Transcript Document

800.416.4959/CODE: 693666
Today’s Speakers
Housekeeping…
• How to get “The Executive Guide to
Captivating Customers” White Paper
 All attendees will receive via email
 Available to download on the MyBuys website
• This Webinar will be recorded and available
for viewing on the MyBuys website
MyBuys – The Personalization Experts
Why MyBuys Commissioned This Research
To uncover the gap between
consumer demand for
personalization and current
merchant execution
About the e-tailing group
 14 years e-commerce consulting
 Author, It’s Just Shopping
 50+ years traditional retail and catalog experience
 Fortune 500 client projects ranging from strategic planning,
merchandising, marketing, to technology development and
messaging
 Proprietary research studies on mystery shopping and
merchandising, marketing and EMC (Evolving Multi-Channel
Consumer), In-Store Pickup and Gift Registry
 e-Commerce expert and frequent speaker at industry events,
trade associations
Today’s Agenda
I.
The Consumer Point-of-View
II. The Merchant Perspective
III. The e-tailing group Personalized Product
Recommendations Checklist
I. The Consumer Point-of-View
Consumer Survey Objectives
• To understand how consumers value
personalized shopping across channels
• To learn how purchases are impacted when
there is a personalized shopping experience
• To see how email can be effective as both
customer service and promotional when
personalized based on past purchases and/or
preferences
Methodology – Demographics
Online survey of 1,345 adults who shop online 4+ time annually,
spending $500 or more via the Internet
Gender
63%
37%
Female
Male
Age range
12%
28%
30%
30%
25-34
35-44
45-54
54+
HH with or w/o Children
62%
38%
None
Presence of
Children
HH Income
•
4% Under $25,000
•
4% $25,000 - $35,000
• 10% $35,001 - $50,000
• 23% $50,001 - $75,000
• 21% $75,001 - $100,000
•
5% More than $100,000
•
5% Prefer not to respond
Education
•
8% High school graduate
• 23% Some college; no degree
• 35% College graduate
•
9% Some graduate school
• 25% Post-graduate degree
Overview of Consumer Feedback
•
Shoppers want - and expect - more personalized online shopping
experiences based on past purchases and behavior
•
Personalized product recommendations are convenient, save time and
help shoppers make better choices
•
Shoppers perceive that the Internet is the channel where they are best
known and receive personalized recommendations yet merchants do
not know shoppers as well as they should
•
Shoppers are “significantly to somewhat” more loyal to a retailer that
provides them with a personalized online experience
•
Personalized product recommendations are valued throughout the online
shopping experience
•
By improving the personal relevance of related products shown,
merchants have an opportunity to gain incremental sales
The Consumer Point-of-View
For greater convenience and time savings, shoppers
want - and expect - more personalized online shopping
experiences based on past purchases and behavior
Which of the following best describes your feelings about personalization online?
Check all that apply.
I expect that my shopping cart would be saved for future visits so that I don’t have to go
to all the trouble to find the products I had previously selected.
66%
I expect that my shopping experience online would be personalized based on past
purchases.
39%
Greeting me by name is nice, but I would like to see more of a personalized shopping
experience based on past purchases and behavior when I visit a website.
30%
I want my shopping experience online to be more personalized so it saves me time when
making purchase decisions.
30%
I would be willing to provide personal information in exchange for a more personalized
shopping experience.
19%
The Consumer Point-of-View
75% will trade privacy for personalization. 40% of
shoppers have no privacy concerns; 35% enjoy
receiving personalized recommendations although they
consider them somewhat invasive but still enjoy PPR
How would you rate your feelings regarding any potential privacy concerns when
receiving personalized product recommendations?
I have no privacy concerns.
40%
It feels somewhat invasive but still enjoy seeing the personalized
recommendations.
35%
It feels invasive and would prefer not to see such recommendations.
14%
I am somewhat turned off from shopping at that retailer.
7%
I am completely turned off from shopping at that retailer.
3%
The Consumer Point-of-View
Merchants do not know shoppers as well as they
should as 39% scored favorite merchants 5 or less on
a “ten-scale”
On a scale of one-to-ten how well do your favorite merchants know
you as a customer where ten implies they know you extremely well?
20%
19%
18%
14%
8%
5%
5%
3%
3%
one
two
three
four
five
six
seven
eight
nine
4%
ten
The Consumer Point-of-View
Shoppers perceive that the Internet is the channel where
they are best known and receive personalized
recommendations
Comparing online to store-based selling, which of the channels where you
shop typically knows you best? Rank 1-4 where 4 is the channel that knows
you best and makes recommendations tailored for you.
