Starting an e-commerce brand has never been easier; anyone with a product to sell can have a Shopify or Woocommerce shop running within a few hours. Yet, it’s never been harder to actually grow and scale. You must find your customers on multiple channels and take orders from them on multiple platforms.

As an e-commerce owner, it’s no longer enough just to have your own website. On average, one brand needs 10-12 tools to run its business with thousands of data points to parse through. Add the backdrop of rising interest rates, inflation, and customer sophistication, which have increased customer acquisition costs (CAC); it becomes a vicious cycle where the odds may feel against you as an e-commerce owner. 

Enter AI. 

AI is an enabler that can help solve a number of pain points and help reduce resource and time constraints for young D2C brands. Here are a few successful use cases for implementing AI for your e-commerce brand. 

Using AI to parse and provide actionable insights

New e-commerce brands today are overloaded with data. It is a whole lot of noise. With CAC as high as in the US$100s per customer and customers spending less but expecting more, leveraging data to find the right customers and deliver targeted and effective marketing campaigns is even more important today.

You can connect your most-used data sources such as Shopify, WooCommerce, Meta Ads, Google Ads, Klaviyo, and Google Analytics so the AI can run different growth scenarios and analyses within seconds using your data but also comparing it against reasonable benchmarks for brands like yours.

This allows the AI to predict areas of focus where you are likelier to grow and succeed and customers better suited for you. It can then provide actionable insights in those areas, utilising a database of tactics prioritised on factors such as estimated uplift, effort required, and other factors based on your brand and industry. 

Also Read: Why fintech companies should learn about customer retention from e-commerce companies

The other thing to note is that customer personas are no longer about demographics; for example, creating campaigns based on age and socio-demographics. We are now shifting to indexing more on the use case, e.g., what am I buying this product for? That can span different types of people or personas.

For example, one of the brands we work with is a skincare anti-ageing brand. This product may seem geared toward a slightly older demographic on paper. It would be very easy to come up with a traditional marketing segmentation (e.g., female, ages 35 to 54 years old, etc.) and launch an ad campaign based on that segmentation. 

With the predictive capabilities of AI, we found that younger age groups  (e.g., 25-30-year-olds) would likely be keen to use the skincare brand for preventative care, and the same group was also interested in pop culture and celebrities. The AI can then prescribe to target 25-30-year-olds and develop an ad campaign and creatives that touch on today’s pop culture trends. 

Using AI to find the right customers: Your ‘better’ customer

A common question brand owners ask is, “Where can I find more of my better customers or the right customers?” AI can help you build a profile of your ‘better’ customers, i.e., customers who will buy, stick around, and ultimately, be profitable.

AI can produce such a  customer profile. AI can tell you what they look like, what they are likelier to purchase now and in the future, and where they could potentially come from.  It can actively trawl and look at available channels to access customers, social media sites, affiliate marketing players, and other marketplaces. The result is that it will tell you that “your ‘better’ customer looks like this type of person, and you can find them in these places.”  

For example, for one of our organic food brand customers, the Needle AI figured out similar interests that the ‘better’ customers of this brand might favour, such as holistic health and home gardening. The AI recommended a prospecting campaign using interest targeting on Google Ad platforms, and they saw a return on ad spend of 8x instead of their usual 2x. 

Using AI to increase customer stickiness

Retention is a pain point for most brand owners. Assuming you have a good product, theoretically, getting the customer through the door is more expensive, though it should be cheaper the second or third time around, and that’s where your profits come in.

Also Read: How express delivery services can become a key differentiator for e-commerce businesses

But, the challenge lies in getting the better product in front of an existing customer at a better time while wading through all the noise that we’re all typically bombarded with from all angles. 

With the predictive abilities of AI, it can develop a view of what customers are currently primed for another purchase from your brand, what product they are likely to buy next, and what channel is best to reach them with. 

At Needle, one of our brands provides fashion accessories worldwide to women in urban areas. It predicted the likely products existing customers would return and purchase the second time and within how many days of their first purchase. It recommended they set up an automated campaign that sends an email to existing customers after their first purchase of specific products.

