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800.416.4959/CODE: 693666. Todays Speakers Housekeeping … How to get The Executive Guide to Captivating Customers White Paper All attendees will receive.

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Presentation on theme: "800.416.4959/CODE: 693666. Todays Speakers Housekeeping … How to get The Executive Guide to Captivating Customers White Paper All attendees will receive."— Presentation transcript:

1 /CODE:

2 Todays Speakers

3 Housekeeping … How to get The Executive Guide to Captivating Customers White Paper All attendees will receive via Available to download on the MyBuys website This Webinar will be recorded and available for viewing on the MyBuys website

4 MyBuys – The Personalization Experts

5 Why MyBuys Commissioned This Research To uncover the gap between consumer demand for personalization and current merchant execution

6 About the e-tailing group 14 years e-commerce consulting Author, Its 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

7 Todays Agenda I.The Consumer Point-of-View II.The Merchant Perspective III.The e-tailing group Personalized Product Recommendations Checklist

8 I. The Consumer Point-of-View

9 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 can be effective as both customer service and promotional when personalized based on past purchases and/or preferences

10 Gender 63%Female 37%Male Age range 12% % % %54+ HH with or w/o Children 62%None 38%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 Online survey of 1,345 adults who shop online 4+ time annually, spending $500 or more via the Internet Methodology – Demographics

11 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

12 For greater convenience and time savings, shoppers want - and expect - more personalized online shopping experiences based on past purchases and behavior The Consumer Point-of-View

13 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 The Consumer Point-of-View

14 Merchants do not know shoppers as well as they should as 39% scored favorite merchants 5 or less on a ten-scale The Consumer Point-of-View

15 Shoppers perceive that the Internet is the channel where they are best known and receive personalized recommendations The Consumer Point-of-View

16 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 The Consumer Point-of-View

17 77% of the time a merchants personalized recommendations result in additional product purchases The Consumer Point-of-View

18 Over 1/3 (36%) of shoppers are significantly to somewhat more loyal to a retailer that provides them with a personalized online experience The Consumer Point-of-View

19 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 The Consumer Point-of-View

20 Shoppers indicate it is very to somewhat valuable to receive personalized product recommendation in each of these website locations The Consumer Point-of-View

21 By improving the personal relevance of related products shown, merchants have an opportunity to gain incremental sales The Consumer Point-of-View

22 Placement – Personal Home Page Amazon Educated Shoppers About Personalized Product Recommendations

23 Placement – Product Detail Page More Great Finds You may also like Top sellers New Great choice

24 Placement - Category Page Captivate customers immediately in the category page

25 Placement - Brand Page Customized selection of branded goods

26 Placement - The Shopping Cart Fuel last-minute impulse buys This Seasons Essentials You Might Like/Deal of the Day

27 Post-order, shipping and order confirmations are where shoppers most value receiving personalized recommendations The Consumer Point-of-View

28 Placement - Order Confirmation and Thank You Page Merchandised for incremental sales

29 Placement - Shipping Confirmations Sell and support opportunity

30 Placement – Post-Order Merchandising Specific coordinating product sent via

31 Personalized alerts are powerful tools that can broaden perceptions and increase sales The Consumer Point-of-View

32 Asking Customers What They Want Favorites by Category Sub-category Brand

33 Personalized Alerts Taking advantage of profiling by promoting new products based on preferences Beauty Bye-Byes online-only clearance

34 Ratings and Reviews Rate This Product ***** Bring them back to buy more

35 Shoppers want personalized experiences across channels, yet 78% are only encountering themsome of the time or once in a while Q14 The Consumer Point-of-View

36 The consumers have clearly set a high bar for the merchant community To exceed their customers expectations merchants must decide how to tackle the challenge of providing best-of-breed personalization

37 II. The Merchant Perspective

38 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% The Merchant Perspective e-tailing group 7th Annual Merchant Survey

39 Cross-sell/Up-sell and Personalization Have Not Yet Reached Top Priority Status Growth areas: Product enhancement & Rich media 36%30% International sites 19%11% New Metrics: Adding customer generated content 54% New backend system 26% New Technology platform 26% Q3 * New metric the e-tailing group 7 th Annual Merchant Survey

40 Merchant Survey & Objectives Goal To explore the merchant perspective on personalized product recommendations: Implementation Current methodologies Outsourced technologies Retention Budgets Techniques Performance rankings 24 merchants completed a 10-question survey; facilitated through personal interviews

41 24 Participating Merchants ABT Electronics Barneys Boston Proper Coach Cost Plus – World Market Danskin Decorative Product Source GSI HP Home & Home Office Intermix Lucy Masseys Orvis Palm Beach Jewelry Patagonia Pendleton Petco Rugs Direct Stacks and Stacks Staples Wine Enthusiast Wirefly * The e-tailing group 7 th Annual Merchant Survey, 1Q 08 A cross-section those who scored high in cross-sell/ up-sell contribution* as well as successfully demonstrated personalization efforts online

42 Overview of Our Merchant Findings 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 todays 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 A large, unrecognized potential exists for merchants who captivate customers by employing technology to close this personalization gap

43 Times are Changing 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 its like a spy book on the site where we can pick up on customer interests, including past history and current behavior. Personalized product recommendations are more feasible with technology serving as an efficiency model

44 The Technology Has Matured Optimal Merchant Criteria Larger SKU counts Broad assortment High turn While these tools have been around for several years, I feel that they have only started to mature in the past 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

45 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

46 Higher Open Rates with Personalization Techniques for alerts Back-in-stock On sale New

47 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 dont really go in and make adjustments because for us theres a point of no return. 79% of Personalization is Done Manually

48 Obstacles and Challenges In-house mindset Significant technology investment Belief that such efforts can be accomplished with existing technology 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 werent constrained by our vendor and category rules.

49 Top Retention Tactics Catalog and direct mail Customer service as a differentiator Assortment Promotions Loyalty programs Paid search Affiliate programs

50 IV. Personalized Product Recommendations Checklist

51 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 PPRs potential from an acquisition as well as a retention point of view Identify onsite and 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 alerts and the role they can play in returning shoppers to buy Put the tools in place to ensure accurate attribution

52 III. And Now, a Word from Our Sponsor

53 79% of Cross-selling is Done Manually This is where MyBuys can help you!

54 Select MyBuys Clients and Retail Categories Apparel Hobby & Electronics Footwear Home & Garden Cosmetics & Jewelry Sporting Goods

55 The Benefits Our Clients Enjoy

56 All recommendations were static 85% of s went unopened 50% of carts were abandoned Wanted to replicate in- store ambiance of personal service Masseys – Challenges

57 The Solution – Get to Know Each Customer

58 Masseys Results

59 Austads Challenges 12+ hours a week of extra programming for manual cross-sells open rate 15% Market demands customer retention since universe finite

60 The Solution – Promote Sale Items

61 Austads Results

62 Lauren Freedman President the e-tailing group, inc W Altgeld Street Chicago, IL Phone: Fax: Web: Lisa Joy Rosner Vice President, Marketing MyBuys One Lagoon Drive, S.120 Redwood Shores, CA Phone: Fax: Web: Q&A


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