What is Ecommerce Automation? How it Works & Benefits

The global ecommerce industry is expected to grow by 8.9% in 2023 and 9.4% by 2024. 

Similar forecasts suggest that Amazon’s ecommerce store sales are projected to reach $1.2 trillion by 2026, and social commerce will hit $2.9 trillion in the same year. 

Considering these numbers, businesses are now looking to optimize their ecommerce tools, one of which that we cannot overlook is “ecommerce automation”.  

So what does ecommerce automation mean? And how does it work? This guide will provide a comprehensive explanation and explore its different areas.

🔎 Need More Insight? Check out 71 Ecommerce Statistics & Trends You Need To Know for 2023

What is Ecommerce Automation?

Ecommerce automation is the integration of technology and software solutions to automate tasks and processes within online platforms. 

It is applied to various repetitive daily tasks such as inventory management, order tracking, and cold emailing prospects.

Some common examples are:

1. Abandoned Cart Emails

Remember when we added our dream items to the cart, left them there for a week, then got an email that said something along the lines of "Your cart misses you, come back" or "You forgot something (it’s the shoes you added to the cart but never bought)"?

Those are known as abandoned cart emails. 

Simply put, they are automated emails sent to abandoned cart owners, convincing them to return and complete the purchase. This technique can recover up to 14% of lost sales from cart abandoners. 

2. Automated Inventory Management 

Let’s say a highly anticipated collection of Adidas shoes has just been launched, and everyone is waiting to order it online this midnight.

How can Adidas' online store ensure it does not sell more shoes than it has in stock? 

To address this, it displays the real-time availability of the products on the product page and uses automation to control the entire purchasing process. 

That is one aspect of automated inventory management.

Automated inventory management is a unified system that tracks and controls real-time inventory data, synchronizes promotions and predicts future demand and supply. It enables businesses to make well-informed decisions concerning reordering and stock control. 

Moreover, it can be tailored to the unique requirements of each business, from a small ecommerce store to large warehouses.

3. Automated Order Tracking and Shipping Notifications

Automated order tracking and shipping notifications are processes that help keep customers informed about the status of their orders, especially the delivery status and estimated time of arrival (ETA). 

As a result, it reduces the number of inquiries and enhances the customer journey.

Pros and Cons of Ecommerce Automation

Before diving deeper, let’s cover the advantages and disadvantages of automated systems so you can figure out if the strategy fits your business goals.

How Ecommerce Automation Can Benefit Your Business

Let’s take a closer look at how the advantages benefit your business.

Reduced Time and Errors 

Automation reduces time spent on data tasks such as entering, sorting, analyzing, and reporting data. 

At the same time, it prevents data duplication and ensures consistency across platforms, enabling more accurate work outcomes in less time.

Enhanced Customer Experience

Ecommerce automation synchronizes real-time inventory levels and order statuses across channels. 

Simultaneously, it analyzes customers’ orders to adjust prices, offers applicable discounts, and finds the best shipping methods. This results in a faster and smoother experience for browsing and purchasing.

Besides, automated chatbots offer quicker response times, which is beneficial for any online business. After all, 80% of customers prefer a faster service.

Automated systems are also used to segment customers based on behavior and data, leading to a more personalized experience, such as product recommendations based on purchase history, ads display based on their interests, and autofill shipping information. 

Those mean a better customer experience and 73% of customers said customer experience drives purchasing decisions.

Better Decisions

Ecommerce automation tools implement data-driven decisions, such as notifying when to restock based on up-to-date inventory data, suggesting services based on a customer's browsing history, sending personalized emails based on customer segmentation, automating retargeting ads, and detecting fraud to ensure secure transactions.

Thus, they help ecommerce businesses make smarter and faster decisions that boost growth and profitability.

Increased Efficiency and Productivity

No matter how competent humans are, we just can’t send 1,000 emails in a day.

Repetitive tasks waste a valuable workforce. By letting automation delegate these tasks, businesses can free up human resources to focus on higher-value work, increasing productivity and profitability.

For instance, periodic promotion emails can be sent through automated emails, or common FAQs can be handled by chatbots, allowing humans to concentrate on building relationships and solving other unique customer problems.
🔎 Insight: A Salesforce survey showed that 74% of automation users saved time and worked faster, while 79% increased their productivity.

