eCommerce automation helps businesses maximise productivity by optimising daily processes such as inventory management, fulfilment, and customer service. It eliminates the need for human intervention in many aspects of a company’s operations, resulting in greater accuracy and a more efficient business.
But what does eCommerce automation look like, and how does it work? This article explores the basics, before diving into common challenges and examples.
What is eCommerce automation?
eCommerce automation is the process of automating various tasks associated with operating an online business. It is achieved using various software tools, cloud-based technology platforms, and robotics to streamline manual processes.
In many online businesses, eCommerce automation is used to improve efficiency, cut costs, and deliver better service at scale. Because it relies on computer systems instead of manual input, it also helps companies achieve greater data accuracy and stronger cybersecurity.
Automation has many uses in eCommerce, including for:
- Supply chain management
- Inventory management
- Order processing
- Shipping
- Customer service
- Email marketing
- Advertising
Benefits of eCommerce automation
The main benefits of eCommerce automation are that it saves you time and money, improves data accuracy, and lifts productivity. But those aren’t the only reasons to invest in automated solutions.
Other benefits of eCommerce automation:
- Increased efficiency: Automating repeatable tasks enables you to achieve greater output with less input, resulting in better productivity, cost savings, and faster workflows.
- Improved employee job satisfaction: By automating less desirable manual tasks, you’re freeing up staff to focus on more interesting, challenging, or creative work.
- Better customer service: Automation reduces the risk of human error and the time it takes to complete certain tasks. This facilitates more effective communication with customers and allows you to better personalise their shopping experience.
- Data insights: eCommerce automation software generates better reports in – less time – when compared with manual processes. This helps you make business decisions using evidence-based insights, helping you steer your organisation in the right direction.
- Easier scaling: As you automate various tasks, productivity goes up. This allows you to scale more effectively as it extends the limits of what your team can achieve each day.
Finally, eCommerce automation makes it easier to work with your suppliers. Data can be collected and shared between systems to improve supply chain visibility and strengthen vendor relationships.
How does eCommerce automation work?
Most eCommerce automation software systems work off a simple premise of triggers and actions.
These are known as automation workflows.
Workflows can be small (one trigger creates one action) or large (one trigger creates multiple actions and the entire system learns as it cycles through a feedback loop powered by machine learning algorithms).
Examples of simple eCommerce automation workflows:
- Trigger: Stock levels drop below a certain amount
- Action: Automatically reorder new stock from the supplier
- Trigger: A customer places an online order
- Action: Order details are sent through to the warehouse team
- Trigger: Stock levels drop to zero, but new stock hasn’t arrived yet
- Action: The online store is automatically updated with 'Out of Stock' to notify customers
- Trigger: A customer’s order is assigned tracking information
- Action: The system delivers them an email containing their tracking number
In a more complicated automation workflow, an example could be a business selling seasonal goods. An eCommerce automation system uses machine learning to detect the peaks and troughs of this seasonality and suggests the optimal time and quantity for reordering.
The result is less waste, improved cash flow, and leaner operations for the business.
What can be automated in eCommerce?
eCommerce automation can be useful for many areas of the business, from how you speak to customers to your process for reordering from suppliers.
This table demonstrates some common examples of eCommerce automation:
Inventory management | Track inventory levels; set automatic reorder points; update online store with real-time stock levels; accurately forecast sales, inventory, and purchasing needs. |
|---|---|
Supply chain management | Manage supplier contact information and interactions; automatically deliver key documents; synchronise systems with external providers; automatically reorder materials when required. |
Customer service | Handle basic customer enquiries and direct people to appropriate support articles with chatbots; automatically send order updates to customers; offer personalised deals and customise brand experiences based on purchase history. |
Order management | Generate packing slips, shipping labels, and invoices automatically; route orders to relevant fulfilment centres; organise couriers; optimise last-mile delivery routes. |
Marketing & Customer Relationship Management (CRM) | Segment customers based on purchase history or demographics; automatically personalise offers, advertising, and social media experiences; automate customer onboarding and abandoned cart communications; deliver automated email marketing campaigns. |
Finance | Automate payment processing, currency conversion, and tax calculations; connect sales, inventory, and financial systems to ensure accurate data; minimise accounting errors by reducing manual human input. |
Reporting & Analytics | Automatically collect key sales and customer data; create easy-to-read reports that offer snapshots of the business; analyse data between different sales periods; identify sales trends and business risks. |
Logistics | Receive real-time shipping updates; optimise shipping routes; send automated delivery notifications to customers. |
Common challenges of automating eCommerce processes
While automation solves a lot of problems for eCommerce businesses, it isn’t always necessary or easy to implement.
Here are some common risks and challenges of eCommerce automation:
- Complexity of integrating systems: Best-practice process automation usually requires reliable integrations. If one system can’t easily talk to another – to share accurate data – it can impact efficiency.
- Increased maintenance and costs: Adding more software systems and automation tools to your business can increase costs through software licensing fees (subscriptions) and device maintenance.
