Web Development and eCommerce Algorithms
Updated: Jun 10, 2021
While today’s App Store might incorporate eCommerce Algorithms with machine intelligence to help your store to gather information, feed your AI to prompt clients to drive customer satisfaction and sales. What the App Store will not have is an adaptation to your customer base behavior. While machine learning is a tool that can bring these tools closer, if you are to shape the experience then some algorithm leadership has to take place with your full stack Web Developer (Magento Extension Developer, Plugin Developer, Shopify Developer, Shopify Expert). The key reason why you would explore your own Web App is to differentiate your store and gain a competitive advantage – providing a strong return on investment on the effort.
Custom Web development
The effort takes shape as a Shopify Custom App, or Shopify Private App, WordPress Plugin for your WooCommerce, a Custom Magento Extension, or custom module for your favorite eCommerce platform. With Node JS, a lot of the base algorythms are modularized and can fit any ecommerce website. Like all Web Development, the process of planning, implementation to deployment is like all software development processes. What will stand out is the planning process of how to utilize the algorithms with your customer experience and where do they deviate from standard off-the-shelf App Store apps.
Types of Algorithms
1. Customer Segmentation
While this is one of the oldest forms of data gathering, where organizing in groups of who is your clients, and what characteristics do they pose that would help you to influence the right product for the right client. Traditional marketing would segment with age bands, income bands, and gender. Online segmentation would categorize in originating IP address (location), Device-type (Mobile/iPad/Desktop), returning customer (vs. new client), purchase history, accumulated rewards, age value (length of time the customer has been returning), purchase value (how much they have spent) and many other factors. Also known as customer profiling, this base data feeds additional algorithms to which your store can take different approaches to communicate to a visitor.
2. Adaptive Search
With a regular search on your eCommerce store would focus on keywords entered, the adaptive search is based on learning gaming theory rules where the return of the search is a proposed list of items based on prior behavioral browsing and searching. This type of searching bridges what a customer might be looking for but isn’t the nest at expressing the keywords that would find the product they are looking for. Additionally, the search mechanism would employ machine learning to identify the correlation of products being looked for with the ones being purchased and therefore adapting to the words employed to the products that end up in a basket.
3. Product Recommendations
Given this is a pretty well-known App or feature in most stores, it still deserves an honorable mention. With similar traits to the Adaptive search algorithm, the Web Development community has matured this capability in its own category, where the integration in Web Themes is varied. Based on the above algorithms, products are lined up based on user-based “Other have also purchased” with the items in your basket or based on your purchase history recommend products that are suitable as “add-on” or suit the profile of that customer.
Web Development on basic algorithms
Before diving further into other algorithms, it is worth pointing out that the above-mentioned ones can be combined to create your very own type of recommendations. Do note that your Web Developer does not have to “write or code” these algorithms – they are already posted on the web as libraries. Therefore reusing is the approach, selecting the right one is the work of your developer that will reach the goal. If you have a complex product line, large inventory, high-spec products that have tolerances/material specifics, dependencies, or pre-requisites – this type of approach is suitable to consider for your online store. This is where the business salesmanship, processes, and client handling can influence the online experience in helping customers associate the needed products or services for their requirements with ease.
4. Product bundling and custom pricing
Where an algorithm sees the combination of certain products and can entice a client to include another related product to then create a bundled price. In regular sales this is an upsell path, however, with online purchasing, you have the knowledgebase of patterns to leverage from. One has to also see that this is a self-influencing algorithm since the enticement will reinforce the pattern. The Web Developer might employ a method to put the up-takes into a separate database schema so as not to affect the algorithm.
5. Inventory management
A lot goes into managing inventory these days, from drop-shipping, real-time dispatching, or just-in-time manufacturing to back-order management. Algorithms to predict when to re-order inventory, handle back-order notifications to customers, and connecting to 3PL (3rd Party Logistics) are all in today’s eCommerce toolset. It is a crucial toolset to manage cash flow and keeping inventory levels optimized to the demand, all the while keeping up with the “fast movers” of the business.
While this is an extension of the Segmentation Algorithm, capturing preferences and experience levels of a customer can enhance the experience all the while gathering additional information that can better assist in providing offers and incentives. Algorithms in this category can enhance Customer Loyalty, visualization and interface options, notification options, and how to best work with a customer. This can lend itself to loyalty plans based on purchase volume providing bigger discounts as well as perks. It can also lead to purchasing schemes for bonus-based promotions. A Web Developer can combine various algorithms to achieve a differentiated offering and experience.
Your business model can apply various combinations of these various base algorithms with variation and different rules and applications such that your Web Developer can then package your methods to your store. While standard Apps in your App Store provide the basic capabilities, a unique experience can be provided by applying your industry, your product types, and desired experience in a unique way that will enhance loyalty and customer value. If you would like to explore the various possibilities, feel free to reach out to us at email@example.com - we have the development knowhow, Shopify Experts/Shopify Development, Magento Extension, and WooCommerce Plugin development at your disposal for a consultation.