The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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Technology in the personalization market remains in its infancy, with work still to be done in the areas of data integration and the scalability of applications. And the full value of the technologies will only be seen when retailers personalize the entire online experience, rather than just the content customers see, according to Forrester Research.
That's a goal of many retailers. With N2K and CDnow merging their online platforms into one combined store under the CDnow banner, personalization will be key to as the stores expand together. "We'd like to have the entire store be personalized," explains Evan Schwartz, CDnow's director of product management. "If you go to Pearl Jam's discography page, we want to show you the Pearl Jam records in the order we think you'll want to see them. So every single page in the store will be personalized just for you-the merchandizing, the content, the advertising-everything you see."
Because the technologies are new, companies are still experimenting with personalization. Last year, American Airlines launched a new site featuring a highly touted personalization program for its frequent flier plan members using technology from BroadVision Inc., Redwood City, Calif. "We have a million questions we are just starting to address," admits John R. Samuel, managing director of interactive marketing at American Airlines, Dallas. "For example, how often do you show somebody something that they haven't clicked on? Do you quit showing it to them? If they do click on it, do you allow them to save it someplace?"
Even so, American already is seeing benefits. "What we wanted to hear from customers was that the information we are now providing is relevant and more useful," Samuel says. "Our top-tier members come back to the site once a week. We're pretty pleased with that. We think it means they are receiving useful information."
N2K has enjoyed sales from a program that sends highly targeted e-mail to people who have asked to be notified when certain new CDs come out. Up to 30% those recipients return to the site to buy the CD, Pakman says. That compares more than favorably to typical scenarios in which less than 5% of visitors actually purchase something at a Web site. "The measurable benefits are in the form of a better relationship with the customers," he adds. "Our customers come back more often and are more satisfied."
Customers like the attention personalization technologies offer, says Backyard Nature's Marc Lemke. "They really want to know someone is on the other end taking care of them."