There have been plenty of buzzwords tossed around this year from disruption to omnichannel. Underscoring each of these directives remains a central issue, though: The customer and her engagement with the brand.
As companies scramble to keep pace with shopper expectations while also upping their consumer engagement game, customization become key. Dynamic Yield, a personalization operating service, has helped guide clients such as Under Armour, Sephora and LaModa to implement initiatives to better align with their shoppers — and reap the reward. Liad Agmon, cofounder and chief executive officer of the company shed insights into how personalization will be an integral component as the see-now-buy-now craze continues, pitfalls retails should avoid and advancements of the feature.
WWD: How will personalization play a role in a brand’s shift toward see-now-buy-now models?
Liad Agmon: There are two types of customers: Customers that have formerly shopped with the brand and the customers that arrive [to an e-commerce location] anonymously. For existing customers, brands should have prior information to deduce their behavior and purchasing habits to conclude their preferences.
The biggest mistake retailers make: they don’t ask. If you go to a brand like Tory Burch, wouldn’t it be great if the shopper were asked if she was interested in fall or spring or the collection currently on sale? Just by asking a single question, very important information can be compiled. The customer knows that their experience will be better by answering questions as well. Customers currently have to do all the work to sift through product pages [to find a specific product]. Why not ask guided questions to have a better user experience? Higher relevance equals more sales.
WWD: It was recently released that one of Dynamic Yield’s clients, LaModa achieved an $11 million increase in gross revenue after implementing personalization strategies. What specific actions drove this hike in earnings?
L.A.: LaModa created segments based on all aspects of data available — site behavior, geography, past purchase history by on-boarding their CRM data, and product affinities. After defining the segments, they deployed the right message, content and offers to each of these segments in order to increase revenue.
They also personalized the category page based on affinity. The category page is one of the most important pages in the shopping process because it aids in discovery. They realized they needed to make sure that each category page was tailored to each user. They used the user’s affinities to customize the page, which our system learns based on their behavior on the site. Additionally, LaModa smartly nudged idle visitors by displaying reviews of the products they were viewing. They used coupons during micro-moments — say, when somebody is on the checkout page — to increase conversion as well.
WWD: How is personalization functionality developing? What’s next?
L.A.: Personalization is still very nascent. One of the most underappreciated channels is the mobile web. For many retailers, we see more than 50 percent of the traffic come from the mobile web — smartphones and tablets — but less than 15 percent of the conversions. Retailers are finally realizing that they are leaving money on the table and are focusing their efforts in increasing the personalization on mobile web.
As personalization capabilities become more and more robust, machine learning and artificial intelligence will play an even bigger role. It will predict the segments you should focus on, it will recommend the personalization experiments you should deploy, it will auto-correct in real-time to ensure that you get the best results.
Companies will adopt a single personalization brain or engine to drive across all channels. Today that’s unfortunately not the case and many marketers struggle because of that. The result of using a single personalization engine is that you will start seeing more continuity and coherence in all the devices that consumers use.
WWD: What should retailers consider as they integrate personalization into their digital platforms? What are key pieces of advice you’d share to companies taking this step?
L.A.: The progressive retailers are smartly using their data. They are on-boarding all available data about their users that might exist in multiple systems like CRM and unifying it with site behavior and context data to really develop a robust view of their customers. We see this trend accelerating.
As you think of personalization, take stock of all the systems that you may have customer data stuck in. And put them to use.
Secondly, some retailers operate under the misconception that they don’t have data about their users or that they are not a data-rich organization. Almost all e-commerce companies today have a wealth of information about their users based on their site visit behavior, third-party information, context information and more. The trick is to use systems to actually capture it and put it to use.
Operate like a technology company. Amazon has set the gold standard in personalization — they have invested heavily in this technology. Netflix estimates that their personalization engine adds $1 billion worth of value. Facebook has, at any given point of time, hundreds of concurrent A/B tests running all with the purpose of increasing relevance and thereby engagement.
Adopt a culture of testing and experimentation. Act like technology companies in your thinking, culture and hiring.