But losses mount for the home furnishings e-retailer that went public in October.
Retailers are turning to site personalization tools to get more intimate with customers.
Web site personalization is much like the dating process. Building a relationship between e-retailer and customers means getting to know what customers like and, equally important, dislike, then ensuring they get what they want.
If an online retailer can analyze customer data and use the results to offer products that a customer wants, sales will happen and the customer will keep coming back. And if there isn’t rapport between parties early on, there won’t be a second date.
E-retailers today are deploying or contemplating web site personalization technology tools to bond with customers and shoppers. In some cases, search and web analytics technology is helping e-retailers customize product presentations based on how a shopper enters a web site. In other cases, online retailers are mining customer behavior and expressed wants and needs to build product selections, or to omit products customers aren’t interested in. In addition, some e-retailers are asking customers outright what they want via onsite and e-mail surveys
Speaking to customers
“Our new personalization tools will let us greet customers and speak to them about their last purchases,” says Teresa Ide, director of e-commerce at online pet supply retailer Jeffers Inc. “Then we can suggest other products according to what they buy. We get opportunities to upsell and cross-sell by drawing customers in and that also supports our relationship.”
Web site personalization has been around as long as retailers have been selling products online, but its use is by no means universal. Preliminary results of the Sixth Annual Merchant Survey by The E-Tailing Group Inc. indicate most e-retailers aren’t plumbing the depths of web site personalization technology. Only 48% of 150 respondents are doing a “limited amount” of web personalization, while 32% said they greet returning customers by name. “It’s very rudimentary,” says Lauren Freedman, president of the Chicago-based research and consulting firm.
While most e-retailers agree that site personalization is important-another 34% plan to add the function in 2007, reports the E-Tailing Group survey-many place other e-commerce projects higher on their to-do lists. “E-commerce is all about prioritization,” Freedman says. “E-retailers have a lot to do and site personalization has not risen to the top.” Indeed, 15% of respondents said they have no plans to add site personalization.
Merchants generally agree that when they embark on web site personalization, it must go beyond the traditional “Welcome ‘Customer Name’” concept. And most e-retailers have every intention of going beyond the basic site personalization tools, says Chad Doiron, senior strategist at Kurt Salmon Associates, a retail consulting firm specializing in strategic planning and marketing. “We see them working to leverage the technology to their advantage and many are in the early stages of execution,” he says. “They now have technological capabilities to improve data management and the cleanliness of data to get valid analysis and input on customers, in order to make buying recommendations.”
Make a plan
For some e-retailers, site personalization technology is in hand, but not the plan for how it will be used. E-retailers that use web analytics to draw on customer buying data, for example, must decide how to use the data to construct specific promotions, Doiron says. “It’s not so much a technology question-whether they are able to do it-but it’s understanding what kind of offer they want to make,” he says.
For instance, e-retailers that base promotions on customer shopping history, which Doiron asserts not all of them look at, have to decide whether to extrapolate their perception of the customer’s intentions or just offer a shirt similar to what they bought before. “It comes down to a question more of what they are doing than what they want to do,” he says. “They have a database, computing horsepower, sales information and a historical perspective. They have to use those tools to decide the best offer to make and then execute it with the customer.”
Maternity apparel retailer DueMaternity.com, for example, is gathering data on its expectant parent customers with data mining, page registration and survey tools. When they return, the site remembers if they have unbought items in a shopping cart, automatically inserts name and address into the shipping form and presents personalized products, says Albert DiPadova, who co-founded the business with his wife Shannon in 2004. “We’re trying to go one step further and allowing customers to pick up where they left off,” he explains.
San Francisco-based Due Maternity has four stores in addition to the web site and it gathers online shopper data by asking shoppers to register. The company sorts customers by due date and tailors personalized messages and promotions according to before and after the baby is born. For instance, expectant parents might receive a message about skin care while a post-birth message would address nursing products.
Customers also can set up their own web pages by virtue of registering on the site. A template enables them to choose the baby’s astrological sign and build a countdown calendar with the baby’s name highlighted on the page. Another feature lets customers post photos to share with family and friends. The tools keep customers coming back and afford Due Maternity repeated opportunities to present special promotions available only to those registered.
The data mining tools to capture customer data were developed in-house by Due Maternity’s long-time freelance web developer, who worked with web page design tools from Yahoo. “Because Yahoo made its PHP technology available we were able to capture some individual information and store it,” DiPadova says. PHP is a scripting language tool used to pull information from a database and display it on a web page.
Personalization as a byproduct
Through its own efforts, Due Maternity was able to store and integrate customer data with Yahoo’s shopping cart technology. “Yahoo was surprised how far we’ve gone with it,” DiPadova says.
Due Maternity also recently began using MarketTools Inc.’s Zoomerang onsite customer survey technology. “That provides us very flexible survey templates and reporting,” DiPadova says. “And our own data capture provides us some basic marketing reports that help us better understand where our customers are coming from, such as online or from print advertising,” he adds.