- Resistance to change: Automated systems sometimes breed negative sentiment – employees worry their jobs are going to be ‘replaced by robots’. These are communication challenges that your business will need to overcome.
- Data privacy concerns: Collecting and storing more data may increase the cybersecurity risk for your business. You will need to think carefully about compliance to ensure your organisation and customers are not vulnerable to a breach.
- Over-investment: Many organisations over-invest in tools they don’t need or aren’t ready for. Selecting the right automation solutions at the right time for the business is vital for sustaining a company’s cash flow and profitability.
Automation can be helpful in many ways, but it can also have a negative effect: it’s worth mentioning the risk of dehumanising your brand with too many automated services. For example, if a customer desperately wants to speak to a human being and is stuck going back and forth with an AI chatbot, there’s a risk they’ll abandon their cart and shop somewhere else instead.
eCommerce automation examples
eCommerce automation can be found everywhere in a business’s operations. Let’s turn our attention now to some common examples of how automation may be applied to different workflows and activities.
Inventory management automation
Inventory management automation allows eCommerce merchants to track stock levels, locations, and other critical information in real time. This saves inventory managers a trip to the warehouse every time an order comes in and mitigates the risk of overselling or understocking.
Automated systems, such as inventory management software, may also be used to automatically reorder stock when it drops below a certain level. A purchase order may be created and delivered to the supplier without adding to the purchasing officer’s task list.
Inventory management software can also generate automatic reports, synchronise sales and stock levels between your eCommerce and accounting systems, and produce bills of materials for manufacturers.
Some inventory automation solutions even set recommendations on optimal stock levels based on past events to reduce the risk of stockouts or over-purchasing.
Order management automation
Much of the order management process is now automated for eCommerce merchants. If you’re selling through a common sales channel like Shopify or Amazon, there’s a good chance much automation is happening without your noticing.
Some examples include:
- Automatic accepting of online payments and confirmation of customer orders
- Automated order status notifications for customers
- Automated tracking number and shipping label generation for deliveries
- AI-powered chatbots for managing basic customer enquiries
- Automated cross-sell and upsell offers based on customer behaviour
For businesses that hold stock in multiple storage locations, order management automation can enable dynamic allocation of fulfilment based on optimised route planning, transport costs, and real-time stock levels.
Multichannel order management software can also synchronise sales and inventory between multiple channels, ensuring all your stock and financial data is accurate across the business.
Supply chain and logistics automation
Supply chain and logistics solutions enable integration between various links in a supply chain to improve supply visibility, collaboration, and accuracy of costs. This makes them especially practical for companies dealing with vendor-managed inventory (VMI) or third-party logistics providers.
Some tools utilise a variety of data sources to predict more optimised shipping routes, considering real-time traffic, weather, and fuel costs. Supply chain automation can also help you identify historical trends and predict demand.
Accounting automation
eCommerce accounting is a complex process with many inputs. And because it informs your tax obligations, getting it right is especially important.
Accounting automation helps improve accuracy and efficiency by minimising the need for manual human intervention.
eCommerce accounting software can help you:
- Automatically track costs, expenses, assets, liabilities, and other payments
- Reduce time spent on bank reconciliation
- Automatically calculate inventory value, cost of goods sold, tax, and profitability
- Auto-generate invoices and other financial documents
- Produce accurate, detailed financial reports
Some accounting automation solutions also help you create budgets and forecasts, detect fraud, and optimise your product pricing based on profitability and sales metrics.
eCommerce automation eliminates the need for manual calculations and reporting.
Which eCommerce automation software is right for me?
These are some crucial questions to consider when investing in ecommerce software. It’s important to invest in tools that will support your company’s growth and cash flow – and to avoid shiny object syndrome.
Key questions to ask yourself before purchasing eCommerce automation software:
- Does the software integrate easily with the software I already have (or intend to buy)?
- Does the software do what I need it to at the price I’m willing to pay?
- Can I trust the software provider? Do they have positive reviews?
- Is my team equipped to use the software?
- Will it require additional training? How much will that cost?
- How easy is the software going to be to maintain?
Generally, the larger or more complex the software – or the more software plug-ins you install – the more complex and expensive it will be to manage.
ERP solutions vs. best-of-breed automation software
eCommerce automation software can be broken down into two categories:
- Enterprise Resource Planning (ERP) solutions: A singular, complex software solution with different modules pertaining to the different aspects of running a business. It may function as an order management system, an accounting system, and an inventory system all wrapped up in one.
- Best-of-breed solutions: Specialist software for managing each aspect of a company’s operations, often integrated to improve productivity and data consistency.
For large enterprises or companies with complex workflows, an ERP system may provide an easy and holistic solution – though it comes at the risk of the entire business crashing if a server goes down.
For small–medium businesses or those with simpler requirements, best-of-breed solutions are an inexpensive option that allows you to scale sustainably by only purchasing new software if and when you need it.
