E-commerce & AI..Don't Get Left Behind
.svg)
- Why Your Data Might Not Be Ready
- The E-commerce AI Advantage
- AI: The Ultimate Competitive Advantage
- Don't Wait for the AI Revolution, Lead It with Luminous
The ecommerce landscape is on the verge of a major transformation, driven by the power of Artificial Intelligence (AI). This blog post dives into the potential of AI for e-commerce businesses and the crucial role clean data plays in its successful implementation.
Why Your Data Might Not Be Ready
Many ecommerce businesses might not be prepared for AI due to poor data quality. "Dirty data" can lead to inaccurate forecasts and hinder AI's ability to optimize operations. The good news? You still have time to get your data house in order.
The Ecommerce AI Advantage
The potential benefits of AI for e-commerce are significant. Here's a glimpse into what the future holds:
- Automated Operations: AI will handle tedious tasks like forecasting, purchasing, and inventory management, freeing you to focus on strategic initiatives.
- Enhanced Efficiency: Imagine never running out of stock or overspending on marketing. AI can optimize processes for maximum efficiency and profitability.
- Data-Driven Decisions: AI analyzes vast amounts of data to provide real-time insights, enabling you to make informed decisions about your business.
AI: The Ultimate Competitive Advantage
Companies that embrace AI will operate with superior efficiency, leading to higher margins and explosive growth. The bottom line: AI is the key to crushing the competition. Don't be fooled by rudimentary chatbots – true AI requires clean data.
Cleaning Up Your Data Act
So, how do you know if your data is AI-ready? Here's a test focusing on automated purchasing to avoid stockouts:
- Centralized Supplier Information: Do you have a central repository for supplier quotes, lead times, and past performance data?
- Shipping Details: Is your sea freight lead time data current?
- Inventory Management: Do you have minimum and maximum order quantities set for each product, along with a default inventory buffer?
If the answer is "no" to some or all of these, your data isn't ready. But don't be discouraged! This is a wake-up call to identify the gaps and take action.
Preparing for the AI Takeover: 3 Action Steps
- Centralized Product Data: Consolidate all your product information, including SKUs across platforms, carton counts, and COGS data, into a single, unified system. Spreadsheets just won't cut it.
- Clean Order Data: Stop fulfilling orders with incomplete information. Ensure accurate data capture for every order.
- Identify Missing Data: List the operations you want AI to automate in the future. Then, pinpoint the missing data points and start collecting them.
By following these steps, you'll be well on your way to AI-powered e-commerce success. Imagine a future where AI prompts like "Hey, order this product on October 21st" become commonplace. With clean data, AI can become your Jarvis, your Iron Man suit in the competitive arena of e-commerce. Are you ready to embrace AI and conquer the e-commerce future?
Watch Jared Ward’s full video for more e-commerce tips and tech updates!
Don't Wait for the AI Revolution, Lead It with Luminous
Ecommerce is on the cusp of an AI boom, but dirty data can hold you back.
Luminous empowers you to build an AI-ready business with:
- Streamlined Operations & Inventory Management: Free up your team for strategic initiatives while AI handles the heavy lifting.
- Transparent Supply Chain: Gain clear visibility and ensure smooth data flow for optimal AI performance.
- Clean Data Foundation: Set your business up for success with data organization and cleaning tools.
Book a demo with Luminous and see how we can prepare your e-commerce business for AI and explosive growth.
Video transcript
Your data probably isn't ready for AI
You probably won't be able to use AI in your supply chain because of one simple reason: your data sucks, and you don't even know it. But that's okay. You still have time to turn this around, and hopefully this video can help in some way. I want everyone in e-commerce to win.
What AI will do for e-commerce operations
Within the next three years, $100 million e-commerce companies will be able to be run by one to two people who are simply filtering decisions from AI tools. So what does that look like for e-commerce? The boring operations stuff that requires you to look at data in order to make a decision will eventually be completely taken over by AI tools.
- Forecasting: you will have a live forecast that accounts for any outside anomalies in the economy or in the world.
- Purchasing: you will be able to optimize your purchasing automatically to always get the lowest-cost inventory.