CHANNELS
Internet
Store
Catalog
TV Shopping Network
Knows
you best
Knows
you least
4
3
2
1
45%
18%
6%
31%
17%
37%
37%
9%
13%
30%
48%
10%
25%
16%
9%
50%
The Consumer Point-of-View
81% of these shoppers find value in truly personalized
products on a site because they are convenient,
save time and help them make better choices
How do you typically react when you see products that are truly
personalized for you on a website? Check all that apply.
Personalized product recommendations are convenient and
save me time.
Personalized product recommendations allow me to make
better choices.
I never notice products that are personalized during my web
shopping experience.
24%
21%
19%
I find them helpful and often make a purchase.
13%
I find them valuable and make a purchase once in a while.
37%
I find them valuable but don’t typically make a purchase.
34%
The Consumer Point-of-View
77% of the time a merchant’s personalized
recommendations result in additional product
purchases
Beyond the product you bought, how often do you
purchase an additional product based on a
merchant's personalized recommendations?
56%
19%
18%
6%
2%
All the time
Some of the time
Once in a while
Never
Never noticed
The Consumer Point-of-View
Over 1/3 (36%) of shoppers are “significantly to
somewhat” more loyal to a retailer that provides
them with a personalized online experience
When receiving a personalized experience from an online retailer
how much impact does that have
on your loyalty to that particular retailer?
40%
27%
24%
9%
Significantly more loyal
Somewhat more loyal
Mixed bag depending
on current needs
Not necessarily more
loyal
The Consumer Point-of-View
89% of these shoppers feel that products suggested
on a site are specifically tailored for them only
some of the time or once in while
How often do you feel that the products suggested on a website
are tailored specifically for you?
49%
38%
2%
All the time
Some of the time
Once in a while
5%
5%
Never
Never noticed
The Consumer Point-of-View
Shoppers indicate it is ”very to somewhat valuable”
to receive personalized product recommendation
in each of these website locations
Personalized Product Recommendations Ranked Very Valuable,
Valuable & Somewhat Valuable (5-3)
Product pages
76%
Personalized home page
75%
Category page
74%
Shopping cart
70%
Order confirmation
67%
Shipping confirmation
65%
Brand page
63%
Email with product recommendations specific to past purchase
62%
Email after purchasing a product asking for a rating and reviews
61%
Thank you page after checkout
55%
The Consumer Point-of-View
By improving the personal relevance of related
products shown, merchants have an opportunity
to gain incremental sales
When you are shopping on a merchant’s product page or in the shopping cart, which one
of the following has typically been your experience when you see “Customers who
bought this product also bought these products?”
I usually peruse those products and once in a while purchase one of them.
I have looked at those products in the past and they don’t seem to be the
types of products I would consider buying.
I don’t look at those products because they’ve never been on target in terms
of products I would likely buy.
I purchase a lot of gifts online and am not often interested in buying additional
items at that time or in the near future.
I usually peruse those products and always purchase.
53%
23%
11%
10%
2%
Placement – Personal Home Page
Amazon Educated
Shoppers About
Personalized
Product
Recommendations
Placement – Product Detail Page
“More Great Finds”
•You may also like
• Top sellers
• New
• Great choice
Placement - Category Page
Captivate
customers
immediately in
the category
page
Placement - Brand Page
Customized
selection of
branded
goods
Placement - The Shopping Cart
Fuel last-minute
impulse buys
This Season’s Essentials
You Might Like/Deal of the Day
The Consumer Point-of-View
Post-order, shipping and order confirmations are where
shoppers most value receiving personalized recommendations
Post-order, how valuable is it for you to receive personalized recommendations within each of
the following communications?
Very
valuable
Valuable
Som ew hat
valuable
Not very
valuable
Not at all
valuable
Shipping confirmation
40%
12%
13%
17%
17%
Order confirmation
39%
14%
14%
17%
16%
Thank you page after checkout
11%
16%
28%
25%
20%
10%
16%
35%
21%
17%
9%
15%
38%
22%
16%
COMMUNICATIONS
Email after purchasing a product asking for
a rating and reviews
Email with product recommendations
specific to past purchase
Placement - Order Confirmation and Thank You Page
Merchandised for
incremental sales
Placement - Shipping Confirmations
Sell and
support
opportunity
Placement – Post-Order Merchandising
Specific
coordinating
product sent
via email
The Consumer Point-of-View
Personalized email alerts are powerful tools
that can broaden perceptions and increase sales
What is your perception when receiving an email alert to let you know about products/
promotions tailored for you or for backordered products you previously attempted to
purchase? Check all that apply.
