Prakash Gurumoorthy, VTEX: Empowering online retailers to attain their profitability objectives

In an exclusive interview with Prakash Gurumoorthy, General Manager of EMEA & APAC at VTEX, Business Review explores the impact of inflation on online stores and strategies to maintain profitability. Prakash discusses global e-commerce trends, the importance of an omnichannel approach for Romanian retailers, and the role of AI and Machine Learning in shaping the future of online shopping, offering valuable insights for businesses navigating economic challenges and digital transformation.

How has inflation affected online stores, and what are some key challenges they face in maintaining profitability in such a scenario?

In the current era, characterized by a focus on efficiency, the retail and digital commerce sectors are undergoing significant changes. The industry is facing various challenges, including inflation, a considerable 22% rise in retail inventory levels post-pandemic, shifts in consumer behavior (such as 83% of B2B buyers now favoring digital channels for shopping), and increased expenses for customer acquisition, to name several.

We have reached a critical juncture where leaders in the digital commerce industry must reassess their investments in digitalization to concentrate on areas that yield substantial returns: customer acquisition and loyalty, inventory optimization, and reducing technology maintenance expenses. We are immensely proud of delivering a comprehensive and flexible platform that significantly boosts sales efficiency, empowering merchants to exceed standard market growth and achieve extraordinary results.

In the face of rising costs due to inflation, what strategies or technological advancements can online stores employ to optimize their operations and minimize losses?

The commerce landscape has undergone a significant transformation, with retailers placing a strong emphasis on achieving profitability. A recent study conducted by Publicis Sapient reveals that 37% of retailers express dissatisfaction with the ability of ecommerce to meet their profitability goals.

Considering this, VTEX offers strategic recommendations to empower online retailers to attain their profitability objectives.

First, maximizing the value derived from the existing customer base is essential. The loyal customer segment plays a crucial role in driving a brand’s profits. Hence, investing in nurturing these relationships becomes paramount for growing profitability. Retailers aiming to excel in this area should prioritize customer retention, gather first-party data, and implement cross-channel communication strategies effectively.

Next, it is important for retailers to focus on leveraging inventory and fulfillment as a competitive advantage. VTEX research reveals that a significant 55% of brands are in the early stages of their omnichannel maturity. Retailers can elevate customer satisfaction levels by investing in this strategy, specifically in inventory management, order management, and supply chain optimization. These initiatives should revolve around treating fulfillment as a product, integrating inventory systems, and harnessing the potential of marketplace models.

Lastly, brands must adopt innovative approaches to engage with customers to thrive in the fiercely competitive digital commerce market. Simply relying on traditional customer experience tactics is no longer sufficient. Exploring avenues such as video commerce, Live Shopping, and immersive product pages is crucial. These strategies not only drive higher conversion rates but also allow brands to differentiate themselves from competitors in a crowded market. By embracing these novel approaches, brands can truly stand out and capture the attention of their target audience.

Could you share some global trends in the e-commerce industry that have proven effective in helping online stores thrive despite economic difficulties caused by inflation?

Ecommerce is changing at a rapid pace. It has witnessed significant transformations and advancements in recent years, driven by evolving consumer expectations, technological innovations, and market dynamics.

The omnichannel approach is the most dominant trend in digital commerce, more and more stores implementing this sales strategy. Omnichannel is transforming the way retailers interact with customers and operate their businesses. Therefore, we have developed VTEX Sales App which is the new omnichannel product accelerating the connection between digital sales and brick-and-mortar stores. The tool enables sales associates to leverage the full potential of the retailer’s physical and digital commerce operation, giving them access to inventory from all physical stores, distribution centers, partner sellers and suppliers, access to customers’ previous purchase data (from both online and physical stores), insights on abandoned carts, and providing visibility into customer behavior. With the app, the sales associates can provide better customer support, sell more, and increase basket size, giving the salesperson the upper hand in customer negotiations.

The automation of processes in the activity of a store and the fulfillment of customer expectations have led to the implementation of pick and pack solutions in more and more online stores. With a simple and intuitive mobile experience, VTEX Pick and Pack combines one app for store teams to pick and pack products and another for drivers to make deliveries. This tool makes it possible to perform order fulfillment tasks more quickly and efficiently. Additionally, the product is already connected with VTEX’s OMS (Order Management System), so the implementation is simple, without the need of any middleware or glue code.

