few times — we’ve seen people convert better on our normal shopping experience for that week because they don’t even need to know our story,” Hudson said. 

The retailer’s conversion rate increased 12% year over year for Valentine’s Day 2023. A large part of the retailer’s sales come through its customized landing pages, Hudson said, declining to provide dollar figures. 

The retailer had its highest sales number on Feb. 12, Hudson said, though she declined to provide a dollar amount. 

“We all knew people were going to wait until the last minute, and they did,” Hudson said. 

Using a ‘Fastr Frontend’

UrbanStems is always monitoring its conversion rate, and it continually tests design features to improve conversion, Hudson says.  

The “normal shopping experience” on UrbanStems.com uses Salesforce’s ecommerce platform and is limited to Salesforce templates. UrbanStems also runs design feature experiments using web design vendor Zmags’ Fastr Frontend interface, which connects to the platform via an application programming interface (API).  

The vendor allows Hudson to add new pages or custom-designed sections of pages to UrbanStems.com that aren’t limited to its ecommerce platform’s template, rather than submitting a ticket to the retailer’s web developers each time she wants or needs to make a change.  

“It’s for a creative audience to be able to do things on those key parts of the site where your brand vision is paramount,” said Ryan Breen, chief technology officer at Zmags. “You really want to do something not restricted by templates.”

Breen said its typical to see a drop-off after a shopper goes to a landing page that a company put “all their effort into” creating.

“I know the moment. I’ve fallen off,” Breen said. “Hand-designed, cool site, to template hell. It’s usually right around the category page.”

There are often differences in opinion among the merchandisers, marketers and development agencies producing custom pages, Breen said.

“Everything becomes a ticket to another team to another team to another team, and you aren’t doing that in a day,” Breen said.

Changes UrbanStems makes to improve conversion

Some of the changes UrbanStems made include adding a countdown timer, updating promo codes in real time, creating shoppable tiles on the retailer’s blog, and using an inventory badge that indicates how many units of a product are available. Each change helped UrbanStems improve its conversion, Hudson said.  

When UrbanStems tested a Zmags landing page versus its normal shopping product listing page, the Zmags landing page always had a higher conversion rate compared with the normal shopping page, Hudson says. 

In the case of Valentine’s Day, the Zmags product landing page (PLP) UrbanStems created on its site resulted in a 35% increase in conversion compared with its templated PLP, Hudson said. UrbanStems tested the page from Jan. 24 to 29.

“We weren’t even expecting to run the test so short, but the numbers were so significant,” Hudson said.

The Zmags pages have tested and performed so well for UrbanStems that the retailer now tests one Zmags frontend page versus another to see how well different creative leads shoppers to convert. 

UrbanStems top-selling Valentine’s Day products

“Unsurprisingly, red roses were our top seller,” Hudson said.

And the retailer saw the biggest conversion lift on SKUs in the $70 to $100 range, she said. Furthermore, people are more likely to include add-ons such as vases to their Valentine’s Day purchases, she said. 

UrbanStems also orders in lower volume SKUs that have a higher price point to experiment with what shoppers are comfortable purchasing. The flower retailer offered a SKU for Valentine’s Day that was over $200 and sold out.

“Granted, we ordered at a significantly less amount, but I’m always honestly surprised to see what people are gravitating toward,” Hudson said. “I think sometimes it could be that when you see a higher price point, it feels like a more luxurious gift, which it certainly is. The over $200 price we offered had a mixture of fresh florals and orchids in it, which we’ve never done before, a bouquet with mixed orchids. It came with a vase as well. The fact that that sold out was a little surprising to me because it was something different that we’ve never sold before.”

UrbanStems also offered peonies during the Valentine’s Day season. 

“Peonies overall was a huge win for us,” she said. “We actually sold out of peonies a week before Valentine’s Day.”

All those SKUs led to UrbanStems’ average order value (AOV) increasing 12% year over year around the February holiday.

Making marketing adjustments by channel

Hudson said even though UrbanStems knows the intent to purchase is “really high” leading up to Valentine’s Day, the retailer also wanted to make sure it showcased products at price points it knew shoppers were looking for based on sales data at the end of January and in early February. 