I believe this kind of communication is much more valuable than a generic
promotion likely sent to all customers.
37%
I sometimes respond to these emails purchasing one or more of the products.
34%
I respond the same as general communications.
30%
I always open these kinds of communication.
24%
This retailer is customer-centric and truly provides a service.
17%
I always respond to these emails purchasing one or more of the products.
3%
Asking Customers What They Want
Favorites by
• Category
• Sub-category
• Brand
Personalized Email Alerts
Taking
advantage of
profiling by
promoting new
products based
on preferences
“Beauty Bye-Byes”
online-only
clearance
Ratings and Reviews Email
Rate This
Product
*****
Bring them back to
buy more
The Consumer Point-of-View
Shoppers want personalized experiences across
channels, yet 78% are only encountering them
“some of the time” or “once in a while”
How often do you encounter retailers who provide personalized
experiences in their stores, online and/or from their call centers?
49%
29%
14%
5%
4%
Most of the time
Q14
Some of the time
Once in a while
Never
Indifferent
The consumers have clearly set a high
bar for the merchant community
To exceed their customer’s expectations
merchants must decide how to tackle the
challenge of providing best-of-breed
personalization
II. The Merchant Perspective
The Merchant Perspective
Over half the merchants still do not know how much
up-sells and cross-sells contribute to overall revenue;
for the most part known contributions remain under 7%
What percent of revenue are your up-sells and cross-sells
contributing to overall revenue?
50%49%49%51%
8%
6% 6% 7%
Less than 1%
9% 9%11%
13%13%12%12%
14%
11%9%
10%
5%
1-2%
3-4%
8%
5-7%
2008
2007
2006
5%
8%
5%
8-10%
2005
e-tailing group 7th Annual Merchant Survey
6%
4% 5% 5%
Greater than
10%
Don't know
Cross-sell/Up-sell and Personalization
Have Not Yet Reached Top Priority Status
What initiatives are you planning to improve website performance?
Check all that apply.
71%
More targeted email programs
67%
66%
Site redesign/upgrades
65%
Adding or improving onsite search
65%
68%
Enhanced onsite merchandising features
58%
55%
Cross-sell/up-sell
55%
Content development
54%
Adding customer-generated content*
43%
Overhauling shopping cart
Gifting features
36%
35%
Product enhancement tools/Rich media
36%
30%
32%
Enhancing customer service
28%
Interactive tools
2008
2007
Product
enhancement
& Rich media
36%
30%
International sites
19%
11%
62%
47%
New Metrics:
38%
32%
28%
30%
Analytics package
New backend systems*
26%
Increased personnel
26%
New technology platform*
26%
34%
22%
21%
Tools that automate functionality
11%
19%
2008
the e-tailing group 7th Annual Merchant Survey
Q3 * New metric
Growth areas:
41%
42%
Personalization
International sites
70%
76%
2007
Adding customer
generated content
54%
New backend system
26%
New Technology
platform
26%
Merchant Survey & Objectives
24 merchants completed a 10-question survey;
facilitated through personal interviews
Goal
• To explore the merchant perspective on personalized
product recommendations:
•
•
•
•
•
•
•
Implementation
Current methodologies
Outsourced technologies
Retention
Budgets
Techniques
Performance rankings
24 Participating Merchants
A cross-section those who scored high in cross-sell/ up-sell contribution*
as well as successfully demonstrated personalization efforts online
•
•
•
•
•
•
•
•
•
•
•
ABT Electronics
Barneys
Boston Proper
Coach
Cost Plus – World Market
Danskin
Decorative Product Source
GSI
HP Home & Home Office
Intermix
Lucy
* The e-tailing group 7th Annual Merchant Survey, 1Q ‘08
•
•
•
•
•
•
•
•
•
•
•
Massey’s
Orvis
Palm Beach Jewelry
Patagonia
Pendleton
Petco
Rugs Direct
Stacks and Stacks
Staples
Wine Enthusiast
Wirefly
Overview of Our Merchant Findings
A large, unrecognized potential exists for merchants who captivate
customers by employing technology to close this personalization gap
•
High awareness levels coupled with resource-strapped merchants make the
opportunity one merchants must research and understand thoroughly
•
Merchants perceive there has been an evolution and maturity to the software
solutions available in today’s competitive marketplace
•
Current personalization strategies center on manual efforts where processes
accommodate unique merchant requirements
•
The most significant benefits from mimicking the in-store experience in the online
realm are increased sales, increased customer loyalty and improved overall
customer satisfaction
•
Merchants are more open to solutions that would be easy to test on a small scale
and then quickly “flip the switch” to full-scale implementation
•
Merchants want assurances that the personalization technology they adopt goes
beyond merely helping with customer acquisition, but rather ensures long-term
retention of the customer
Times are Changing
Personalized product recommendations are more
feasible with technology serving as an efficiency model
“We desired a plug and play approach…prior to testing one
of these tools we were doing everything manually and it was
a huge drain on resources.”