At the same time, there is increased attention to optimizing the delivery process to end customers in the digital commerce market. Thus, to help online retailers, we recently launched the solution VTEX Shipping Network, which connects retailers with a network of carriers and better pricing. This new integration will automatically update the customer’s platform information, such as delivery status and tracking for each order, order labels, and shipping rate tables.

Finally, ensuring excellence in customer service is always an important focus in our industry. Live shopping is an emerging ecommerce trend involving real-time video streaming to showcase products and engage with customers. It provides a dynamic and interactive shopping experience by allowing customers to view product demonstrations, ask questions, and make purchases while watching a live video broadcast. Moreover, VTEX Personal Shopper allows retailers to increase sales and average tickets for their online orders. VTEX’s new app enables companies to offer exclusive one-to-one customer service through live-stream videos.

With the shift towards an omnichannel approach becoming increasingly important, how do you see Romanian online retailers adapting to this trend, and what benefits can they expect to gain from implementing it?

This year, omnichannel is gaining prominence as a crucial business approach in the local market, providing businesses with online operations with a solution to counter the negative effects of inflation. Specifically, there is notable interest in functionalities like Live Shopping, Reserve Online, Pickup In-Store, Buy Online, Pickup In-Store, and Return In-Store within the realm of omnichannel. By implementing omnichannel strategies, online stores can expand their presence across multiple channels, simultaneously diversifying revenue streams to mitigate the impact of rising costs. Additionally, leveraging data and analytics from diverse channels empowers businesses to optimize their marketing and advertising strategies, maintain agility, and swiftly adapt to ever-changing market conditions, ultimately emerging as stronger and more resilient entities.

In your experience, what specific technologies or tools have proven instrumental in helping online stores in Romania and beyond navigate the challenges posed by inflation and maintain a competitive edge in the market?

In a highly competitive market, the success and growth of retail businesses rely on technologies that streamline operations and enhance the shopping experience. For instance, in the grocery segment, simplifying the purchase process for customers’ preferred products and helping them to discover new offers, products, and categories is instrumental. This is why a strong promotional engine and advanced search capabilities are crucial. offers. Additionally, features like live shopping and subscriptions for recurring purchases have proven beneficial, as exemplified by their implementation in the Auchan.ro online store. These technologies play a pivotal role in facilitating scalability and ensuring the competitiveness of retail businesses.

Simultaneously, a significant trend in the Romanian market is the proliferation of marketplaces, with VTEX being chosen as the trusted partner for renowned platforms such as Elefant.ro, e-BricoShop.ro, and Infinity.ro. With a robust and efficient technology offering for the marketplace segment, there has been a surge in global demand for marketplace implementation, a growth trajectory witnessed at a comparable pace in Romania as well. Infinity experienced a remarkable 30% increase in sales through its partnership with VTEX, attributable to enhanced technological capabilities and optimized customer purchasing processes. Looking ahead, we anticipate the coming years to be marked by increased investments in the launch of marketplaces.

Furthermore, there is a growing interest in establishing online stores within the B2B segment, exemplified by Macromex partnering with VTEX to launch one of the largest B2B online stores. Romania aligns with the global trend where numerous companies engaged in selling products or services to other businesses are embracing the potential of online sales. Companies aspire to streamline their ordering process, enabling them to place orders with ease, just a few clicks away, and receive products promptly, in contrast to traditional telephone orders. This shift in demand has catalyzed the emergence and development of B2B online stores, catering specifically to this segment.

How much can digital commerce leverage AI? Will it change the way we shop online?

AI and Machine Learning (ML) technologies have been present in ecommerce for a while, and we have been using them in different areas, allowing online stores to adapt to the challenges of today.

One of the key benefits of these technologies is the ability to personalize the shopping experience for each individual customer, to increase customer loyalty and help retailers optimize their inventory and pricing strategies. Also, it plays a critical role in inventory management, as the algorithms can predict demand and optimize the portfolio of products.

At the same time, A.I. can be very helpful in fraud detection, as it can detect patterns of suspicious transactions and flag them for further investigation. AI can also be used to improve customer service, by analyzing data on customer behaviour and interactions with retailer’s customer service. Using AI and ML solutions, we provide retailers with powerful tools for overcoming their challenges, which are part of a more complex ecosystem of services, marketing solutions, and cutting-edge technology. All of that contributes to the growth of any business.

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