CEO Jamie Iannone said in addition to delivering “solid results,” eBay has accelerated its innovation pace. Notably, that refers at least in part to eBay’s generative AI technology.

EBay ranks No. 6 in Digital Commerce 360’s Global Online Marketplaces database. The database ranks the 100 largest such marketplaces by 2023 third-party GMV. Digital Commerce 360’s 2023 Global Online Marketplaces Report includes key insights into the biggest players in the database.

EBay had a rough year in 2022, with GMV falling 15.4% compared to 2021, said James Risley, research data manager and senior analyst at Digital Commerce 360. In 2020, when supply chains “got far out of whack,” he said, eBay and other pure marketplaces saw a “huge surge” as shoppers turned to alternate channels and some people bought up popular products to resell on these giant marketplaces.

“This quarter, it remained flat over last year’s Q3 as GMV returns to the level it likely would have been at without a pandemic,” Risley said. “Stronger supply chains coupled with retailers adding on new marketplaces to their ecommerce operations have forced eBay to find ways to increase revenue without GMV increases, and they seem to have done that.”

eBay revenue and gross merchandise value (GMV)

In its fiscal third quarter, eBay revenue grew 5% year over year. That’s up to $2.5 billion from $2.38 billion in Q3 2022.

Meanwhile, eBay GMV grew 2% year over year. It reached $17.99 billion in Q3. That’s slightly less than eBay GMV in Q2, which was $18.21 billion, but it’s greater than GMV in Q3 2022, which was $17.72 billion. In the United States, eBay GMV declined slightly to $8.64 billion. That’s down 1% from about $8.70 billion in Q3 2022. EBay defines GMV as the total value of all paid transactions between users on its platforms during the applicable period, including shipping fees and taxes.

EBay active buyers decreased 3%, to 132 million in Q3 from 135 million in the comparable period of 2022. The marketplace identifies active buyers as those who paid for a transaction on its platforms within the previous 12-month period.

eBay generative AI technology updates

Iannone said the Magical Listing tool, which uses artificial intelligence to help sellers, rolled out to 100% of mobile app users in the United States, United Kingdom and Germany in eBay’s fiscal Q3. In October, eBay extended generative AI descriptions to 50% of desktop users in the same three countries, he said.

The Magical Listing tool makes it simple and fast to list items, he said. It also helps ensure listing are comprehensive to maximize sales, he said. As part of the Magical Listing experience, eBay has rolled out an improved background removal tool powered by AI, he added.

“Now, generative AI allows us to leverage our treasure trove of images and listing data to quickly create compelling listings,” Iannone said. “Early users have told us these capabilities will unlock more of the inventory in their closets and garages, which could ultimately keep more products out of landfills.”

The first phase of the Magical Listing process “leverages generative AI to instantly populate the item description within the listing flow based on a product’s title, category and other aspects,” he said.

EBay’s camera-based Magical Listing tool has been in employee beta for several months, Iannone added. It is also currently in a limited beta with a number of large sellers.

eBay earnings summary

For the fiscal third quarter ended Sept. 30, eBay Inc. reported:

• $2.5 billion in revenue. That’s up 5% from $2.38 billion in the year-ago period.
• eBay GMV increased to $17.99 billion. That’s a 2% year-over-year increase from $17.72 billion. However, eBay GMV in Q3 decreased from Q2’s 418.21 billion.
• eBay active buyers decreased 3% year over year to 132 million.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s eBay update.

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It’s No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by 2023 third-party GMV.

“We already have made these investments, technologies,” Witcher said, speaking from Amazon’s perspective. “How do we create incremental revenue by applying those sunk costs to new opportunities for others to take advantage of those costs where we can benefit in a financial way? This has been part of Amazon’s strategy for quite a while.”

Andy Jassy, Amazon’s CEO, spoke about different SaaS initiatives on a recent earnings call with investors for its fiscal third quarter ended Sept. 30, 2023.

Amazon’s fastest-growing sectors are ads and seller services, said James Risley, research data manager and senior analyst at Digital Commerce 360.

It shows that “while Amazon’s online stores are still growing well, its third-party sellers are the real growth leaders for the company,” Risley said. “Online stores only grew 2.0% in the first half of the year, though, and grew 7.0% in Q3, so the momentum is strong for first-party sales as Amazon potentially shifts its focus ahead of government pressure and a more savvy consumer who prefers direct relationships with sellers.”

Supply Chain by Amazon changes the fulfillment game

Two key Amazon software-as-a-service programs Jassy addressed were Supply Chain by Amazon and a growing generative AI initiative. New Amazon generative AI technology gives merchants the ability to create web pages and product imagery “with nearly endless flexibility,” calling it, along with Supply Chain by Amazon and AWS “the democratization of technology.”

Jassy said the company has seen “very positive early response from sellers to Supply Chain by Amazon.”

Supply Chain by Amazon is a fully automated set of services in which the mass merchant handles:

• Inventory pickup
• Shipping
• Customs clearance
• Ground transportation
• Inventory storage
• Replenishment

Amazon has been making “huge investments” in supply chain for more than a decade, Witcher said. The idea was that Amazon would eventually reach scale and those investments would pay off, he added.

“I think you’re starting to see that now, particularly because they’re starting to outsource delivery as a service,” Witcher said.

Amazon already has the infrastructure in place, so these are sunk costs, he said.