The email was among their highest converting ones (converting 70 per cent higher than their average email), generating thousands of dollars of monthly revenue in “set and forget” mode. 

AI can help you do more with less

Velocity matters when scaling a D2C e-commerce brand, and success is about the number of smart bets you can take quickly. As a brand owner, you are in the business of gambling whether you know it or not (note: we do not endorse actual gambling!). Your ultimate success ultimately correlates with how many smart bets you can take as quickly as possible. The AI technology being developed today allows you to take these kinds of bets. 

At the same time, young D2C brands are often resource-constrained — with the founder wearing multiple hats. Using AI, we’ve seen the output in terms of the execution of a team three or four times their size. All this allows you to take a higher volume of smarter bets, giving you a higher chance of success and defying the odds. 

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Asia Partners, a Singapore-based growth equity investment firm, has announced the final close of its second fund at US$474 million in commitments.

The Limited Partners in the fund include institutional Partners’s family offices and individual investors across six continents. Returning investors include the International Development Finance Corporation (IDFC) and Financial Investments Corporation (FIC) from the US, and the Deutsche Investitions — und Entwicklungsgesellschaft (DEG) from Germany and Generation Capital from Canada. More than 9 per cent of Fund II’s capital is from Asia Partners’s employees and Advisory Board members.

Also Read: Asia Partners’s maiden fund hits final close at US$384M

Asia Partners II typically invests between US$20 million and US$100 million. The fund is 23 per cent larger than the inaugural US$384 million, which completed its final close in March 2021.

With the final close of Fund II, Asia Partners has reached US$1 billion in assets under management.

Asia Partners is focused on the intersection of three key themes:

1) the long-term growth potential of Southeast Asia, a region with almost 10 per cent of the world’s population, and Southeast Asia’s increasing economic connectivity to the rest of Asia and the world,

2) the rapid growth of innovative technology and technology-enabled businesses in the region, many of which are platforms with pan-regional or global aspirations,

3) the scarcity of growth equity capital for these companies, particularly in the US$20 million to US$100 million investment size range, often described as the ‘Series C/D Gap’ between early-stage VC and the public capital markets.

Oliver M. Rippel, a Partner of the firm and a member of the Investment Committee, said: “We continue to believe this decade will be a golden age of entrepreneurship and innovation for Southeast Asia.”

Also Read: With just US$108M raised, December was the least funded month in 2023: Tracxn

The Asia Partners Advisory Board is chaired by Hsieh Fu Hua, the former CEO of the Singapore Exchange, the co-founder of the PrimePartners Group, and the Chairman of the National University of Singapore.

“Southeast Asia is highly strategic for international investors, given its importance in global trade, supply chain management, rising affluence and the increasing digitisation of daily life,” said Hsieh. “Opportunities abound for our regional economies to be transformed by the combination of entrepreneurial innovation and growth equity.”

In 2022, Asia Partners led the US$80 million Series F funding round of ShopBack and joined the US$38.8 million Series C round of Doctor Anywhere.

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Staying compliant and out of the legal line of fire is no easy task for HR teams these days. It seems like as soon as we get a handle on existing regulations, new rules and mandates come at us from all directions. It’s a full-time job, just keeping up!

But, staying agile and informed on compliance issues is mission-critical. When laws change overnight, we need to be ready to pivot our policies and practices to align. In this article, we’ll review three rapidly emerging compliance areas that every HR professional should have on their radar:

• The drive for pay equity and compensation transparency
• Evolving training regulations and requirements
• AI ethics and keeping personal data private
  

By getting up to speed on these topics, we can transform compliance from a necessary evil into an opportunity to improve our organisations. Knowledge and preparation are key to not just reacting to but proactively shaping the regulatory environment.

So, let’s dive in and arm ourselves with the information needed to keep our companies and colleagues safe. The compliance landscape may be ever-changing, but if we stick together and stay vigilant, we can build an HR function that’s ready for anything.

