Target and Toys R Us posted overall sales declines during the holidays.
Personalization software, which recommends products based on customer’s tastes and needs, is becoming standard equipment for online merchants who want to remedy the lack of human salesmanship that can close an online sale. Web sites increasingly are becoming stores customized to a shopper’s interests and previous purchases. Even e-mail marketing is taking a more personal touch. Customer service technology vendor FaceTime Communications and e-mail marketing firm Digital Impact offer a service allowing merchants to send highly targeted promotions that link customers directly to a live rep who can give more details and, it’s hoped, close the sale.
In June, Sears Roebuck & Co. began using PersonalGenie, a prototype developed by an application service provider, in hopes of boosting incremental sales on Sears.com. The feature, which uses Sun Microsystems’ Jini technology, builds customer portraits using their responses to questions about shopping preferences and past purchasing patterns. The data is run through algorithms that suggest products customers are likely to buy. “Consumers favor retailers that can edit product selection to fit their needs,” says Sears vice president William Kenney. “The more you know about a customer, the better your ability to offer products that work immediately for them.”
To minimize losing customers who see recommendations as irrelevant annoyances, personalization vendors are improving their products to become more intuitive with each customer visit. Leading vendors include BroadVision, net.Genesis and Net Perceptions. Analysts urge e-retailers to build customer databases from multiple sources to raise success rates. “Setting the rules by which suggestions are made is tough,” says Cassandra Millhouse, lead analyst with Ovum Inc. “Customer analysis is learning, but once you learn what customers want, the odds of keeping them through the transaction process are better.”