Amazon software as a service (SaaS) can change the game for third-party sellers

“Generative AI developments should be given more weight than Amazon let on,” Witcher said. “Using this innovative technology really gives Amazon the operational efficiencies in inventory planning and route planning that they need to realize the ROI of all these investments they made in supply chain.”

Witcher said AWS was the proof of concept that Amazon can create incremental revenue from its existing services and offerings. He said Fulfilled by Amazon (FBA) “clearly” works for a lot of sellers.

“Now, Amazon’s removing the pain points of being a small-business seller,” Witcher said. “Nobody gets into the retail business saying, ‘I can’t wait to build web pages’ or do photoshoots. That’s not why they get into selling products. They want to sell products. Amazon understands this, and so they’re using this in a way to make it easier for third-party sellers to have that Amazon relationship and make more reasons to say why they should have the Amazon relationship. I think that’s really what this comes right down to.”

Generative AI technology and the Amazon ecosystem

Witcher said Amazon understands that mom-and-pop shops and small companies don’t necessarily have the time or skill set to generate web pages and product imagery.

“The ability to use generative AI just helps those sellers,” Witcher said. “There’s a compounding effect to this, which is: The easier it is for me to build websites, the easier it is for me to upload product pages. Then, it’s easier for me to sell on Amazon. Well, if I’m already selling on Amazon, then it’s easier for me to give Amazon my supply chain, pay for them to do my supply chain, pay for them to have Amazon Pay on my website. It just bakes you deeper into the ecosystem of Amazon as you start to find value in the things Amazon offers.”

He added that this is “certainly a differentiator” for Amazon compared with other marketplaces. However, he said, he expects other retailers to follow suit.

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It’s the kind of broad-based growth projections that launched the mid-1990s ecommerce pioneer with a bevy of entrepreneurial sellers.

Michelle Warvel, vice president of product and seller experience, eBay Inc.

No wonder, then, eBay is out to prod ongoing growth with an array of new selling tools for today’s generation of sellers, including fast-growing small and midsized businesses that cater to what eBay calls “enthusiast buyers” of unique items ranging from sneakers and baseball trading cards to luxury handbags.

“We’re really focused on, how do we meet the needs of these enthusiast buyers,” says Michelle Warvel, vice president of product, seller experience. She notes that such buyers account for about 70% of eBay’s annual gross merchandise volume sold on its marketplace.

“We’re thinking about our sellers’ experiences: how do we build tools for our sellers so that when they list a sneaker, or they list a luxury handbag, we’re giving them the right guidance so that they are meeting their buyers where they are.”

The new eBay toolset covers:

• AI-generated content in “magical listings,” which eBay says has resulted in longer, more detailed product descriptions designed to help sellers move more unusual items.
• Automated online offers that sellers send to customers through eBay’s M2M messaging platform to alert shoppers to lower prices or other product offers designed to spark sales in otherwise inactive or “stale” product listings.
• Managing “shoppable posts” on multiple social channels like Instagram and Facebook.”
• eBay Live interactive livestream selling, which eBay says has gained traction with sellers and buyers since it launched in May.

EBay notes that its new slate of sellers’ tools each serves a distinct purpose but share a common strategy of engaging buyers who want more exciting interactions, such as conversing with a seller through an eBay Live live-streamed sales event.

Ebay ranks No. 6 in Digital Commerce 360’s new 2023 Global Online Marketplaces Report. The Global Online Marketplaces Database ranks the 100 largest such marketplaces by 2023 third-party GMV.

Thinking about ‘the future of ecommerce’

“EBay Live is a new platform that we just launched for our sellers, and that’s allowed them to reach a whole new audience … that Gen Z consumer who loves to watch live shopping and gets to chat directly with the seller,” Warvel says. “It’s just been a really interesting way to think about kind of the future of commerce.”

Jamie Iaonnone, president and CEO, eBay Inc.

Jamie Iannone, eBay’s president and CEO, said on a recent second-quarter earnings call that eBay is basing its ongoing growth strategy on “the three pillars of relevant experience, scalable solutions, and magical innovation.”

EBay’s plans follow recent mixed results in its marketplace activity.

For the second quarter ended June 30, the company reported a 5% year-over-year increase in revenue to $2.5 billion but a 12% drop in gross merchandise volume to $18.2 billion. For the full year 2022, revenue fell 6% to $9.8 billion, as GMV declined 15% to $73.9 billion.

Investment analysts raised the importance of new Q2  earnings call when Michael Morton, an analyst with Moffett Nathanson, asked: “Are you having some effectiveness in converting the millennials and Gen Z, who have maybe grown up in a different era of interacting with marketplaces?

Iannone responded that, besides introducing new brands popular with younger adults, eBay was seeing a notable response to the recently launched eBay Live. He noted that eBay did “over 300” eBay Live commerce events within the first couple of months.

“Sellers and buyers are getting really engaged in that,” he said. “And so that opportunity for us is to drive that customer lifetime value for a buyer as well as attract those new buyers on the platform.”

EBay makes a schedule of upcoming eBay Live events available in the eBay Live Hub.

Using AI to engage customers

Warvel says that eBay is also reaching into its long ecommerce history to provide sellers with extensive customer demand data, now enhanced with AI, for more effective product listings.

“EBay knows what buyers want; we know what types of things that a sneakerhead, for example, wants to understand about the condition of the shoe before they purchase,” she says.