It also wants to make sure it’s sorting products that are on sale or have a high buy-to-detail rate. Buy-to-detail rate is an analytic that shows the percentage of people who bought an item on a website after viewing that product’s page. 

UrbanStems only used Zmags in its landing pages for shoppers coming to the site from paid social media marketing. The retailer didn’t experience any dips in conversion leading up to the holiday, Hudson said. Additionally, UrbanStems increased conversion on paid social 83% year over year. 

Moreover, it spent less on paid social this year compared with 2022. Paid social transactions increased 27% year over year, she said. Those transactions come from Meta, TikTok and Pinterest. UrbanStems targeted the male audience on Meta platforms and found it responded to promo codes and the countdown timer Hudson implemented. 

Those performance increases were “pretty wild for us and really exciting,” Hudson said. The next big challenge, she added, is taking those wins and applying them to its next big sales period: Mother’s Day.

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ReverseLogix is a returns management system designed to streamline the return experience for customers and reduce costs for retailers. Fortune 500 and 100 companies including Shopify, FedEx, and Samsonite are customers.

To offer free and low-cost returns, retailers must process them efficiently. If customers are happy and data is used to make improvements, they can actually be a “superpower,” he said.

Saran shared ReverseLogix’s three principles of returns: 

1. Transform a difficult process into an enjoyable experience for loyal customers
2. Minimize losses
3. Maximize intelligence

Returns are the key to loyal customers

Making returns easy for consumers is a way to create a loyal customer, Saran said. Free returns in particular are important to customers.

An August 2022 Digital Commerce 360 survey of over 1,000 consumers found shoppers regularly consider a potential return before they purchase. 54% take free returns into consideration, and 39% also look at the cost of a return. One-quarter of consumers said the timeframe is important.

Giving customers a good return experience is crucial if retailers want the customers to shop with them again, Saran said. One strategy for wooing customers with convenient returns is offering home pickups and alternate drop-off locations, like reverse logistics vendor Narvar. A courier picks up the return from the customer’s house and ships it with the appropriate service. That convenience resonates with customers.

31% of respondents in the Digital Commerce 360 survey said that they prioritized the convenience of returns over other considerations.

Minimizing returns losses

Returns are never ideal for a retailer, Saran said.

“The minute someone starts a return request, that is an instant loss for the brand. No matter what you do, it’s a loss,” he said.

But successful retailers can find ways to make those losses as small as possible. They can also give merchandise a second life by getting it back into stock or circulating in recommerce.

In 2022, about 16.5% of retail purchases were returned, totaling about $816 billion, according to the National Retail Foundation. Salesforce predicted a “return tsunami” in 2023.

Part of minimizing these losses is processing returns quickly and efficiently, reducing the amount of time and employee hours spent on them, Saran said. 

Global Retailer, a U.S.-based footwear retailer, said in a case study shared with Digital Commerce 360 that ReverseLogix made returns 60% faster through the customer returns portal, processing technology, and tracking technology for customers.

ReverseLogix’s integration across the retailer’s divisions was central to saving time and money.

“The retail side has its own portal to create returns,” the retailer’s director of distribution management said in the case study. “Customer service has their own portal. Our stores are integrated with UPS for better visibility and tracking. Instead of having to print one return label and one shipping label, we’ve streamlined that to one label that has all the information we need.”

Using data

Retailers typically discuss returns as a total loss, Saran said, but they’re also a rich source of data for companies. 

ReverseLogix collects data from customers on why specific products are returned, revealing problems in the product. For example, if “most customers are returning a particular product because they said it’s too tight, maybe sizing is a little bit off,” he said.

That data allows retailers to know what versions of items are selling and which are not, which can impact future inventory decisions. The ReverseLogix technology can intelligently take into account the type of product, price, seasonality, and other information to make the best recommendation for processing a return. 

Retailers use that data to make informed suggestions about how to process a return and work toward sustainability targets, Saran said. That could mean letting a customer keep a product that would cost more to ship back than it’s worth, or connecting with a local repair business. 

