January 19, 2005, 12:00 AM

Web personalization will come back and change retailing, experts say

Although it failed to meet its early dot-com era promises, web site personalization is making a gradual comeback and will fundamentally change the way online retailing operates, executives of Best Buy and Liz Clairborne said at the NRF show this week.

 

Although it failed to meet its early dot-com promises, web site personalization is making a gradual comeback and will fundamentally change the way online retailing operates, executives of Best Buy Co. Inc. and Liz Clairborne Inc. said at the National Retail Federation`s Redefining Retail conference this week.

“The whole paradigm of how the web works will change,” Dave Towers, vice president of e-commerce at apparel company Liz Claiborne, said in a panel discussion titled “State of Online Retailing.” “The whole notion of the Internet being just reactive will change to proactive and flip retail 100%.”

Sam Taylor, senior vice president of online stores and marketing at Best Buy, said personalization is already starting to reverse its early reputation formed in the late-‘90s, when its ability to serve consumers and drive up online sales was over-promised by technology companies and retailers. “The role of the web helping consumers got a black eye with personalization’s unmet expectations years ago, but over the next 10 years retailers will figure it out,” he said.

Retailers may have no choice, Taylor added, because consumers have said they want a more personalized online shopping experience. “People want us to know who they are and recommend products,” he said.

But the evolution toward effective online personalization will not be easy, Taylor said. Best Buy is experimenting with several methods, including taking cues from in-store merchandising. Best Buy is testing merchandising strategies in 67 stores that focus on two of five customer segments: the suburban mom, the family man on a budget, a higher-income male, early adopters who want the latest technology, and the small business owner. Best Buy identified the segments through a customer survey that used a sweepstakes to encourage participation. Lessons learned in how to market to these segments will help in devising ways to offer more personalized shopping online, Taylor said.

“We’ll identify more and more segments,” Taylor said, “but we’re just scratching the surface.”

Towers added that personal computers as well as web sites will become better at personalization by remembering, organizing and presenting information on a consumer`s shopping preferences. "It`s an exciting time to be in retail," he said.

 

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