But eBay will continue to work with AI and sellers — Warvel notes that many sellers have AI experience — to improve how the most valuable product attributes appear in site search and product listings.

“Optimizing and being dynamic in the listing based on the item that they’re selling is something that we’re working on the magical listing flow,” she says.

In a recent survey of 4,334 eBay sellers in the United States, the UK, Germany, Canada, Japan and Australia, eBay found that 68% of respondents expect their eBay business to grow over the next five years and that 55% expect their overall business to grow over the next 12 months. EBay conducted the survey in association with global insights and advisory consultancy GlobeScan.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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B2B marketing, sales, and product teams face a turbulent year ahead. It will be full of partner-centered growth and productivity ups and buyer demands, technology, and regulatory/legal downs. Generative AI will launch the potential for sweeping impact across all teams with a mix of success and failures expected during the next 12 months, Forrester says.

Here are three ways generative AI will change the world of B2B marketing

1. Millennials take charge

2 out of 5 Millennial buyers will demand early access to B2B product experts. Forrester predicts that 40% of younger buyers will rate person-to-person meetings with product experts as their most meaningful personal interactions.

Key takeaway: B2B sellers should forge effective partnerships with product experts and orchestrate all person-to-person interactions.

2. AI will play a big role in product development

Generative AI will surface insights that dictate one in five new B2B product launches. In 2024, Forrester expects product teams to adopt generative AI for idea identification and innovation because of its ability to rapidly sort through customer data for insights. Using generative AI to expedite reviewing an even wider variety of win/loss, competitive intelligence, and customer feedback sources will help to identify novel or non-obvious capabilities that make it into 20% of products launched.

3. Early and rushed AI may backfire B2B marketing efforts

Thinly customized generative AI content will degrade purchase experience for 70% of buyers. B2B buyers saturated in vendor content will have to sort through even more, as marketers and sellers adopt the rapid repackaging and reuse capabilities that generative AI delivers.

Key takeaway: Early experiments will struggle to produce more than simple vertical veneers, poorly personalized offers, or prospecting messages aimed at existing customers, giving buyers more of what they don’t want, Forrester says. Growing frustration will cause more than 70% of business buyers to voice displeasure about the material vendors share.

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The company, a $20.2 billion distributer of information technology products and services, rolled out an updated version of MyShop ecommerce platform for U.S. companies including virtual commerce (v-commerce) and artificial intelligence (AI) features, the company says.

“MyShop incorporates nearly all current TD SYNNEX vendor partners and gives resellers the opportunity to sell the vendor products and solutions that they have authorizations for,” says Brian Gibellino, senior manager, marketing DemandSolv. “As new vendors are onboarded with TD SYNNEX, we look forward to expanding this further.”

TD SYNNEX MyShop website

The updated MyShop also features new product configurators along with other enhancements. That includes:

• Full integration with TD SYNNEX’s product portfolio.
• Added reporting, data, and analytics capabilities.
• Enhanced search functionality and capabilities.
• Direct integration capabilities into a customer’s customer relationship management (CRM) or enterprise resource planning (ERP).
• Punchout capabilities.

“MyShop was originally created to help SMBs and other organizations develop a sophisticated ecommerce web shop without the added costs and labor typically associated with such projects using multiple third parties,” says TD SYNNEX senior vice president of marketing, technology solutions North America Bob Stegner. “Today, we’re providing solutions for any organization to meet the ever-changing ecommerce marketplace demands in efficient and effective ways.”

The newly renovated B2B ecommerce site also features a 3D purchasing experience and an AI-generated chatbot.

“TD SYNNEX offers resellers the largest catalog of products of any distributor, and that list will continue to grow each day,” Gibellino says. “MyShop allows TD SYNNEX reseller partners to leverage that catalog based on their authorizations.”

TD SYNNEX has a catalog of more than 200,000 technology products from more than 1,500 original equipment manufacturers (OEM), suppliers of infrastructure, cloud, security, data/analytics/IoT products and services. The company serves more than 150,000 customers.

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The Top 1000 is Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by 2023 third-party GMV. The latest analysis of the industry as a whole is published within the 2023 Global Online Marketplaces Report.

How much did Amazon make in Q3 sales?

Amazon sales in Q3 grew 13% over $127.1 billion in 2022. In North America, Amazon sales increased 11% year over year to $87.9 billion. And internationally, Amazon sales grew 16% year over year to $32.1 billion. Sales from AWS, or Amazon Web Services, increased 12% year over year to $23.1 billion.

“We saw our highest quarterly worldwide operating income ever,” said chief financial officer Brian Nowak on an Oct. 26 call with investors. It increased $8.7 billion year over year.

Amazon operating income grew at a much larger percentage than total sales compared with Q3 2022 — 343%. That’s nearly quadruple Amazon’s operating income in the year-ago period, growing to $11.2 billion in the third quarter from $2.5 billion. AWS operating income was $7 billion, up from $5.4 billion in Q3 2022.

Fulfillment and supply chain investments pay off

“Our cost to serve and speed of delivery in our stores business took another step forward, our AWS growth continued to stabilize, our advertising revenue grew robustly, and overall operating income and free cash flow rose significantly,” CEO Andy Jassy said in a statement. “The benefits of moving from a single national fulfillment network in the U.S. to eight distinct regions are exceeding our optimistic expectations, and perhaps most importantly, putting us on pace to deliver the fastest delivery speeds for Prime customers in our 29-year history. The AWS team continues to innovate and deliver at a rapid clip, particularly in generative AI.”