The data from these returns may be a missed opportunity for companies that don’t have an integrated online return process.

46.7% of Digital Commerce 360’s Top 1000 retailers offer online returns processing, and just 27.4% have free return shipping. Jewelry, apparel, and accessories retailers are the most likely to offer free return shipping.

Returns are a chance to upsell

Loop, another returns management company, said it broke return records in 2022. It says it processed a return every 1.25 seconds on average on Dec. 27, 2022, its busiest day ever, and 300,000 returns between Dec. 26 and Dec. 30.

All those returns were also opportunities to get customers to spend more money. The system, which is integrated with Shopify, allows consumers to return purchases for refunds, but they can also exchange the product. Loop surfaces other products customers could buy using the value of the refund, so the Shopify merchant doesn’t lose the sale completely.

Process returns holistically

The key to achieving these principles is integrating returns into every part of an ecommerce business, Saran said. Returns impact customer success, manufacturing, and supply chain teams, he said, so you have to think about returns every step of the way. 

The retailers that can do this successfully are able to integrate returns into the creation, shipping and purchasing process. In some cases, with the right data and processes, retailers can “convert a loss maker into almost a profit center,” he said.

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It’s a task that has become more challenging in recent years.

In 2021, in the throes of the COVID-19 pandemic, Bradley decided to replace a legacy digital commerce technology platform with a more flexible, customizable and scalable system running on headless commerce technology. The new platform’s higher level of customization — based partly on the extensive use of application programming interfaces (APIs) to connect the independent, highly customizable customer-facing interface with the ecommerce engine — required a high level of expertise from technology pros accustomed to headless designs.

Ron Flynn, manager, web systems/integrations, Bradley Corp.

But the manufacturer of industrial washroom and safety equipment temporarily lost the availability of some of its IT workers, at a time when it could take three to four months to find the most qualified people to join its digital technology team, says Flynn, who handled the project as Bradley’s manager of web systems/integrations.

Forging ahead with a mixed internal/external staff

Nonetheless, it forged ahead with a mix of internal staff, experts from a third-party consulting firm, and assistance from Amla Commerce, the technology vendor behind Bradley’s new Znode headless commerce platform, he says.

The new platform project moved along without major interruption, bringing Bradley a better technology base for interacting with and managing online commerce with sales reps, distributors and customers, says Dave Leannah, Bradley’s senior vice president of I.T.

But Bradley also used the experience to get better prepared for the next time a major project coincides with unexpected changes in technology staff.

“That kind of opened our eyes a little bit to make sure that we try to stay balanced,” Flynn says, adding, “Today, we’re very well balanced.”

While maintaining strong relationships with its consulting firm and Amla, Bradley has trained more internal staff on the Znode technology, building on the skills many of its tech team brought over from the legacy platform, which also relied on APIs for software integration.

Bradley’s run-in with a changing technology market is not uncommon at a time when many companies are launching, upgrading or expanding their digital commerce technology and ecommerce market presence amid extensive changes in the technology job market. More than 25% of ecommerce companies want to switch ecommerce platforms despite the costs, according to data in the 2023 Ecommerce Platforms Report, which covers the digital commerce technology trends for B2B and retail companies.

Digital technology companies from Amazon.com Inc. and Salesforce Inc. to SAP SE and BigCommerce have slashed their staffs as 2022 turned to 2023, and recruiters who specialized in ecommerce jobs say they’re as busy as ever matching employers with job candidates.

As companies focus on digital, IT salaries rise

Salaries for I.T. executives and technicians, meanwhile, are rising steadily, according to a recent survey from Janco Associates Inc. Average salaries this year are up year over year about 3% to $180,626 for I.T. executives at large enterprises, where I.T. staff salaries are up 5% to $82,636, Janco says. The same positions at mid-size companies rose about 9% to $159,925 and about 7% to  $83,296, respectively.

Business have driven up I.T. salaries as they they’ve increased investment in information technology in recent years, emphasizing ecommerce and mobile computing. And now senior technology executives are stepping up investments as well as online security to guard against cyber attacks and data breaches, Janco says.

