As we continue our journey to transform the online business at Staples, one thing we’re using to guide our product and technology roadmap is automation. We need to optimize on several axes – speed of operations, (and actual throughput), efficiency, correctness, and cost.
Given the size of the business at Staples (the various online pieces combined are several billion dollars a year), we’re moving as much heuristics as possible into automated decision making systems. This will allow us to improve end-to-end throughput, while optimizing revenue and profit, and reducing cost. Similarly, all incidents will be tagged and tracked, so we can do root cause analysis, eliminate potential sources of defects, and even stop the line if needed.
Take, for example, our new expanded catalog. For a long time (over 25 years), we sold less than 30,000 SKUs, all related to office supplies. In the past year or so, we’ve rapidly expanded our assortment. We’re adding whole slews of products, one vertical at a time. For instance, we recently added hospitality, and retail. If you’re a business in those industries, you can now not only buy your office supplies from us, but anything else you need to run your business. You run a restaurant? Buy your cleaning supplies, cutlery, glassware, etc. from us as well.
We recently crossed 500,000 SKUs on offer, and are on track to cross 2 million soon, and over 5 million within a couple of years. The question, of course, is how to market these new products and to whom. Manually devising strategies to market to the right target audiences has its place, of course. At the Innovation Lab, we set our data scientists to work on this problem. By analyzing all available data on the millions of customers we already have, we’re able to figure out what industries a large number of them belong to. We can then automatically show them relevant new products when they log on, or when we send out promotional emails.
Even where we don’t have comprehensive information about our customers, we can computationally determine several things about them. For instance, can you guess the industry someone within an email address of firstname.lastname@example.org belongs to?
Another example is shipment delivery estimates. We already have a world class logistics platform, having been in the business of receiving orders, fulfilling them, and getting them out to our customers within one business day. As we expand our SKUs though, a larger and larger number of our products will be dropshipped by our vendor partners. The variability on these items is much higher, and the shipments tend to be slightly slower as well. By using historical data around inventory levels, handling times, and shipping carriers’ actual delivery tracking data, we’re able to predict when an item is going to reach a shopper with a very high degree of precision. By communicating this to our customers up front, we’re able to provide a much better experience online.
These are just examples of the several projects we have in the works here at the San Mateo based Staples Innovation Lab. Others include things like real-time selling price optimization, smarter personalized email content targeting, dynamic and personalized product bundles, hyper-personalized product recommendations, a new e-commerce search engine, and several others, for this year alone.
The path forward is clear – automation is the key, and algorithms will save the day :-)
P. S. – Watch for these project as they go live on Staples.com. And if you’re a technologist, interested in joining the journey we’re on, email me at email@example.com, or check out www.staplesinnovationlab.com