In addition to taking a regional approach to its fulfillment network, Amazon has begun offering Supply Chain by Amazon, which Jassy referred to as “a fully automated set of supply chain services.”

Supply Chain by Amazon can:

• Pick up inventory from manufacturing facilities around the world
• Ship it across borders
• Handle customs clearance and ground transportation
• Store inventory in bulk
• Manage replenishment across Amazon and other sales channels
• Deliver directly to customers

And Amazon sellers can do all of that without “having to worry about managing their supply chain,” Jassy said.

Brendan Witcher, vice president and principal analyst at research firm Forrester, said Amazon is one of the best in the business at delivering. Because of that, he said, it will have the challenge of setting customer expectations to always deliver on time. Witcher said it was notable that Amazon is using AI to help with inventory planning and optimizing driver routes.

“The real litmus test for Amazon’s regional supply chain will be the ability to deliver one-day and same-day delivery this holiday season with this level of growth,” Witcher said. “Fortunately, some of the volume should spread out a bit given that holiday really began with Amazon’s customers with the October Deal Days sale.”

Amazon powers up its generative AI technology

Jassy echoed points about generative AI from Amazon’s Q2 call with analysts in August. He broke down Amazon’s generative AI into three layers.

1. Lowest layer: Compute to train large language models (LLMs).
2. Middle layer: LLMs as a service.
3. Top layer: Applications that run the LLMs.

The middle layer, Jassy said, allows customers to customize those models “using their own data but without leaking that data back into the generalized LLM.”

“In these early days of generative AI, companies are still learning which models they want to use, which models they use for what purposes and which model sizes they should use to get the latency and cost characteristics they desire,” Jassy said in the Oct. 26 call with analysts. He said Amazon Bedrock “is the easiest way to build and scale enterprise-ready generative AI applications.”

“It’s pretty exciting what they’re doing for third-party sellers on the capabilities of generating web pages, generating product imagery for third-party sellers,” Forrester’s Witcher said. “They really do understand the small-business seller, to be quite blunt.”

How is Amazon doing financially 2023?

For the fiscal third quarter ended Sept. 30, Amazon.com Inc. reported:

• $143.1 billion in Amazon Q3 sales. That’s up 13% from $127.1 billion in the year-ago quarter.
• Amazon sales in North America in Q3 grew 11% year over year to $87.9 billion.
• International sales increased 16% year over year to $32.1 billion.
• AWS sales in Q3 grew 12% year over year to $23.1 billion.

For the nine months ended Sept. 30, Amazon reported:

• $404.8 billion in Amazon sales. That’s up from $364.8 billion in the year-ago period.
• Year-to-date Amazon operating income reached $381.2 billion. That’s up from $355.7 billion in the comparable period last year.
• International sales grew to about $91 billion, up from $83.5 billion.
• AWS sales grew to nearly $66.6 billion from $58.7 billion in the comparable period in 2022.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Amazon earnings article.

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The move is timely. It puts the global software company into a broad market push to help businesses facing supply chain challenges capitalize on AI advantages in procurement and supply chain activities. SAP provides widely used business operations software.

“GenAI is being embraced and adopted at a rapid scale, including in procurement,” says Jeffrey Rajamani, a senior analyst at Forrester Research. He covers procurement and sourcing technology and strategy. “It’s good to see that SAP has joined the bandwagon in bringing GenAI innovations in spend management. Sourcing and procurement functions in organizations are being disrupted, as the C-suite is tasking them with more strategic imperatives.”

SAP announced at its Connect Live event in Vienna, Austria, this week that it will soon make available procurement software applications embedded with GenAI to help procurement professionals.

The new SAP GenAI applications will help to:

• More quickly build comprehensive product categories through SAP Ariba Category Management.
• Improve spend management to identify cost-saving opportunities and more efficient purchasing practices through the SAP Spend Control Tower application.
• Expedite how they assess the risk of dealing with new suppliers through SAP Ariba Sourcing, SAP Ariba Contracts and SAP Ariba Buying software as AI helps to uncover suppliers’ reputations related to product quality and delivery service.
• More quickly identify new suppliers that meet their purchasing requirements related to product specifications and other criteria through SAP Ariba Sourcing. SAP recently integrated Ariba Sourcing with Scoutbee Discovery, an AI-powered supplier search application.

Christian Klein, CEO, SAP SE

Last month, SAP announced its release of Joule, a natural-language, generative AI tool it describes as a GenAI copilot. SAP will embed it into its applications for:

• Supply chains
• Procurement
• Customer experience
• Human resources
• Finance

SAP says Joule is designed for “quickly sorting through and contextualizing data from multiple systems to surface smarter insights.”

Joule has almost 300 million enterprise users around the world working regularly with cloud solutions from SAP, says SAP CEO Christian Klein.

And it “has the power to redefine the way businesses — and the people who power them — work,” Klein says.

SAP has room to grow with AI applications

When it launched Joule, SAP noted how a company might use it to check the cause of a sales decline.

“Imagine, for example, a manufacturer asking Joule for help understanding sales performance better. Joule can identify underperforming regions, link to other data sets to reveal a supply chain issue, and automatically connect to the supply chain system to offer potential fixes for the manufacturer’s review.”