“A great deal of expertise is required to deliver optimal levels
of personalization and leveraging the expertise of partners
is often a preferred practice.”
“For us it’s like a spy book on the site where we can pick up
on customer interests, including past history and current
behavior.”
The Technology Has Matured
“While these tools have been around for several years, I feel that they have only started to
mature in the past 12-18 months. I strongly believe that they can affect the end user
experience by directing more relevant product.” “At the end of the day, the data is there,
those who execute will monetize”
Optimal Merchant Criteria
 Larger SKU counts
 Broad assortment
 High turn
Better Customer Experience & Increased AOV
“I like the idea of technology helping us increase the average order size while
simultaneously creating a better customer experience. An accessory may make the
difference in our low margin business and we need a service in place.”
The Bottom-Line
 Larger basket size
 Overall site revenue
 Customer loyalty
Higher Open Rates with Personalization
Techniques for alerts
 Back-in-stock
 On sale
 New
79% of Personalization is Done Manually
Current Personalization Strategies
% Merchants
100%
79%
80%
62%
60%
40%
21%
12%
20%
0%
Manual hard
coded
Internal, Top
Sellers
Other Internal
Strategy
Technology
Provider
“We take a manual approach where recommendations are hand-selected by the
merchant team for each product; applying our own business rules to these
merchandising efforts based on internal know-how. Despite such a manual approach,
we have good success with average orders containing 3-4 units.”
“Our process is to load product until the next season, which is typically six to
eight weeks. We don’t really go in and make adjustments because for us there’s a
point of no return.”
Obstacles and Challenges
“It is difficult to manage our assortment manually; we have tested automated
versus manual and automated wins out and could even get better if we weren’t
constrained by our vendor and category rules. “
In-house mindset
Significant technology investment
Belief that such efforts can be
accomplished with existing technology
Top Retention Tactics
 Email
 Catalog and direct mail
 Customer service as a differentiator
 Assortment
 Promotions
 Loyalty programs
 Paid search
 Affiliate programs
IV. Personalized Product Recommendations
Checklist
Personalized Product Recommendations Checklist
 Prioritize personalized product recommendations as one of your key 2008 initiatives
 Determine the level of automation and number of touch-points to address
 Do your homework in advance, setting clear expectations with potential vendor partner
 Define PPR’s potential from an acquisition as well as a retention point of view
 Identify onsite and email requirements
 Understand how these technologies will integrate with and impact current systems, and
determine if the vendor offers ongoing support and optimization services
 Know your business and the unique requirements of your brand, your category and your
customers
 Test a series of recommendation placements on your site to understand contribution to
the bottom line
 Evaluate email alerts and the role they can play in returning shoppers to buy
 Put the tools in place to ensure accurate attribution
III. And Now, a Word from Our Sponsor
79% of Cross-selling is Done Manually
This is where MyBuys can help you!
Select MyBuys Clients and Retail Categories
Apparel
Hobby &
Electronics
Footwear
Home &
Garden
Cosmetics &
Jewelry
Sporting
Goods
The Benefits Our Clients Enjoy
Massey’s – Challenges
• All recommendations were
static
• 85% of emails went
unopened
• 50% of carts were
abandoned
• Wanted to replicate instore ambiance of
personal service
The Solution – Get to Know Each Customer
Massey’s Results
Austad’s Challenges
• 12+ hours a week of extra
programming for manual
cross-sells
• E-mail open rate 15%
• Market demands customer
retention since universe finite
The Solution – Promote Sale Items
Austad’s Results
Q&A
Lauren Freedman
President
the e-tailing group, inc.
1444 W Altgeld Street
Chicago, IL 60614
Phone: 773-975-7280
Fax: 773-871-3528
Email: [email protected]
Web: www.e-tailing.com
Lisa Joy Rosner
Vice President, Marketing
MyBuys
One Lagoon Drive, S.120
Redwood Shores, CA 94065
Phone: 650-591-0210
Fax: 650-591-0173
Email: [email protected]
Web: www.mybuys.com