Retailers shift their ad spending from TV, radio and print ads to digital ads.
The great thing about the Internet is that it makes gathering information so easy. Post a survey on an e-retailing site and the data will soon follow. But then the real work comes: Using the data as a selling tool.
Collecting data-even in a voluntary, consumer-does-the-work mode-costs money. And making sense of the data costs even more money. Inasmuch as converting a web browser to a web buyer is a measure of success, so too is converting consumer data into increased sales. And with today’s pressures on profitability, an e-retailer can’t afford too spend money on something that will not generate returns.
NaturElle Cosmetics Corp.’s NaturalBeauty.com has found that gathering the data and making sense of it are worth the investment.
NaturalBeauty.com has been gathering information on customers since 1994, then using the information to make product recommendations via e-mail. In February, it converted to an automated system whereby customers fill out a survey at the web site and get an instant list of recommendations based on their responses.
NaturalBeauty achieved immediate results: Repeat buyers since February have increased 20% and those who receive online recommendations are spending nearly twice as much as other customers.
NaturalBeauty.com created a system to give personal beauty advice that uses a 23-question online survey to gather customer data. The system instantly provides three groups of product recommendations tailored from the data. Those recommendations come from a pool of 2,500 proprietary products the company makes and sells.
The online consultation asks women skin type (oily or dry), hair color, skin tone, preference of clothing color and type and ideal look (using a famous person as a benchmark). “It gets very specific,” says Telluride, Colo.-based NaturElle President Mike Lapp. “For instance, it asks if there is a halo around the pupil of the eye.”
The system uses the responses to form personal makeover, eye shadow and skincare recommendations. The recommendations tell a woman which shade of lipstick is best for her in casual, romantic or professional settings. A woman learns which shades of eyeliner, mascara and eye shadow are best suited for her complexion. She also receives a list of recommended skincare products and techniques based on her skin type.
The company developed 80 templates of recommendations based on the different possible criteria from the questions. After a customer clicks the survey’s submit button, the system automatically scans the responses and seconds later brings up the three appropriate recommendation templates. Links to all the recommended items make it easy for users to act on the advice. “It’s a very advanced type of search tool,” Lapp says.
NaturElle is parlaying all this personal information into increased ticket sizes, increased loyalty and increased sales. “The survey is meant to retain customers; once they fill out that survey, we will have the ability to retain them for years,” Lapp says.
The company began giving online consultations in 1994. Before February, NaturElle manually sent email responses to those who completed the survey. The response is now automatic and appears as a pop-up page on the web site. NaturElle updated the site again in October, giving the survey more prominence on the home page. This, Lapp says, should increase the number of women completing the consultation and buying recommended products. There will be no questions about where to find the survey, he adds.
Response to the online consultation started out slow, but has been gaining steam as the site improves. So far, about 10,000 women have completed the online consultation; 4,000 since the system was automated in February. “Not a lot of people have filled it out so far, but we haven’t done any marketing yet,” Lapp says. But with the automation and new site design in place, the company will increase marketing to drive more women to the site and the consultation. “Pretty soon we will start promoting the heck out NaturalBeauty.com,” he says.
Since February, repeat customers increased 20%. The online consultation is also boosting the average ticket: for those who complete the survey, $85 to $100 vs. $50 for those who do not. The site gets about 5,000 unique visits per month, and about 600 of those visitors make purchases. On average, 130 women take the online consultation each month and 100 of them (77%) buy some of those recommendations.
Profile and behavior
The survey works to complement the company’s proprietary product line. Most cosmetics sites offer several brands, Lapp says. “We can develop logic to a particular type of product and make it more specific to each consumer, rather than (worrying about) making all the brands happy and not upsetting the apple cart,” he says.
NaturElle created the logic (matching submitted characteristics with product recommendations) behind the system in-house. ROI Direct, San Francisco, maintains an Oracle relational database, hosts the site and the logic programmed into the consultation, and captures the response data. ROI also uses the data to provide campaign management and data analysis capabilities for marketing.
“The focus is to create a very customer-centric view, so the information we collect through the consultation will be appended to any transaction they make in the future; we will not only get a profile look at the consumer, but a behavioral look as well,” he says.
Women visiting the site can become members and have access to their previous recommendations. Before, if a woman wanted to keep her recommendations, she had to save them on her computer or print them. NaturElle expanded the system’s capacity in October so it can use the survey data to cross sell to customers based on their skin tone or eye color.