Rajamani says SAP is off to a good start with AI-powered send management, which Forrester refers to as “supplier value management” or SVM. But he suggests it has room to grow with AI.

“While SAP seems to have addressed the supplier discovery, spend analytics, risk management and expense management parts of SVM, there are other areas where I think the demand for AI/GenAI has exploded exponentially: contract life cycle management and procure-to-pay,” he says. “It would be good for SAP to think through these important components, too, such as a GenAI bot to negotiate contracts.” (Procure-to-pay software manages and records commerce activity from the point a buyer begins the procurement process through payment.)

SAP conducted its Connect Live event Oct. 9 to 11. It did not immediately return a request for additional comments about its AI plans.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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The manufacturer and distributor specializes in automated control products for commercial and industrial buildings. For Kele, a high personalization performance level is critical to winning over loyal customers in a competitive market.

“Failing to swiftly provide a relevant, personalized experience — whether through self-service ecommerce or telephone interactions — could result in missed opportunities to acquire new customer accounts or expand existing relationships,” says John Strawn, Kele’s chief marketing officer.

He says a critical driver behind that experience is a suite of advanced technologies capable of instantly recognizing customers and then presenting them with relevant products aligned with their preferences. Kele boasts a comprehensive range of over 100,000 SKUs. It caters to building automation systems governing operations such as HVAC, lighting, flow, and security in commercial and industrial settings.

“Compiling product and customer intent data across all sources and decisioning in real time would have been impossible five years ago,” Strawn says. “AI serves as a pivotal tool in streamlining the connection between customers and these products, ensuring a swift and seamless experience to better understand your customers’ needs and serve them across channels.”

Stephen Rudolph, Kele’s chief technology officer, acknowledges the nascent stage of AI’s development. Nonetheless, he highlights its remarkable potential to impact sectors like marketing and software development, significantly amplifying the efficiency and productivity of respective teams.

Lenovo nearly doubles revenue via search results

At Lenovo, the computer manufacturer and marketer realized it needed to upgrade its ecommerce site’s search experience. The move led to a 95% increase in revenue gained through search results.

“We index half a million records every 12 hours,” says Marc Desormeau, head of global search. “Everything from data feed and product information, pricing, catalogs, things we sell.”

“We’re using data captured from our search engagements to inform some of our investments in SEM by looking at customers who are coming to us organically,” he adds. “How are they then engaging with our own site search? How can we start joining some of that data to ultimately present a better experience?”

So Lenovo upgraded its site search experience. It replaced legacy technology with site search technology design with AI-powered capabilities.

In the new report, “B2B Ecommerce Trends,” Kele, Lenovo and other companies and industry experts expound on B2B trends leading to “unified commerce” experiences critical to engaging today’s B2B buyers and standing out in an increasingly competitive omnichannel market.

The Pacing B2B Ecommerce Trends report is available for a free download.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Shah launched J’evar, a direct-to-consumer brand, in February. Before that, he learned from years of experience through ALTR, which he founded in 2016 and sells through retailers like Borsheims and Michaels Jewelers. Shah and his team developed an in-house generative AI tool that mocks up designs for new pieces of jewelry. To teach the tool, his team used data from ALTR and 90 years’ worth of jewelry from his grandfather’s business.

J’evar uses diamonds ALTR grows. ALTR grows those diamonds with energy from a solar farm with a capacity of 10 megawatts. It generates 35 to 40 kilowatts of energy each day.

The megawatt is the standard term of measurement for bulk electricity, according to EcoWatch, an environmental news outlet.

“A megawatt measures power on a large scale,” according to EcoWatch. “So one megawatt can power a lot more than one household.”

“We grow our own diamonds, we cut and polish them, we design jewelry, we manufacture the jewelry, and we bring it to the consumer. We use recycled gold for making our jewelry — recycled metals, so gold and silver,” Shah said.

With generative AI-driven design, J’evar achieves a level of precision that Shah says dramatically reduces material waste and boosts the retailer’s sustainability goals. Shah said he expects a 10% to 20% reduction in energy consumption and wasted materials in the jewelry industry because of generative AI.

“Sustainability is actually core to us,” Shah said. “We’ve made sustainability as a part of our DNA rather than a marketing buzzword.”

It all starts on a (solar) farm

Shah’s brands run on electricity from a solar farm in Surat, a city in Gujarat, India. It currently generates 10 megawatts of solar energy, and Shah says he plans to scale that up to 17 megawatts. To put that into perspective, the Solar Energy Industries Association calculates that on average, 1 megawatt of solar power generates enough electricity to power 173 U.S. homes.

The energy is then transmitted through the power grid into J’evar diamond-growing facilities with help from the local government.

“In order to grow diamonds, the single largest raw material is energy,” Shah said. “They’re very high energy consumption. You are basically using solar energy to power the systems.”

And in terms of carbon neutrality for the diamond growth, Shah said, the facility is audited for climate neutrality based on the United Nations greenhouse gas protocol. The protocol holds corporations, organizations, cities and countries to different standards.

Shah said J’evar offices and facilities are both audited for all its energy consumption, from shipping packages to employees traveling and various other factors.

‘JevarGPT’ and generative AI for jewelry design

J’evar’s generative AI tool allows its human jewelry designers to input information about a product’s materials and specifications, and the generative AI will produce an image of that product. The generative AI tool saves J’evar weeks of manual design time on products, Shah said. 

