Retailers shift their ad spending from TV, radio and print ads to digital ads.
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Personalization is extremely important because there are so many other merchants out there, says Bernt Ullmann, president of Phat Fashions LLC, which operates BabyPhat.com. “The consumer can choose to go to any number of brands. In this day and age, it makes a difference if we feel people or merchants care about us. And personalization is the most effective vehicle to show that you, the customer, are important to us. This fosters brand loyalty and repeat customers.”
YOU’ve got mail
While e-commerce site personalization can create the personal touch that leaves an impression in customers’ minds and make them want to return, another type of e-commerce personalization reaches out to customers to persuade them to pay another visit.
Segmenting e-mail list databases to the extreme, then producing very specific language, content and merchandising for the e-mail message to be sent to each segment has proven successful for many Internet retailers. Such is the case at HancockFabrics.com. The merchant is using relevance-driven marketing technology from MyBuys Inc. to generate personalized e-mails to repeat customers. It launched its new e-mail campaign, which includes an RSS feed, in August.
“We are doing back-in-stock and new item notifications for customers who have shown interest in such items. These focused e-mails have produced a 15% conversion rate for back-in-stock items and 7% for new items,” reports Daniel Fager-George, senior manager of online services at HancockFabrics.com. “We had to place a little bit of extra code on our web site, automate the language and use basic text links in product descriptions to achieve all this. But this work enables customers interested in an out-of-stock or new item to simply click on the embedded link and sign up for a notification based on their preferred form of communication, e-mail or RSS feed. They then will receive a notification as soon as their item is in.”
This kind of personal, customer relationship and service, which many shoppers feel is so lacking in stores today, is something that eventually could set e-commerce apart from its sister sales channels. The bottom line: It is something that, to one degree or another, is expected by customers-whether they see it or even whether they are unaware because it is operating behind the scenes-when visiting an e-commerce site, asserts Gene Alvarez, vice president of CRM and e-commerce at researchers Gartner Inc. Alvarez specializes in e-commerce site personalization.
“At bare minimum today, when you log onto a site you better be presented with a hello in front of your name. But that is barely personalization,” Alvarez says. “True personalization is contextual relevance. If I’m a time-over-money shopper, I want things that help me better understand and qualify products very quickly. Conversely, if I am a discount shopper, I always want to know what promotions are running along with some recommendations. These are much more personalized experiences for me than birthday reminders.”
Ultimately, of course, personalization efforts-be they e-mail, site experience, blogs, social networks or any number of other possibilities-must lead to business improvements to justify their existence.
So virtual personal shopping assistant Laurie over at Casual Male XL better get moving.
“Tangibly, our personalization efforts must increase the number of times a customer shops online with us within a year; that will increase our market share. And we want to get more spend from people on an annual basis,” says CEO Levin. “Intangibly, we want to make customers happy, make them feel special-this is his personal place to shop, and he’s being treated with TLC. This is what will differentiate us from everyone else in our market.”
CRM not as easy as it sounds
Personalization and CRM have more than just the customer in common-they both share a similar history. Just a few years ago the industry was abuzz about customer relationship management software and how retailers could implement it and quickly make customer service more helpful and effective. But the buzz died and CRM seemed to have disappeared. It turned out many retailers simply weren’t sure about CRM.
While retailers know managing relationships with customers is fundamental to long-term success, many today haven’t yet decided whether making an investment in technology is the answer to helping them manage interactions with customers. And for those merchants who have begun formal, technology-driven CRM efforts, they’re coming to terms with the fact that CRM requires much more than installing software and rebooting. For them, the realization has begun to hit that CRM is much more than just software in a box. It actually is a collection of strategies, processes and techniques that encompasses marketing, sales and customer service-and it all is fueled, not wholly cured, by the information technology.
“You simply can’t suddenly say, ‘Hey, let’s buy a CRM solution,’” says Jeff Roster, vice president of retail industry market strategies at Gartner Inc. CRM today is in what Roster calls the “trough of disillusionment.”
“After the initial noise and unrealistic expectations faded away, retailers began to work on CRM and found that it is not as easy as it sounds,” he says. “Now they’re winnowing away at the hype and looking for value. If there is value, it will rise out of the trough; if not, it will fall off the charts.”
The level of noise about CRM remains very low because the retailers who have decided to pursue it still are working on it-there simply is not much to talk about yet, Roster adds.
Retailers that opt to work on CRM will succeed, and save money on I.T. investments, by first determining precisely where they need the help of the processes and technologies, says Zachary McGeary, associate analyst at JupiterResearch. “All interactions with customers are critical to managing customer relationships,” he states. But all retailers are not the same, and all retailers do not have the same strengths and weaknesses, he adds.