The year ahead doesn’t promise to let up on the pressure on the personnel front. Among its Top 10 strategic predictions for 2023 and beyond, technology research and advisory firm Gartner Inc. says that 40% of business organizations will experience a loss of talent in their workforces by 2025 “due to labor volatility.”

Jerry Bernhart, principal, Bernhart Associates Executive Search

Jerry Bernhart, principal and founder of Bernhart Associates Executive Search, specializes in helping employers hire executives to lead ecommerce and I.T. departments. He says he’s seen an increase in demand over the past two years from small- to mid-sized B2B employers — ranging in annual revenue from under $10 million to about $500 million — who are going more digital and need ecommerce business and technology executives who can help a traditional business launch or expand a digital commerce operation.

Cement and chemical companies want digital experts

“A lot of what I’m doing is very transformational in nature,” he says. “I’m getting all these calls from more traditional businesses, a cement company, a chemical company, a company that manufactures food-processing equipment, a pest-control business manufacturer, and now I’m working with a company that provides first responder supplies and equipment.

“Digitization is an important mandate for them, and if they haven’t already moved in that direction, they’re certainly starting to do it now.”

Even with the increase in that activity from employers, however, Bernhart says he now gets about five inquiries from job candidates for every one employer looking to recruit.

Regarding candidates with the most in-demand skills, “the holy grail is a candidate with one bucket in business and the other bucket in technology and data and analytics,” Bernhart says.

Harry Joiner, founder, EcommerceRecruiter.com

Harry Joiner, the founder of EcommerceRecruiter.com, says he seeks candidates who blend those skills and insights, which makes it more likely they’ll grow a client employer’s business with online features and services that make commerce easier and more personalized for customers. Unlike personnel candidates more narrowly focused on either technology or marketing, “they don’t treat customers like an annoyance,” he says.

He adds that, while many online companies fail to offer enough personal service — “in B2B, you can’t get away with that. It’s all about the customer intimacy.”

Joiner notes that his recruiting reputation is built on how he’s brought his client companies ecommerce experts who bring value to their new employer far beyond his recruitment fee of 20% of their first-year base salary. So, he interviews job candidates to grasp the scope of their ability to understand what it takes to grow a business, like increasing customer retention rates.

“That’s what I’m looking for,” he says.

Sifting through a flood of workers

At Bradley, Flynn says his company is positioned well to continue adding features to its Znode headless commerce platform based on an understanding of customers’ needs.

While many experts caution that highly customizable headless platforms can be more laborious to modify compared to a conventional “off-the-shelf” ecommerce software that comes with many pre-built applications, “I would say it’s quite the opposite,” he says. “If you’re going to tailor an application specifically for your business, an out-of-the-box program is not going to work for you.”

Still, finding and hiring people with the right skill sets to maintain effective staffing levels is a crucial task made more challenging by workforce trends. The recent layoffs by large technology companies have thrust tens of thousands into the market, but that flood of candidates can make it more difficult to zero in on the right ones.

“Now we have to be extra diligent to make sure that we’re not getting talent that might not be the level that we require,” Flynn says.

Learn more

Flynn will speak at the EnvisionB2B 2023 Conference & Exhibition on integrating ecommerce technology with enterprise resource planning and product information management Bernhart will speak at the conference on building an B2B ecommerce “dream team.”

The 2023 Ecommerce Platforms Report is available as a downloadable PDF for $399. We also include it in Gold and Platinum memberships, which provide full access to all of Digital Commerce 360’s published reports and certain online retailer databases.

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The Top 2000 includes data from two Digital Commerce 360 databases: The Top 1000 and the Next 1000. The Top 2000 is Digital Commerce 360’s ranking of the largest North American e-retailers by web sales.

Growth slows in 2022

Meanwhile, traffic growth for Osmo’s website, PlayOsmo.com, was 262.7% in 2022. PlayOsmo.com traffic growth was almost double the rate of the second-highest traffic grower in the Top 2000.

