As the retail market evolves, eCommerce businesses need to scale their digital commerce platforms along with the rest of the sector. Businesses need to provide leading customer satisfaction practices in a number of key ways. It’s either that—adapt—or risk getting relegated to the has-beens that were not able to adapt. I sat down with Bernadette Nixon, CEO of Algolia to discuss how their partnership with Walgreens helped modernize its search and discovery technology giving a boost to eCommerce.
Gary Drenik. What are the emerging trends in shopping behaviors that retailers need to be prepared for?
Bernadette Nixon: The largest trend we are seeing is the emergence of the hybrid shopper. The pandemic sparked retailers to find new ways to market and deliver their products to consumers out of necessity, as the in-store experience needed to be limited. More shoppers embraced channels like mobile. In fact, a recent Prosper Insights & Analytics survey shows that 58% of consumers are browsing or looking for a product/service on their phones. With brick-and-mortar locations now fully operational, these online and mobile shopping habits aren’t going away, but they are melding with the in-store experience.
The concept of bridging the gap between the digital world and the physical world has earned the term “Hybrid Retail” and even “phygital” by many. It’s a Hybrid Retail shopping experience that consumers now seek. Consumers want their shopping experience to be seamless across all channels now. They might discover a product online, go to a store to see it in-person and then use their phone to see if there are other variations of the product available (different colors, sizes, etc.) before ordering it to be shipped to their home.
When all applicable channels are available to consumers, consistently branded, and well connected with each other in order to give people a shopping experience that feels satisfyingly holistic, that’s a win – and can be a major advantage over online-only retailers.
Drenik: What role does modern search and discovery play in addressing these trends and creating an omnichannel shopping experience?
Nixon: Modern search and discovery consists of two parts: search implementation and search analytics. The implementation tools make it easier to create and maintain great search experiences for consumers. The analytics tools enable business teams to analyze the impact of experiences and refine as needed, so they can directly address evolving business objectives. So, what makes consumers come back to an online shopping website or mobile app? The user experience – and it starts with search, navigation, and product categories, and goes all the way to product recommendations.
Search and discovery tools are one of the key enabling technologies for creating strategies that address the Hybrid Retail trend. One example that has become commonplace is the “click-and-collect” offering, also referred to as Buy Online, Pick Up in Store (BOPIS). These offerings are so sophisticated, orders are typically ready within a couple of hours. This offering is only possible if the retailer has a strong search experience coupled with hyper-localization that can help the consumer easily find the items they want and in real-time offer items available at the most convenient local store for pick-up.
With omnichannel retailing it’s critical to connect all your channels and synchronize them using a central program or data management solution. In order to achieve this level of capability, the platform needs to have massive scalability for ingesting data of product, events, and inventory updates. This ensures that your customers have a consistent user experience no matter what channel they choose to shop through.
Drenik: Supply chain disruptions have been unavoidable for many companies; can modern search & discovery provide resiliency against this?
Nixon: Supply chain disruptions continue to be an issue for retailers. What used to be an industry term – “supply chain” – is now dinner conversation. For retailers, the resulting product shortages can create frustration for shoppers, but there are ways to mitigate this.
In many instances shoppers realize supply chain shortages are unavoidable, but what is avoidable is offering online shoppers products that have major delays or are indefinitely out-of-stock. With modern search and discovery platforms, merchandisers are able to prioritize in-stock and suitable alternative items instead. It’s about understanding the “intent” and presenting a solution to the problem at hand.
Localized search is also another strategy that has been particularly useful for helping shoppers navigate product shortages. Let’s say you are hosting a birthday party and you remember you need paper plates only hours before guests are going to arrive. Paper products have had notorious shortages. Instead of going to the store and taking your chances, retailers can provide localized search options, which essentially means providing transparency around exactly how many products are in stock and in what location. This would show that your local corner store might be out of paper plates, but the one that is only a mile further has plenty of stock.
Drenik: Why was the partnership between Algolia and Walgreens such a good fit?
Nixon: For Walgreens, Algolia is able to power these strategies discussed above for Walgreens – BOPIS, localized search, and a smoother Hybrid Retail shopping experience. One of Walgreens’ top advantages is its physical footprint, so being able to drive shoppers to collect essential items the same day is a huge advantage over next-day and two-day shipping.
The partnership also enables Walgreens the opportunity to create very specific, personalized experiences for consumers based not just from their own personal shopping history but trends in a region. In that same Prosper Insights & Analytics survey, 39% of consumers shopping on their phone said they are looking for a specific product in mind. While these consumers might go to a retailer’s app or site with a specific goal, there is opportunity to expand cart size – and present products that a shopper didn’t’ realize they needed until they saw it. For example, if you go to Walgreens website, there might be a trend of allergies in a shopper’s region. This would allow for very tailored recommendations of allergy medication, tissue boxes, etc. Seeing these items, a shopper might realize they need to stock up on these items. Creating recommendations based on macro level as well as personal profile and preferences can be a huge advantage. This will create a deeper level of loyalty and delivery of value that we see brands like Walgreens investing in.
On a technical level, the simplicity of deployment and time to value of Algolia was also a key reason Walgreens chose Algolia as its modern search solution. Algolia offers the only API-first search platform. This means that our search functionality is offered as a sort of software “building block” that can be integrated and built on top of for further customization. This saves an organization a ton of development time and allows them to rely on a future-proof solution since Algolia is fine-tuning and maintaining the complex backend that is required to enable modern search. Algolia was up-and-running within a single quarter. If Walgreens were to build out the same level of modern search and discovery features that Algolia provides on top of its previous platform, it may have taken up to 18 months, which would have resulted in over a year of missed incremental revenue opportunities.
Drenik: How will the eventual death of third-party cookies impact the search and discovery experience, and how can retailers prepare?
Nixon: There’s a couple of ways for retailers to approach this. One of the biggest things we’ll see is more reliance on being able to gather and use the data collated through loyalty programs for customized benefits – coupons, points, etc. This creates a mutually beneficial relationship that preserves the personalized shopping experience and recommendations that consumers rely on.
When it comes to search and discovery, we are co-innovating with customers the ability to use AI to discover user-intent in real-time, without the use of third-party cookies. This new way of showing intent works by analyzing shoppers’ actions, assigning those users to a segment in real time, and optimizing the experience accordingly. Stay tuned for more on this.
Technology will continue to play a major role in delivering superior user experiences. We are only just scratching the surface with AI/ML led capabilities. We are building for a future where we will have the ability to see several steps ahead in the customer journey. Today, we are able to provide a reasonably good, personalized experience. Where we want to go is to be able to factor in behavior and predict a user’s intention, in real time, for authenticated, non-authenticated, or even first-time (cold start) users.
Drenik: Thank you, Bernadette, for your insights into this partnership as well as what this means for the larger retail space. An understanding of the benefits of search and discovery was illuminating especially as retailers anticipate future omnichannel trends.