5 Types of Ecommerce Automation

There are various ecommerce automation types, and here are five of the most common ones. 

Inventory Management Automation

Inventory management automation tracks, controls, and forecasts inventory using ecommerce automation software and technology.

It updates orders across different channels, autogenerates shipping labels, creates and sends orders to suppliers based on inventory levels, tracks the location where the item is stored, analyzes how they should be shipped, how fast they sell, and when to reorder, and predicts future demand based on sales trends and historical data.

Its time-efficient characteristic helps to avoid understocking, overstocking, and lost sales. 

Some well-known inventory management automation tools include

• Magento - An ecommerce platform with multiple PHP frameworks that allows inventory management across multiple channels.
• Klaviyo - An email and SMS marketing tool that facilitates sending tailored automated messages based on inventory status.

H3 - Automated Order Tracking and Shipping Notifications

Automated order tracking and shipping notifications keep customers informed about their orders' status and deliveries. It reduces customer inquiries, increases trust and convenience, and encourages repeat purchases. 

It also tracks shipping performance and issues for future optimization.

Some well-known automated order tracking and shipping notification tools are 

• AfterShip - An email and SMS delivery status notifier that works with various carriers and can be used with major online shopping platforms like eBay, Shopify, and Bigcommerce.
• Wonderment - An order tracking tool that offers customizable messages, issue detection features, and direct integration with other popular platforms like Shopify, Klaviyo, etc.  

🔎 Insight: Forbes highlights that consumers check their tracking information 4-5 times per day on average, and offering self-service delivery status can cut support volume by over 50%.

Cart Abandonment Recovery

Cart abandonment is when a customer adds items to their shopping cart but leaves without completing their purchase. 

An abandoned cart could result from high shipping costs, unexpected fees at checkout, a complicated payment gateway, longer estimated delivery time, a lack of trust, or distraction.

If you’re a seller, that means lost sales.

Cart abandonment recovery automation is the process to regain those lost sales by sending timely and relevant messages to customers, reminding them of what they left behind, offering promotions, or providing assistance. 

💡 Tip: Want to reduce abandoned carts and increase sales? Follow our guide on how to improve ecommerce checkout 

Customer Relationship Management (CRM) Automation

Customer relationship management (CRM) automation is the process that manages interactions with customers throughout their cycle, streamlining supports and sales functions. 

CRM aims to build customer loyalty, nurture relationships with existing customers, and engage with new ones.

CRM automation is used for repetitive yet essential tasks such as sending reminders, sending emails, tracking responses, and segmenting lists based on behaviour, preferences, and value.

Some well-known CRM automation tools include:

• Hubspot - A CRM platform that connects marketing, sales, content management, and customer service through software and integration
• ActiveCampaign - A CRM marketing tool that sends targeted emails based on customer segments, integrating with 800+ apps

Marketing Automation

Marketing automation is a tool for routine marketing campaigns across different channels, such as email, social media, websites, and mobiles.

This includes prospect nurturing emails, automatic upselling emails, social media schedule posts, PPC (pay-per-click) campaigns, etc.

It is intended to reach the target audience, deliver scheduled content, A/B testing marketing strategies, increase ROI, and measure results.

Examples of marketing automation tools are

• Mailchimp - An email marketing automation tool that helps create, manage, send, and measure marketing emails.
• Sendgrid - A cloud-based email delivery service that sends marketing and automatic transactional emails.

🔎 Insight: According to a report from ResearchGate, marketing automation helps 39% of users improve their lead quality, more than one-third of them generate more leads or conversions, and 45% of them increase their return on investment (ROI).

How does Ecommerce Automation Work?

Trigger

A trigger is an event that starts the automation process and sets the flow in motion. 

For example:

• Registration: A customer signing up for the first time triggers an onboarding email automation process to start.
• Subscription: A click on a newsletter subscription button triggers an email marketing automation process to start.
• Specific intervals: A date is reached that requires renewing a subscription triggers an invoice to be sent, or a customer’s birthday triggers a birthday promotion email to be sent. 
• Cancellation: The customer ending a subscription to products or services triggers the termination of other automation flows.

First-hand Experience from Industry Expert

“Email automation has been critical in helping us grow our customer base and revenue as an ecommerce business. Our selected email automation tool streamlines and personalizes all of our email marketing campaigns, resulting in a much richer experience for our leads and customers” - Lisa Richards - CEO of Candida Diet

Condition

Condition is a set of prerequisites for specific stages of automated workflows.