Pay equity and transparency

Pay transparency and equity have become front-and-centre compliance issues that companies can no longer afford to ignore. Inequitable compensation exposes organisations to substantial legal risks and reputation damage. But beyond just mitigating problems, addressing pay gaps represents an opportunity to build a more just, motivated and productive workplace.

The gender (and racial) wage gaps remain persistent problems despite growing societal focus. And employees have increasing access to pay data, whether through voluntary company disclosures or anonymous sharing on sites like Glassdoor. This transparency places growing pressure on organisations to take meaningful action if inequities exist.

Also Read: Thriving under pressure: Navigating tech teams through stress

As stewards of company culture, HR is well positioned to spearhead the charge on pay fairness. This starts with auditing and analysing current pay practices to uncover any biases or imbalances. Comparing roles, experience levels, and performance rather than relying on compensation history can surface gaps.

Once identified, develop an action plan to address deficiencies and communicate changes transparently. Work with executives and managers to align pay with equitable principles, not just market forces. Embracing transparency and leading with your values in this emerging climate is key. While complex, confronting pay inequity builds trust, engagement, and opportunity. Leaning into this issue positions HR to cultivate a truly fair workplace.

Training compliance concerns

Implementing effective training on critical topics like harassment and safety is so important, but we’ve also gotta be thoughtful to avoid compliance pitfalls that can accompany these programs.

Obviously, we need to ensure all training adheres to relevant state and federal regulations – no shortcuts there. Recording sessions can be risky, too; it’s key to get consent where required and have ironclad data security.

Active shooter preparation brings up sobering realities, but properly training staff to handle emergencies shows the duty of care and just makes sense legally if, heaven forbid, an incident did occur someday.

Detailed training records are crucial, too — auditors will want proof that every employee completed each mandatory program. But we can’t let vital training become a checkbox exercise either. Creative formats, ongoing refreshers, and engagement opportunities will help the lessons really sink in and shape workplace culture.

If we plan carefully and approach compliance requirements strategically, we can provide necessary training while avoiding disengaged learners or legal snags down the road. Let’s use these opportunities to educate, empower, and build workplace culture.

AI and emerging technologies

The rise of AI and automation tools certainly holds promise for advancing HR capabilities. Recruiting chatbots, predictive analytics, algorithmic bias detection — these innovations appeal to any HR professional focused on efficiency and insight. However, for all their potential benefits, these emerging technologies also introduce new ethical and legal complications that must be addressed responsibly.

Full transparency is needed on how AI systems are designed and deployed in order to safeguard against issues like unfair bias or over-automation. Extensive testing and validation should be required before the full launch of any AI technology. Additionally, clear human oversight and opt-out provisions may be prudent to maintain accountability.

Heightened data privacy considerations arise as well in our increasingly digitised HR landscape. Careful audits on what types of employee data are being collected, analysed and retained by AI systems are called for. Access should be tightly controlled on a need-to-know basis, with anonymisation used where suitable. Timely and secure data deletion is a must once useful life has expired.

With diligent cross-functional collaboration between HR, legal and IT, it is possible to navigate these challenges successfully. The tremendous potential of emerging technologies can be harnessed in an ethical manner by laying the proper foundations of transparency, testing and oversight first. Though risks exist, the possibilities for advancing human resources through AI remain bright.

Closing thoughts

The road ahead will probably throw some curveballs as regulations and technologies keep evolving quickly. But HR professionals have tons of power to guide companies in the right direction — not just checkbox compliance, but real justice and engagement.

Whenever some new law comes into effect, let’s look at it as an opportunity to align things with your best values. If you get creative and work together, you can turn rigid rules into launching pads for making positive changes. Compliance matters, no question. But it works best when it’s part of working towards a bigger goal that we believe in.

HR’s purpose is clear as day — champion workplaces where everyone can thrive and reach their potential. If we keep that in mind, it’s possible to navigate any twisty compliance turns down the road.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic

Join our e27 Telegram group, FB community, or like the e27 Facebook page

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