The use of artificial intelligence, a pillar of the development of online commerce

The development of online commerce is closely related to artificial intelligence, better said to its use on new platforms and for the modeling of new applications characteristic of each type of consumer/client, stated the participants at the "European Digital Commerce Summit 2024", an event organized yesterday, in Bucharest, by the VTEX company.

In the opening of the debates, Prakash Gurumoorthy, general manager of VTEX EMEA&APAC, said: "In the last two years, online trade has grown steadily, the number of companies using the platforms we provide is increasing, as well as the number of customers, but there are too few which asks us what are the challenges we face. Solid companies claim that each customer or each plan is worth a billion euros with which 65 applications can be made. 10% of global companies have revenues of several hundred billion dollars and have more than 3000 applications. So what did they do for trade promotion, what did they do to sell online? And how did they do this without raising prices? Especially since 33% of companies face monthly expenses such as rents, car purchases, staff hires, interest payments and installments for bank loans taken. (...) How do they become profitable? By developing the dialogue with partners, customers and consumers, by multiplying the catalogs offered, by integrating some processes and mechanisms within the activity, by the databases made available and by increasing the portfolio for partners. Our vision for the development of online commerce is focused on five ideas that consider the use of artificial intelligence, databases, interaction, communication and build smart, based on an initial model, combined with 3-4 hybrid types. Our vision is based on using AI to answer the challenges of databases, their interconnection, prioritization of orders, integration of new customers, etc. That's why we are considering the creation of faststore applications for B2B and B2C relationships, but also an application that will replicate the usual sales processes and reduce friction in the case of the entry of new products into this commercial chain. During this time we are also thinking about increasing mobility, an increase that will also be achieved through AI through another pick and pack application that we will offer to our customers".

• Development of online commerce proven by Black Friday sales

The development of online commerce can be observed very well during events like Black Friday, when orders sent by customers on the Internet increase double-digit during that period, say representatives of companies that use digital platforms for the sale of products from the portfolio.

Raul Filip, deputy general manager of the Altex company, said: "Black Friday is a shopping event that has created a lot of excitement over time, but also a lot of controversy. This year's edition is a good one, with more customers on the online side compared to previous years, where we saw a higher increase in orders and sales than in brick-and-mortar stores, well beyond our expectations. We tried with the help of technology to create the same offer and for the customer to have the same experience online as in the store, that is, to have access to all assortments, at the same prices and services".

Rodica Bulăceanu, commercial manager at Humana People to People, said that Black Friday had very good results including in the fashion industry, where online was the most used purchase tool, although the Humana company is not yet present in this environment.

Rodica Bulăceanu stated: "We notice that during Black Friday there is a tendency to purchase via mobile phone - 80% of purchases were made during this period via the respective device, and in the fashion industry sales increased by 15% compared with the same period last year. Even we, who are not yet active in online commerce, recorded sales on Black Friday with 17% more than the same event held in 2023. That increase comes in the context in which 2024 was a difficult year for the fashion industry, due to increasing competitiveness with products on Chinese platforms, and staying offline, i.e. selling under these conditions only in physical stores, is a real challenge. We prospect and analyze the entry into the online environment, but for our business sustainability is a basic value. Moving our business online poses some challenges due to the fact that most of our items are unique pieces, but we are not ruling this out because we see what is happening with stores that sell vintage-pieces online.

• Sorting and delivering boxes, a problem for courier companies in Romania

One of the companies with intense activity during this period, through the lens of the delivery of products purchased online, is Poşta Română, which annually between October and January registers an increase in volumes delivered to customers. Valentin Ştefan, the general director of the Romanian National Post Company, said: "At the Romanian Post, most of the volumes for our customers come from outside the country and then Black Friday in Romania does not always coincide with Black Friday in the countries of origin of the respective goods, reason for that we did not feel this period as if it were a peak. In general, the peak period at Romanian Post is from October to the end of January. E-commerce in Romania has a Black Friday period for a week, and courier companies have this Black Friday for 3 months. The main customer for us that changes volumes is E-mag and during this period we feel growth, only our relationship with this company is on certain types of products. It is about bulky, heavier products that do not fit into easy-box or other delivery methods. It's always more expensive to ship a box of diapers or dog food than it is to ship a cell phone. So the delivery of the mobile phone is done by another company, while the Romanian Post is chosen to deliver the diapers. We don't mind that, we just see an increase in delivery of these products on Black Friday."

His Lordship specified that the Romanian Post is not a courier company, especially since only 5% of the state company's turnover is represented by the delivery of goods.

However, Valentin Ştefan mentioned: "But in the long term we don't want to neglect the courier activity and we even want to expand into neighboring countries, and that's why by the end of next year we want to create the necessary infrastructure. In Romania, parcels from outside the country cannot be brought in large volumes, because the Romanian Customs Authority has a processing capacity of a maximum of 15,000 parcels per day, in the situation where between 500,000 and 800,000 parcels arrive daily from outside the European community, which are directed to Hungary or other neighboring countries. That is why we want to solve this problem that the state has and we are not necessarily interested in taking over these volumes ourselves, but in creating the necessary infrastructure so that hundreds of thousands of parcels are processed and cleared in Romania. For this purpose we invest in sorting centers and in software that allows us to do this. Even the high-quality courier companies in our country do not have a large sorting capacity, with the exception of Sameday, which has a processing capacity of between 60,000 and 70,000 parcels. The other companies each have a maximum capacity of between 20,000 and 25,000 parcels. So we want to build that kind of capacity, with big partners in China, and then put the necessary pressure and support on AVR to participate in this transformation."

• The VAT increase could be reduce e-commerce activity

Răzvan Afenduli, managing partner at the company Xpert Beauty Romania, said that the company he leads recorded this year on Black Friday an increase of 20% compared to the same period in 2023, with a greater increase in online trade than in retail traditional.

"The results are still being processed to be able to know what was the motivation of the customers who made more purchases on Black Friday this year. One reason could be the concern about price increases starting next year when new fiscal measures are expected to balance the public budget, another could be the fear of rising inflation, and that is why they preferred to buy now what they could no longer buy in 2025 or in 2026. With us, 90% of customers do their online documentation regarding the products they want to purchase", said Răzvan Afenduli.

Asked what the factors would be that will mark the activity in the field of online trade next year, the representatives of the companies mentioned the geopolitical context, the economic situation of Romania, the fiscal measures that the future government will take to balance the state budget. Businessmen point out that an increase in VAT will lead to an increase in prices and a decrease in the purchasing power of citizens, despite wage increases, and that it is preferable for the future government to make a drastic adjustment of budget expenditure and personnel in local, county and central public administration.

Regarding the opportunities for e-commerce, entrepreneurs in the field claim that new technologies and applications made with artificial intelligence will aim to reduce the operational costs of companies and facilitate interaction with customers, as well as the promotion of according to the characteristics of each client.