Think of it as a set of automation rules. It determines when and what actions should be triggered.

Condition is customizable, such as sending a message or including someone in a list according to certain criteria.

For example:

• Personalized onboarding emails: Different onboarding emails are sent to customers based on their demographic.
• Discount and benefits application: Automatically sends a 5% discount coupon when a customer spends more than $200 and a 10% discount coupon plus free shipping when a customer spends more than $400.
• Customer segmentation: Tagging users as high-value customers when they spend over a certain amount.
• Abandoned cart recovery: A cart abandonment email is automatically sent after the customer leaves the item in their cart for 7 days.
• Feedback inquiries: Automatically send an email asking for feedback after 30 days of delivery of products.
• Follow-up email: Send a reminder email to the recipients who have not opened a previous email for a predetermined period. This could be used to prevent and pursue overdue payments.
• Promotions: Offer a time-limited promotion via email or message when there is no purchase following specific numbers of marketing emails. Or birthday promotion emails are only sent to customers who have opted in for marketing emails.

Action

Action refers to tasks or activities that can be performed automatically as part of a workflow.

It happens after the trigger or the condition is set. 

Apart from actions seen in the trigger and condition above, there are other types of action, for example, 

• Assigning lead: A CRM automation tool automatically flags a sales representation when a prospect opens an email. 
• Updating database: A tool automatically scarp details from the submission form and put it in a predetermined record.

First-hand Experience from Industry Experts

“AI-CRM software aggregates and analyzes customer data from ecommerce activities related to sales, emails, and social media. This allows you to track behavior patterns within your target audience, enabling you to tailor-make a unique persona.” - Jas Banwait Gill - Growth Manager of SwagMagic

Ecommerce Automation Best Practices

When done properly, automating mundane tasks saves time, money, and resources. On the other hand, overdoing automation can lead to missed feedback and innovation. 

Let’s examine some best practices to fully benefit from ecommerce automation tools.

1. Identify Which Tasks to Automate

Not every task has to be done automatically.

To determine which task is most suitable for automation, look for these conditions: 

• It is a routine: Repetitive tasks drain productivity and creativity. If they don’t require any innovation or skill, delegate them to software and tools instead.
• It takes many people on one process: Since miscommunication may delay and complicate things along the way, implementing automation may make the process faster and more reliable.
• It involves several platforms: Transferring and sharing information across systems can lead to loss of details, and using automation can avoid that trouble. 
• The task is prone to errors: For instance, tasks with huge data sets, complex calculations, and multiple manual processes.

Common tasks that you can apply automation to include 

• Segmenting leads by products, interests, and sales stages.
• Sending personalized emails, web pages, and ads to the user.
• Online advertising, retargeting (SEA), and social media posts (SMM).
• Data entry and digital file management.
• Notification management.

2. Choose the Right Automation Tools for Your Business

• Understand your business model and workflow: List detailed operations, factors impacting them, and measurement methods. By mapping out your workflow, you can identify which areas need automation and which don't.
• Determine your budgets: What’s the budget for automation tools? What features and benefits do you expect from this allocation? How do their costs compare to manual labour expenses and the risk of human errors?
• Scalability factor: Whether you’re starting big or small, chances are your online store will grow. Choose a tool with room for this growth as changing it later can be troublesome. 
• Compare: There are plenty of tools out there in the market. It’s best to compare different tools based on their features, price, customer support, integrations, and reviews.

3. Train Employees on New Processes

Tools and users have a symbiotic relationship: they benefit from each other when used correctly.

That is why training employees to maximize the potential of automation tools is as important as any other process. 

There are different ways to do this, such as holding a session or creating an online repository where employees can access training materials at their own pace.

4. Test and Refine Your Automated System

It’s crucial to ensure that automation works correctly, produces desired results, and doesn't eliminate too much of the human touch. 

Human oversight, monitoring automated processes regularly, and making adjustments are still necessary.

Bottom Line

Ecommerce automation uses software and technology to automate repetitive manual tasks in your online commerce store, such as order fulfillment, inventory management, customer service, marketing campaigns, data analysis, and more. 

When done right, It can help you save time, increase efficiency and accuracy, and boost productivity and customer satisfaction.