How AI in eCommerce helped drive this year’s Black Friday sales

The AI revolution isn’t as new to eCommerce as it may seem, and unlike many of its other potential applications, there is no speculation over its effectiveness. Google itself is an AI engine, and many eCommerce brands are built on Google’s success.

AI is driven by data. The better the data, the better the results it can give. We’ve all heard of ChatGPT and its problematic relationship with fake news – but what should we expect from an AI that is trained on data gathered from the entire internet, dark corners and all?

In eCommerce, where margins are small, you have to be able to trust that your tools are using good data and providing strong returns. Get it right, and AI has the power to process, analyse and action billions of data points from across your business and Google Shopping – work that would be impossible for human teams to do well.

Practically, this could free up your marketing team to focus on long term strategy, whilst your AI tools work away in the background, predicting and analysing trends, and optimising thousands of items in real time 24/7. 

This part-automated, human/AI hybrid team has demonstrated the potential to create a new way of working within eCommerce that can benefit a sector that is overwhelmed with ever-increasing competition and innovations. And no more so than during last Black Friday.

The problem with Black Friday

UK retailers might argue there are many problems with any Black Friday. But it’s the combination of increased competition and fickle buying trends, coupled with the pressure to always perform, that make it difficult for any retailer to implement effectively.

The sheer volume of products available during this period is impossible to optimise at SKU-level, leaving managers to turn to guesswork, averages, and ‘gut feel.’ Plus the playing field is effectively levelled by the fact that everyone is doing the same thing with the same tools. Tools that are, when it comes down to it, designed to make Google money – not you.

There is no science to it, no formulas to follow, no time to give it the intelligent thought it needs.

But now we do have access to something different, something with the intelligence that gave some retailers the much needed edge. An AI tool fed with effective, relevant data had the power to transform the way marketing teams performed on Black Friday.

How does AI in eCommerce boost your marketing team?

There are many advantages to using AI in eCommerce. It:

• has scale. AI has the ability to make 1000s of individual optimisations simultaneously and in real time.
• never sleeps. AI is ‘always on’, quietly plugging away optimising SKU after SKU whilst your (less stressed) PPC managers are sleeping. 
• keeps getting smarter. The more data you feed it, the more it learns, and the smarter it gets. 
• works for you, not Google. If you’re feeding it with your data, its goal becomes your products, your revenue, your ROAS, your profits – not Google’s. 

Why retailers using AI in eCommerce won this year’s Black Friday sales

AI has the ability to react instantly to trends and changes in consumer demand by adjusting campaigns in real time. But what does that really mean? Let’s look at a theoretical example. 

We know that Barbie is a hot trend for Christmas. But do you know what your margins are for Barbie products if there’s a bidding war and their cost per click (CPC) goes through the roof? Whilst your AI will instantly move all of the Barbie items you have in stock into the ‘most likely to sell’ campaign ahead of this likely trend – it will also move them straight out again if you’ve programmed it to protect your profits, rather than plough on by bidding for potentially loss-making revenue.

Also, when the Barbie bubble inevitably bursts, and Furbies are the next big thing (again), the AI will notice and push Barbie back down into a, let’s say, ‘Less likely to sell’ campaign. It will lower the bids on Barbie slightly, and at the same time move any Furbies you have in stock up to cover the space that, approx. 120 seconds ago, had once been Barbies.

And so it continues, predicting and actioning trends and optimising products in real time. 

What does this mean in the real world? Watch Arran Roberts, Head of eCommerce and Digital Marketing, at Abakhan describe his “best ever” Black Friday, with the help of Upp’s AI platform support. 

Stop wasting money on ads that don’t perform

Over 40% of retailer’s ad spend leads to 0% revenue. It’s a surprisingly high figure. And it needn’t be. Using an AI tool like Upp.AI would ensure all your advertising budget is funnelled into the products that will give you a return, not the ones that no-one’s buying or that you’re out of stock on.

Unlock peak-profit in every item

When it comes to products, performance doesn’t necessarily lead to profit. AI will help calculate the peak profit in every single item in your inventory, using contribution margin ratio to calculate profit. Not performance-based click through rates and conversions. 

Is it worth using AI in eCommerce to tackle Black Friday?

You can be as prepared as you like for Black Friday, but no-one ever knows exactly what’s going to sell, when it will sell and how quickly it will sell. And marketing teams are only as good as the data they can access, which is often historical and generalised to a point.

The genius of AI is that it’s always one step ahead. It sees all and knows all – and can respond in a flash (within the guardrails you give it). So instead of wasting time analysing and reporting you can sit back and trust that your AI tool is capturing every drop of consumer demand, has your products, budget and profits as its primary interest, not Google’s, and is working at an unprecedented scale and speed, 24/7 to get you the results you need. 

Whilst the AI is data crunching and optimising, your marketing team is freed up to focus on making human connections with consumers that increase brand loyalty, how products look and are displayed, and have space to think strategically and meaningfully about the long-term plan. 

The future of effective, profitable eCommerce is your team plus your AI, working together to reach peak-profit in every item you sell – even on Black Friday. That’s what we would call a winning team.