- Inventory management: you'll be able to optimize this to never go out of stock, no matter what.
- Fulfillment: with the rise of robotic 3PLs, you will be 100% efficient, with no mistakes made in picking, ever.
- Marketing: you will never overspend or underspend, and you can optimize for the highest ROAS to get the most out of all of your channels, guaranteed.
Your AI tools across all of these ops pillars will be working together like a living, breathing organism that never sleeps, never takes breaks and makes no mistakes. And here's the most important part: brands that use AI will operate a hundred times more efficiently, have higher margins, maximize their growth and, most importantly, they will crush the other companies in their industry that don't use AI.
A wake-up call for founders and operators
Most of the e-commerce operators and founders watching this video are probably going to immediately think, "I use ChatGPT, I'm ready to automate my supply chain." Here's the thing: I hope this video can be a wake-up call to all founders and operators. You probably won't be able to use AI in your supply chain because of one simple reason: your data sucks, and you don't even know it. But that's okay. You still have time to turn this around.
Clean data is the new oil
Now let's look at what you need to do in order to leverage AI when it comes. Clean data is going to be the new oil of the world. The brands with the cleanest data are going to be the ones that win. Brands that implement AI tools that make decisions from bad data will collapse. So here it is, simply: brands that use AI within the next three to five years will take over their industries. Brands that successfully use AI have clean data. Therefore, if you have dirty data, you will probably be left in the dust.
Is your data ready? A quick test
So how do you know if your data is ready for AI in supply chain? Let's run it through a test. Here's a quick example: "I want AI to automate my purchasing so that I never run out of stock." It's a wish that most operators have. Great. Here are some data points you'll need for AI to even be able to do this job:
- Do you keep track of your supplier quotations in a central repository?
- Are your lead times from these suppliers up to date?
- Do you store any data on their actual performance on your suppliers' production runs?
- Do you have any lead time on sea freight?
- Do you have min/max levels set up for your ordering at a product level?
- Do you have a default buffer for the stock you want to keep on hand?
Let's say you answered no to some or all of these questions, and I see this all the time. If you ask ChatGPT, "When should I reorder product X?" it would come back and say, "What are you talking about? I don't have any data to go off of." I wouldn't get overwhelmed, though. This is great insight. Now you know where the gaps are in your data if you want to automate your purchasing so that you never run out of stock. You still have time to get this in order before AI is truly ready to optimize for you.
Three things to start doing now
Here are three things you can start doing now to be prepared for AI when it comes to supply chain.
Number one: a single source of truth for all of your product data. And no, unfortunately Excel, Google Sheets and ShipStation typically don't count as that central repository. This is a place where you have a list of all of your products and the advanced data points on all of them. For example, for this product: what SKU I use on Amazon, what SKU I use on Shopify, what SKU maps to wholesale, my carton count, my sleeve counts, my default receiving bin, and my COGS that are recognized and pushed to accounting software.
Number two: start cleaning your order data. When a sale comes in, e-commerce companies and 3PLs have a very bad habit of fulfilling orders with dirty data, going off the title alone. For example, an order comes in with everything but the title missing, and you'll still fulfill it. What happens is that the item you just fulfilled didn't deduct from inventory, it wasn't added to your forecasting, and it wasn't recognized as COGS depleted. A lot of things just got dirty in your data, and you let it go through.
Number three: identify the advanced data you're missing and start tracking it. What operations tasks do you want AI to automate one day? List those out, find the gaps in your data and start capturing it. Just like the example I gave earlier about automating purchasing: do you keep track of quotations? Do you tier out your pricing? Do you keep track of which Incoterm you bought on? Do you keep track of production lead times and freight lead times?
Your future AI supply chain
Alright guys, so one day when you do implement that amazing AI supply chain that will blow you up (hopefully that's Luminous), you'll prompt it, "Hey, when should I order product X?" Instead of saying, "Your data sucks, what are you even talking about?" it will actually say to you, "Order this on October 21st at 8 p.m. Would you like me to draft that PO for you at the most optimal price and optimal lead time?" Then you can be like, "Jarvis, you there? Let's do that." You'll basically be like Tony Stark, Iron Man.