J’evar began using its jewelry product AI generator last year in 2022. The retailer feed metrics and images into a knowledge bank — or a database of text, images and metrics for materials that include the weight of gold and silver, among other key details — for the generator to refer to before it produces an image. Shah jokingly refers to it as “JevarGPT 1.0” and “AI for Jewelry 1.0.” The former is a reference to OpenAI consortium’s ChatGPT.  

For example, Shah said if he wanted to make a bangle, he could input a text prompt to the generative AI, specifying how much the weight of gold should be for that piece, how thin or wide it should be and what design style he would like. He can even ask it to produce 50 iterations from that single prompt. In return, the generative AI will output complete designs, some of which might be ready to turn into tangible products. Other product designs the AI outputs require J’evar designers to modify the design until it can be producible.

J’evar fed years’ worth of jewelry data into its generative AI platform. The platform produces images that human designers then adjust in the design phase.

Technological advances

Shah said J’evar can’t produce all its AI’s designs yet. A key reason is because of the inability to cut diamonds into the shape the AI generates. But even this ability is coming soon with new machinery, he said.

“You’re looking at optimization, efficiency, speed — which is of course going to lead to cost reduction in the longer term — but importantly, from an output perspective, we’re looking at precision and a higher level of creativity,” Shah said about using generative AI.

J’evar marries generative AI and sustainability

In the case of J’evar, generative AI can determine exact material amounts before creating an item, helping with sustainability by limiting waste.

“If we are able to predict the exact amount of gold we’re going to need, what the design is going to be, how much cubic millimeters of gold, the wastage will go down dramatically because you know exactly what you’re looking to produce. More importantly, the level of precision from a point of engineering will go much higher,” Shah said. “The amount of gold that is used will be very precise. How and what is printed in terms of the level of resolution will go higher, ultimately lowering the amount of wastage.

“Gold wastage will go low, but yes, that means the speed will go up, which means the energy requirements will go down. The material wastage from wax to silicon to machine usage, everything will go down. From a sustainability perspective, AI is going to have a direct impact on sustainability or improving the reduction of wastage.”

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Babylist, an online marketplace and baby registry aggregator, treats generative AI as a “co-pilot,” and not necessarily a time-saving tool, says Lee Anne Grant, chief growth officer.

Lee Anne Grant, chief growth officer, Babylist

“It’s a tool to help generate ideas, content and copy,” she says. “In some ways, using it is taking us more time.”
This is because Babylist’s creative team uses the technology to inspire rather than outright write complete blog posts or other marketing content. Marketers ask AI questions and then think about how the results can help them create.

“We had an all-hands meeting [in early 2023] with the goal to approach the technology in an educational development way,” Grant says. “You’re not only allowed to use it for your job, but you’re also expected to.”

More retailers are likely to follow suit as the technology continues to advance and retailers learn how to wield it. 56% of U.S. marketing or advertising decision-makers already use generative AI in their marketing efforts, according to consulting firm Forrester Research Inc.’s June 2023 business-to-consumer marketing survey of 154 executives. These large language models, chatbots and image generator vendors include ChatGPT, DALL-E, Stable Diffusion and Midjourney.

Digital marketers are learning that the more they test, the more the technology learns. This affordable tool can help — but not replace — marketers. Babylist uses ChatGPT to test copy for newsletter and marketing email campaigns. Online florist UrbanStems uses generative AI to write blog posts, and it creates images for social media marketing creative. And men’s footwear brand Koio uses AI-generated copy for brainstorming email and ad ideas. The costs are low, and retailers like UrbanStems are mindful that if they aren’t using it, their competition certainly is.

Retailers must consider the potential upsides — and pain points — when using generative AI

Digital marketers are using generative AI to draft ideas and examples for emails, SEO and other marketing materials. While the potential benefits are vast, there are also concerns, says Jay Pattisall, vice president, principal analyst at Forrester.

Marketers must consider how brands, retailers and agencies are using the technology, Pattisall says. Copyright law does not protect AI-generated art, for example.

But the potential for how brands can use AI is exciting, he says. Advertising agencies are building platforms for their clients as part of their own proprietary technology. Retailers are building in-house, too, he adds.

“But at this stage, it’s more practical to buy because there are more options available on the marketplace. That may change in the future,” he says.

Babylist tests ChatGPT-generated email campaigns

Babylist uses ChatGPT to test newsletter marketing email campaigns. In 2023, Bed Bath & Beyond Inc., owner of major baby products retail chain Buy Buy Baby, filed for bankruptcy. Babylist saw this as an opportunity to acquire Buy Buy Baby’s customers.

Babylist ran a test for an email marketing campaign on April 29 with ChatGPT for its two newsletter audiences. It sent out one test to 10% of its “pregnant” newsletter recipients (about 59,000 subscribers out of 589,000 on the total list) and 10% of its “parent” newsletter recipients (222,000 recipients of 2.32 million).  Half of each group received one email written by a Babylist editor and the other written by ChatGPT.

The results? For the pregnant group, the editor’s email won with a 2.9% higher open rate compared with the generative AI’s version.

• The Babylist editor’s subject line: “buybuy BABY Bankruptcy & Your Registry: What to Know.”
• The ChatGPT’s subject line: “What the buybuy BABY Bankruptcy Means for Parents.”