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This chart is derived from the analysis in our 2022 Ecommerce Market Report. We add new content regularly. Check back soon for more Charts & Data stories.

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Facebook pixels traffic off existing customers, he says. Finn turned to artificial intelligence software vendor Proxima to help identify consumers beyond its customers based who are most likely to be interested in purchasing Finn’s dog supplements. There are two categories Finn wanted to reach: interest-based and existing customer/lookalike-based audiences. Interest-based groups are dog owners. They might be interested in a specific breed, or category, such as dog food or dog toys. Lookalike-based audiences are repeat/existing Finn customers. 

How does AI impact digital marketing?

Over time, the machine-learning technology identifies purchase behaviors. Finn wants to advertise to consumers likely to buy pet products. Proxima’s software maps out consumer purchasing behaviors. The algorithm takes into account the different categories consumers purchase from — consumers who also buy pet items, such as clothing or home goods. It incorporates where they live, whether West Coast, East Coast, etc., and pulls together separate audiences, which are consumers that share similar traits. 

Finn runs these groups inside Facebook’s application programming interface (API). Finn can decide how much to spend on an ad and adjust the budget for the different audiences within Finn’s Facebook ad manager account. Proxima runs a “feedback loop” to track ad performance. This includes tracking where the cost of acquisition (CPA) — the fee a retailer pays for an advertisement that results in a sale — is lowest, for example. The algorithm adjusts in real-time, reconstructing, or fine-tuning, the audiences based on successful periods to better reach potential customers.

Proxima recommends merchants spend a few hundred dollars a day driving traffic to these audiences to see who responds and what traits these consumers have. By using the same advertising, the algorithm can remove some of the variables to see what resonates and what does not.

“Think of it as an intelligent game of Battleship,” says Alex Song, CEO and founder of the AI marketing software vendor.

Finn invests more of its marketing budget to attract new customers

The online brand launched in the midst of COVID-19 in Sept. 2020. At that time, Finn focused mainly on its Amazon store. In mid-2022, the online retailer wanted to shift focus to petfinn.com, Stainton says.

Currently, 60% of Finn’s overall online sales come from its Amazon store. 40% of online sales come through its website, Stainton says. A direct-to-consumer (DTC) average order value is about $43, compared with Amazon orders at $37. These haven’t shifted much since launching the brand in Sept. 2020, Stainton says. What has changed is that Finn decreased spending for customer acquisition on Amazon and, instead, is investing more in paid social marketing for its DTC website.

In January 2022, 80% of Finn’s total advertising budget went toward promoting on Amazon and 20% toward promoting the DTC website. In January 2023, they reversed the ratio, Stainton says.

“The reason we’ve been able to make that switch is because Proxima allowed us to expand the breadth of our ad spend on Facebook and Instagram,” he says.

Urban Millennials and Midwestern housewives

Finn’s demographic of shoppers are primarily female, ages 35-55. There are two behavioral, or audience, types. There is what Stainton refers to as the Urban Millennial, who are typically women buying for their first dog and live either on the West or East Coast of the U.S.

The other type are Midwestern housewives. These are young couples where the female typically makes the majority of household purchases. This region spans from Minnesota to Texas. 

Proxima allowed Finn to split groups into a younger Millennial bucket of 35-45-year-old shoppers and the other into the housewife bucket of 45-55 year old female shoppers.

Without Proxima, Stainton could have built and tested different buckets of customers over time, he says. And once he had a big enough record of each, Stainton could create and start segmenting advertising budget toward each bucket, he says.

Instead, the software allows him to create the buckets now. 

“We don’t need to have 100,000 customers to create a good audience because Proxima is identifying those customers for us and helping us to create those audiences,” he says. “We have an approximate audience for Millennials and one for housewives that differs from what we get from Facebook.”

Finn uses AI to lower advertising costs

Finn devotes about 30% of its advertising budget to its Proxima campaigns. Of that, Finn allocates the majority (80%) for marketing toward interest-based audiences who have yet to shop at Finn. 20% is devoted to lookalike customers.

