Technology hacks for cost savings in e-commerce

In e-commerce, there are many areas with significant cost reduction potential that can drastically increase a company’s profitability.

In this blog article, we will focus on three key areas with enormous potential for cost reduction: optimizing the e-commerce architecture, implementing self-service functions for customers, and tools for reducing the number of returns.

Optimizing the e-commerce architecture: a hybrid approach instead of replatforming

To meet increasing customer expectations, implement new business requirements and make business processes as efficient as possible, e-commerce systems must be continuously adapted.

In particular, monolithic systems or SaaS solutions that do not allow for customization reach their limits quite fast. In this case, it is recommended to optimize the current e-commerce architecture, starting with a comprehensive evaluation of the technology stack and integration capabilities.

There is no need to set up a new system; instead, certain functions can be separated and set up individually. This makes the system more agile and significantly more flexible. Custom requirements can be implemented as desired alongside ongoing operations. This saves resources and also improves the customer experience.

Digital self-services + automation + AI

Self-service functions in e-commerce significantly reduce operating costs because customers can independently perform tasks such as product configuration or after-sales support. AI-powered chatbots also provide them with immediate assistance. As a result, valuable resources are under less strain on the customer service or sales side.

Automation also reduces manual tasks, which lowers labor costs and further minimizes the risk of errors. In addition, the integration of APIs and robust software solutions ensures a smooth flow of data between systems, further increasing efficiency.

Ultimately, the key to a successful self-service strategy is to reduce friction – making it as easy as possible for customers to achieve what they need without contacting support, while providing a highly personalized, expedient experience. By doing so, organizations can achieve significant cost savings and increased operational efficiency overall.

Relevant content, data analytics and augmented reality to prevent returns

Management systems and visual aids

Technologies such as Product Information Management (PIM), Product Content Management (PCM) and Digital Asset Management (DAM) ensure accurate and consistent use of product data across all platforms.

This helps to avoid misunderstandings in advance. Combining this with a realistic presentation of the products using visual aids such as 3D views, high-quality images and product videos reduces the likelihood of returns.

Augmented Reality

AR tools offer significant cost-saving opportunities in e-commerce by enabling customers to virtually experience and interact with products, reducing the costs of on-site demonstrations and decreasing return rates through better customer understanding.

Although AR requires upfront investment, the long-term savings from reduced support, travel, and returns processing costs can lead to a quick return on investment (ROI).

AI and ML

Personalization engines based on AI and machine learning help reduce the cost of returns by offering products that are more likely to meet customer preferences. By leveraging customer data platforms (CDPs), companies can efficiently integrate customer data to make more accurate product recommendations, minimize unnecessary purchases, and reduce associated costs.

Automation in returns management

Automated returns management systems streamline the returns process, saving companies money. They enable customers to initiate returns online, offer alternatives such as exchanges, and optimize logistics.

By routing defective products directly to manufacturers or processing in-store exchanges, companies can significantly reduce their shipping and handling costs, thereby increasing overall operational efficiency.

Summary

By strategically investing in technology and optimizing key areas of their operations, e-commerce companies can significantly reduce their costs. At the same time, they can increase customer satisfaction, ultimately paving the way for sustainable growth and higher profitability.