For the parent group, ChatGPT gained a slight edge over the human editor with a 0.37% higher open rate.

• The Babylist editor’s subject line: “buybuy BABY Bankruptcy & More Parent News.”
• The ChatGPT’s subject line: “What the buybuy BABY Bankruptcy Means for Parents.”

Babylist found that ChatGPT-generated subject lines increased open rates in half of their tests. It concluded that ChatGPT is a “great resource for when the team needs subject line inspiration or help writing one,” Grant says.

AI helps retailers brainstorm ideas

ChatGPT-generated content helps Babylist’s creative team create better content, Grant adds. The value is in the brainstorming.

“If a copywriter is feeling stuck on a new concept for TikTok video, they can ask ChatGPT to generate a bunch of ideas,” she says.

Using generative AI allows retailers to scale and personalize marketing based upon the brand’s approach, says Forrester’s Pattisall.

“Let the people be in charge of the creativity and let the machines help scale and volumize the marketing,” Pattisall says.

Retailers must consider copyright and liability issues

Babylist employees are instructed not to share proprietary or confidential information with ChatGPT or any other public generative AI platform, Grant says.

This is important because retailers must also take care about what materials they use to “train” the AI model, Pattisall says.

“If those inputs are using data points that are copyrighted material, then the model potentially is violating the copyright by using rights-protected materials,” he says.

One example of this is between visual media company Getty Images and Stability AI Inc. Getty Images accused Stability AI of using more than 12 million photos without permission or payment to use those images. The complaint, filed in February 2023, says that Stability AI unlawfully used Getty’s copyrighted images and text, including metadata, to train its AI text-to-image tool Stable Diffusion.

Metadata is the information used to summarize how and when the data was created as well as the source, type and owner of the data. Stable Diffusion is a text-to-image model that uses deep learning to generate high-quality images from written descriptions.

“All of Getty’s images are copyrighted images,” Pattisall says. “So the liability is a concern for marketers.”

UrbanStems jumps onto generative AI to keep up with competitors

Competition prompted online flower retailer UrbanStems to focus on generative AI, says Katie Hudson, content director. In early 2023, the retailer was already using generative AI to create notes to accompany its flowers. Hudson says she noticed competitors doing the same — and she read about it in the media.

Katie Hudson, brand marketing and content, UrbanStems

UrbanStems decided to look into how it could use the technology beyond brand awareness, Hudson says.

Mother’s Day is UrbanStem’s busiest holiday. It accounts for 15% of the retailer’s total annual revenue. For Mother’s Day 2023, the retailer used ChatGPT to write a blog about the 10 best brunch spots for Mother’s Day in Washington, D.C.

UrbanStems marketers wrote the introduction, AI wrote the rest of it, and the article appeared in the retailer’s blog section on its website.

“During May, which includes Mother’s Day, we saw this local post drive 5% of our organic blog traffic. It was in our top 10 performing posts for the month,” Hudson says.

Blogs are not intended to drive conversion, but rather, improve organic search results, she says.

“Our blog had our highest ever non-brand search traffic during Mother’s Day,” Hudson says.

This could be attributed to the brunch blog, among other marketing efforts, she says. Over the two weeks leading up to Mother’s Day, UrbanStems’ organic search’s conversion rate increased 17%, she says.

UrbanStems used AI to write a top 10 best brunch spots for Mother’s Day in Washington D.C. in April 2023. The post increased organic blog traffic 5% in May. It was in the top 10 performing blog posts of the month.

UrbanStems has not drafted enough generated-AI posts on its blog to truly compare performance, Hudson says. Part of the reason is because it typically takes several months for its blogs to gain traffic and views in search engines like Google, she says.

Digital marketers use AI to automate content creation tasks

Not only did this ChatGPT-post drive traffic to its site, but it saved its marketers time as they did not have to manually research brunch places.

The retailer is drafting at least one AI-generated blog post a week to test how the posts perform, Hudson says. UrbanStems marketers use templates to help guide the AI. Marketers can use saved templates and copy and paste information like name insert and word count requirements, she says.

“We don’t have to do everything from scratch,” Hudson says.

What’s left is copyediting.

“I find where it’s saving us time is truly the structure of the blog. It builds it out. We give it all the key questions you might want answered and it will give us some interesting facts. We then go in and tweak as needed,” Hudson says. “Instead of a blog post taking a couple of hours, it will take 20 minutes.”

AI results need human assistance

The AI results aren’t perfect, as sometimes the AI will make up descriptions for products it does not know, or it will not write in the tone UrbanStems’ brand voice, Hudson says.

“We asked ChatGPT to write about a bouquet with a certain kind of flower and the description was way off. It didn’t know our products at all,” Hudson says, without revealing more. “It was kind of guessing. So, we had to go back and do tweaks.”

UrbanStems is feeding ChatGPT its own product descriptions. This will help it better understand the tone of the “brand’s voice” as it learns, Hudson says.

“We’re still working on having AI understand our brand voice. AI tends to create cheesy writing [for descriptions],” she says.

So for now, UrbanStems is still writing its own product descriptions.

“We are using AI to draft all our SEO content, some of our blog content, and all our meta descriptions and title tags for SEO purposes,” she says.

Retailers use AI to generate marketing content

Babylist also uses generative AI for search engine optimization. The online marketplace uses Frase, a generative AI content writing software vendor.