“Interest-based audiences are so much broader,” he says. “There’s a lot more dog owners than there are [Finn] lookalike customers of ours.”

Finn’s shift in strategy appears to be working. Over time, ad costs have decreased, Stainton says. Finn’s CPAs have dropped significantly to $42 in December 2022 from $72 in March 2022. Stainton attributes this decrease to the brand’s overall advertising efforts, including using Proxima software.

Where does the data come from?

In early 2021, Apple’s iOS 14 changes gave consumers the option to opt out of online activity tracking. Facebook parent, Meta, lost visibility for a large portion of consumers. It could no longer tell when someone clicked on an ad that converted into a sale. The social media company told investors in February 2022 that it estimated the iOS change resulted in the loss of about $10 billion in sales.

Proxima has data from more than 15,000 businesses and retailers that have shared customer database information with one another. Smaller brands pooled their customer data together. Retailers also provided Proxima access to their email service and SMS providers.

“When I barter my audience for yours, I don’t pay anything to anybody,” Proxima’s Song says. “I’m trading something I already own.”

Merchants also provide encrypted transactional information from a retailer’s website store through the payment processors (e.g. Stripe Inc., PayPal Holdings Inc., Venmo, among others). The information is encrypted, “anonymous,” Song says. It is coded so it can be recognized when shared with Meta, TikTok, or other social media platforms, allowing Proxima’s algorithm to track progress.

What it costs Finn to use AI

Finn maintains a yearly contract with Proxima and declined to share what it pays for the service.

The online retailer runs its website using Shopify. Stainton says he is interested in trying Shopify’s software, which also uses AI to test different audiences. Shopify’s plugin price starts at about $2,000 a month but is currently only available to Shopify Plus merchants.

Stainton says Finn is not ready to upgrade to Shopify Plus yet, but plans to do so in the next couple of months.

“The gains that we see off those campaigns have to cover the extra percentage we’re paying Proxima and the base fee — which they do,” Stainton says, without revealing how much they pay.

Social media strategy in 2023

Moving forward, Stainton says the brand intends to expand its reach on social media in 2023. For example, the online retailer has learned that videos that perform well on TikTok almost always perform well on Facebook, “but not the other way around,” he says.

So, once something performs well on TikTok, Finn adds it to Facebook and begins tracking results with Proxima.

“When we get a winner there [TikTok], we dump it straight into Proxima at scale, instead of dumping it in and seeing how it performs, [paying] more day over day and spending two weeks to scale it,” Stainton says. “We can drop it in and have a high degree of confidence that it’s going to perform in those audiences.”

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Maersk and the Berlin-based start-up Cozero are developing analytics tools to improve greenhouse gas (GHG) emissions visibility for international parcel deliveries in Europe. Since entering the European ecommerce logistics sector in 2021 with the acquisition of B2C Europe, Maersk has delivered millions of international parcels for European online sellers. Due to a higher supply chain complexity, international parcels usually have a larger GHG footprint than domestic parcels, Maersk says.

Maersk European ecommerce

B2C Europe is a 20-year-old European logistics company that focuses on business-to-consumer (B2C) parcel delivery services in Europe. It also focuses on cross-border deliveries. Maersk acquired it in October 2021.

Maersk has already successfully tested Cozero’s platform with customers. It will now roll out the platform to more ecommerce clients, the company says. The project is key to Maersk’s strategy of providing end-to-end visibility to its customers and will eventually be integrated into Maersk’s existing Emissions Dashboard, providing it with a new parcel delivery emissions module.

Christian Grosse, e-delivery chief product officer, Maersk

Since 2021, Maersk has developed the Emissions Dashboard to provide a one-stop shop to consolidate emissions data across all carriers and transport modes. Smart Freight Centre (SFC) accredits it with an industry-leading calculation methodology that is in conformance with the Global Logistics Emissions Council (GLEC) framework.

“Our customers in the international ecommerce industry by design have large gaps in their GHG footprint visibility due to the high number of parties involved in the first-, middle- and last-mile delivery process,” says Christian Grosse, Maersk e-delivery chief product officer in Europe.

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