October 8, 2015
Online has a long way to go to personalization
At a session Tuesday at Shop.org’s 2015 Digital Summit, Molly Baab, VP of product management at the flash site, Rue La La, lamented that most retailers efforts at personalization online are still largely limited to offers around past product purchases.
Noting the limitations of that approach, she said, "What I was interested in a couple days ago is not what I want now."
Other challenges to personalization highlighted by Ms. Baab included:
- Data issues: Having systems that "talk to each other well";
- Organizational challenges: Finding the permissions and protocol to make changes;
- Multi-dimensional consumers: Customers that "keep moving around" across platforms.
Source: ruelala.com
Regardless of the hurdles, Ms. Baab encouraged retailers to become a "little bit more relevant based on what we already know," including not only data on past purchases, but also page views, devices used and other factors.
Personalization can be broken down to implicit versus explicit attempts, she said.
Implicit communication may be a call-out, such as the return of a certain brand the member has bought in the past. Rue La La offers "secret sales" that are only available to certain members and relevant to their taste. The site also offers free-shipping relevant to items already in a member’s cart. Rue La La’s "What’s Trending" section is tailored to each member, although members often assume "everyone else is seeing the same thing."
Personalization could also be about acknowledging best customers. With explicit personalization, a member, for example, can choose to view only certain sizes across brands, or express which parts of a site they like to shop most.
Her six tips to for getting started were:
- Build a vision for the future, but start small;
- Begin with known customer segments and most important customer touchpoints;
- Consider third-party tools;
- Don’t go too complex;
- Don’t worry about having perfect data;
- Test everything.
Third-party vendors can drive quick insights to better gauge where to invest. She urged retailers to "start with the low-hanging fruit" while noting the temptation to layer too many messages on the consumer. Stressing continued testing, Ms. Baab said if, "You can’t see all the permutations of things; you can lose sight of what the lifts are."
Asked which websites excel at personalization, Ms. Baab said that, in her apparel space, Zulily is "killing it" with hundreds of versions of their home page and e-mails stocked with relevant selections.
"But I’m disappointed a lot of time," said Ms. Baab. "They don’t know me when I go there."
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Discussion Questions
Do you agree with Molly Baab’s advice to online retailers for improving personalization? What do you think is holding back efforts? What do you see as the “low-hanging fruit” retailers may be missing?
Poll
Some great advice for online retailers — particularly the advice not to worry about having perfect data and test everything. Most retailers fail at personalization because they don’t do enough data analysis or treat online as if it were an advertising platform and not a way to dialogue with consumers.
Amazon knows me when I go there. So does Overstock.com, Pottery Barn, Lamps Plus and many other home-related retailers that helped me furnish a newly built home in early 2014. So why do they all “personalize” offers to me in the fall of 2015 that continue to feature the very same products I already bought?
This is not called progress toward personalization. It’s called annoying. Where are these retailers going on the journey toward appropriate personalization? Clearly not in the direction of understanding and meeting shopper needs.
Very good perspective. This is just the latest top-of-mind challenge for online retailing. There are tools available, as she suggests, that take much or all of the guesswork out of this process. These tools have advanced significantly even in just the past six months from what I’ve seen. “Social merchandising” is a great way to personalize the shopping experience.
Agree with Molly. Main point — Start small. You do not to get personalization to the massive level by day one.
What is holding back retailers? Always the cost of change — financially and internal process issues. And the low hangers? Simplify the personalization areas. Start at the human-to-human point, like your customer service call-in teams and platform, then shift to online.
People-to-people is place number one to personalize.
There are some leaders doing a good job with personalization of the broader customer experience but there are a lot of retailers who are closer to the start of the journey. E-commerce pure-plays are further down the path than brick-and-click retailers, who tend to favor a coupon-based approach to personalization.
The key to personalization is to have an ongoing customer engagement intelligence platform that constantly learns from customer behavior, both purchase and non-purchase behavior, and updates customer profiles as the customer interacts with the retailer.
Customer preferences evolve over time and retailers need to understand those changes to remain relevant. Testing is then incredibly valuable in an e-commerce environment but the tests need to be designed, executed, analyzed and interpreted in an appropriate way to ensure the correct learnings are gathered.
There is a dramatic increase in online sales when the retailer can bring some level of personalization into the experience. While there are times that the customer doesn’t care about what he/she looked at the last time they were on the site, the majority of the time (overwhelming majority) it is appropriate to remind the customer what they showed interest in on a prior visit. If you don’t believe me, check out Amazon. To me, they are the ultimate case study.
Third-party technology will provide easier entry and lower cost into a high-end online experience.
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Some great advice for online retailers — particularly the advice not to worry about having perfect data and test everything. Most retailers fail at personalization because they don’t do enough data analysis or treat online as if it were an advertising platform and not a way to dialogue with consumers.
Amazon knows me when I go there. So does Overstock.com, Pottery Barn, Lamps Plus and many other home-related retailers that helped me furnish a newly built home in early 2014. So why do they all “personalize” offers to me in the fall of 2015 that continue to feature the very same products I already bought?
This is not called progress toward personalization. It’s called annoying. Where are these retailers going on the journey toward appropriate personalization? Clearly not in the direction of understanding and meeting shopper needs.
Very good perspective. This is just the latest top-of-mind challenge for online retailing. There are tools available, as she suggests, that take much or all of the guesswork out of this process. These tools have advanced significantly even in just the past six months from what I’ve seen. “Social merchandising” is a great way to personalize the shopping experience.
Agree with Molly. Main point — Start small. You do not to get personalization to the massive level by day one.
What is holding back retailers? Always the cost of change — financially and internal process issues. And the low hangers? Simplify the personalization areas. Start at the human-to-human point, like your customer service call-in teams and platform, then shift to online.
People-to-people is place number one to personalize.
There are some leaders doing a good job with personalization of the broader customer experience but there are a lot of retailers who are closer to the start of the journey. E-commerce pure-plays are further down the path than brick-and-click retailers, who tend to favor a coupon-based approach to personalization.
The key to personalization is to have an ongoing customer engagement intelligence platform that constantly learns from customer behavior, both purchase and non-purchase behavior, and updates customer profiles as the customer interacts with the retailer.
Customer preferences evolve over time and retailers need to understand those changes to remain relevant. Testing is then incredibly valuable in an e-commerce environment but the tests need to be designed, executed, analyzed and interpreted in an appropriate way to ensure the correct learnings are gathered.
There is a dramatic increase in online sales when the retailer can bring some level of personalization into the experience. While there are times that the customer doesn’t care about what he/she looked at the last time they were on the site, the majority of the time (overwhelming majority) it is appropriate to remind the customer what they showed interest in on a prior visit. If you don’t believe me, check out Amazon. To me, they are the ultimate case study.
Third-party technology will provide easier entry and lower cost into a high-end online experience.