Typically, marketers log into Google Webmaster Tools to search what to use for SEO, Babylist’s Grant says. Now, Frase generates frequently asked questions keywords that Babylist should use to make sure an article they’re writing is SEO-optimized, she says.

“That frees up our editors to take the time to write an article and create better quality content,” Grant says, without revealing more.

Forrester’s Pattisall says generative AI will allow retailers to send more relevant communication. Marketers can uncover new ways to grow and acquire new customers. They can also use the technology to keep existing customers at a cost that does not exponentially increase year after year, he says.

“[Retailers] can maintain their business margins,” he says “They can provide the type of marketing services that they’re good at in a way that doesn’t break the bank. [The technology] allows them to be profitable,” he says.

Generative AI produces images for social media

Another way marketers can use generative AI is to create images. UrbanStems uses AI software program Midjourney that creates images from text prompts. Marketers ask it to create an image of a 10-stem red and white arrangement of peonies, in a glass vase on a white background.

Hudson says the results were encouraging.

“While it still looked like AI — not quite like a true image — it was a great starting off point,” Hudson says. “I sent that off to the merchandising team and they were able to use that image for vendors to use as a reference. That’s a huge value to us.”

AI-generated images allow UrbanStems to experiment and create new bouquet designs quickly. They do not have to buy the flowers and conduct a photo shoot to mock up new designs, she says.

Hudson says the retailer uses the standard tier of Midjourney, which means it has limits on how many images it can have the AI create in a month. Businesses can also pay more to have the AI generate images in seconds or create images in 10 minutes for cheaper.  A basic plan can cost $10 a month to $120 per month for a mega plan.

UrbanStems uses Midjourney to create images of flower arrangements to use as product mock ups to share with vendors.

Using generative AI to generate social media images

During the summer of 2023, UrbanStems ran a test via social media to see if it could gain consumers insights using AI generated images.
The test used products UrbanStems already sells, but the goal was to see if it could gain insights before actually creating new products.

The retailer launched “This or That” polls using Instagram Stories, where viewers could vote on which bouquet they preferred. The stories were live for 24 hours. UrbanStems paired similar bouquets together that have similar price points and color schemes.

The retailer’s average interaction rate for Instagram stories is 20% of its 233,000 followers view the story.

The poll’s results reflected real-life sales, Hudson says. The winning bouquets had higher
online sales compared with the bouquets with fewer votes, she says. The bouquets Sol vs. Neon Lights polled from July 12-13, 2023, with Neon Lights as the clear favorite with 79% of the vote compared to Sol’s 21%.

In UrbanStem’s Summer 2023 summer poll “This or That,” in its Instagram Stories, The Sol received 21% vs. The Neon Lights (79%).

These results give Hudson confidence that the brand could do a poll like this with AI-generated images so UrbanStems will know what shoppers’ preferences are before going to market with those products.

What’s more, it’s insights like these that Hudson believes will lead to further investment from its management team in Midjourney and generative AI applications in general.

“I feel confident I could get our company on board investing in [higher-cost plans],” Hudson says. “It will take some of the heavy lifting off our junior marketers that no longer have to be in the weeds looking up SEO terms, for example. We want our employees to grow in their role and not be bogged down.”

Marketers test and learn from AI

Another way retailers are using AI is to help alleviate the workload for junior marketers. Some retailers like men’s footwear brand Koio are just getting started using generative AI.

For about six months, Koio has used ChatGPT for email subject lines, says Joe Anhalt, vice president, marketing, growth.

“It’s one of the first places we go for inspiration,” Anhalt says. “It might take a few times and we have to make tweaks on our own, but the prompts are showing us results.”

The shoe retailer uses the AI-generated copy for performance ads on Facebook and Instagram, he says, without revealing more. The brand uses software vendor Zenlytic with generative AI tool Zoe. Zoe answers questions and generates reports about how marketing campaigns and specific promotions are performing.

While Koio hasn’t tracked how AI is performing compared with human marketers, the tool has saved it considerable time, he says.

“The larger win for us has been not needing a full-time employee to produce some of these tasks,” Anhalt says.

AI has helped marketers free up time to do other tasks, Anhalt says. However, there is a learning curve for junior marketers, he says. The retailer typically pairs a junior marketer with a copywriter until they are confident the junior marketers can use ChatGPT or a similar tool to craft emails, banner ads and other site content, he says.

What does it cost to use AI?

Overall, Babylist, UrbanStems and Koio said the cost to use generative AI technology is affordable. For certain applications, ChatGPT is free and services like Midjourney and Frase charge “reasonable” rates, according to UrbanStems and Babylist.

It’s not about the cost, Forrester’s Pattisall says. “Retailers’ knee-jerk reaction tends to be, ‘how much money is this,’ or ‘how much money will this save us?’” Those are the wrong questions, he says. “The better way to think about this is how effective it’s going to be.”

Generative AI continues to evolve at an accelerated rate. As marketers learn how to use it, the technology itself improves. It’s an idea generator if nothing else, Babylist’s Grant says.

“An editor might ask ChatGPT to come up with 40 ideas for an Instagram post,” Grant says. “30 out of 40 of those ideas might be bad — but you end up with a gem of an idea from all the wacky weirdness.”

The post Why digital marketers should not fear generative AI  appeared first on Digital Commerce 360.