This time it’s personal

LIKE one-to-one print marketing, true one-to-one e-commerce — a Web experience personalized by the merchant for each customer and prospect — has turned out to be all but impossible for most companies to achieve.

Nonetheless, many merchants are finding innovative ways to give customers unique experiences online, especially now that broadband access has reached critical mass. And many others are finding that some familiar direct marketing personalization techniques work just fine on the Internet too.

Ken Burke, founder of e-commerce platform provider MarketLive, defines personalization as the ability to use past or current customer data to provide that customer with a unique experience. “When I say unique, I don’t mean unique to an individual, but unique to a group of people typically,” he says. “I tend to think about personalization in two areas: You either personalize the offer, or you personalize the interface, or you do both.”

According to Burke, whose technology is behind such sites as BostonProper.com, NormThompson.com and Frontgate.com, personalization as it was envisioned during the heady days of the dot-com boom turned out to be simply too much money and work. “Merchants have a hard enough time managing their sites as is,” he says.

And it’s not just Websites that aren’t calling customers by name. E-mail service provider Silverpop reported in its “2005 Retail E-mail Marketing Study” that 95% of merchants’ e-mails had no form of personalization: “While the beauty of e-mail marketing is its ability to develop one-to-one relationships with customers, most retailers studied failed at the most basic and easiest way to reach out and connect: making the e-mail personalized to the recipient. While years of effort and millions of dollars have gone into the study of print and broadcast advertising, the e-mail message box largely remains a canvas awaiting a master’s touch.”

OLD SCHOOL

So what are merchants doing to give customers unique experiences online? Well, as it turns out, a lot of them are using good old A/B-split testing and making offers based on the recency, frequency, and monetary value of past purchases. Sound familiar?

Case in point: Honesdale, PA-based Highlights for Children. “We use personalization technology for A/B testing,” says Jamie Grove, director of e-commerce for the publisher/marketer of magazines and toys for youngsters. “We define groups of people based on characteristics such as what they bought and where they came from, and we integrate that holistically — not just on our Website but also in our e-mail communications and the frequency of those communications.”

One example of Highlights’ “holistic” approach is how the company treats “thank you for your order” e-mails. Someone who has a history of multiple purchases with the company might get a discount coupon in the thank-you e-mail, while someone who hasn’t made many purchases from Highlights might get a free-shipping offer.

When asked about so-called one-to-one relationships, Grove responds with a question of his own: “How do you scale that up, and how do you manage that? Unless you have a team of 30 people looking at individual relationships and trying to measure that, you’re going to be taking a lot of shots in the dark. … The person who bought five outdoor play products in the past may not be looking for an outdoor play product when they come back to you.”

Nonetheless, he continues, “I think it’s important to be relevant. I never want to be in a position where someone says, ‘Those guys send me nothing but spam.’ I want to make sure our offers are relevant, but that’s old-fashioned testing.”

NEW WAVE

Besides using A/B-split testing, merchants are increasingly taking advantage of consumers’ high-speed Internet connections to offer unique shopping experiences. And it’s no wonder: According to estimates from Internet research firm eMarketer, broadband overtook dial-up as the predominant Internet connection for U.S. consumers in 2004, and 60% of Americans connected to the Internet via broadband in 2005. By 2008, eMarketer estimates, more than 83% of U.S. consumers will have broadband access. Broadband users spend significantly more time and money online than their narrowband counterparts, and Internet retailers have been designing their sites accordingly.

For example, when Shoedini relaunched as 6pm.com in November, the shoes and accessories site introduced a proprietary technology called Perfect Match. The technology assigns all the shoes and handbags in 6pm.com’s database point values for various attributes, such as color, fabric, style, and designer. Customers logging onto the site, a division of Greenwood, CO-based eBags.com, can choose from 120,000 shoe styles and then click on a link to see matching handbags. The site then dynamically returns 36 matches in groups of six. (If it’s not clear yet, “6pm” is a play on the phrase “six perfect matches.”)

Once 6pm.com returns a group of matches, shoppers are invited to give individual matches a rating from 1 to 6-1 being “no way!!” and 6 being “that’s hot!!” The technology, for which 6pm.com is trying to get a patent, keeps an ongoing tally of shoppers’ ratings and uses them to rerank matches for the customers who follow. “There is a very elaborate algorithm behind all this,” says Karen Centner, vice president of merchandising for 6pm.com. “To me it is the perfect combination of designers’ and merchants’ point of view with the mass [audience’s] point of view.”

When the site launched, Perfect Match returned some not-so-perfect matches that were voted out of the system by shoppers, says Centner. But the technology has also returned some great matches a merchandiser would never have had the time to pull together, Centner says: “I was so surprised by some of the matches.”

Another example of a multichannel merchant using new technology that capitalizes on consumers’ broadband connections is Omaha, NE-based Borsheim’s. The jewelry merchant, owned by Warren Buffet’s Berkshire Hathaway, in November unveiled Design Your Ring, an online configurator that enables site visitors to select an engagement ring setting along with the size, type, and clarity of diamond.

A sizable portion of Borsheim’s online shoppers are “engagement customers,” says director of marketing and advertising Adri Geppert, “That younger crowd is very interactive and very educated. They’re looking on the site to gather information, and they want bells and whistles.” While a typical engagement customer industrywide is in his 20s and spends $2,500 on a ring, Borsheim’s engagement customers are typically 25-34 years old and will spend an average of $5,000, Geppert says.

Geppert says the configurator, which is enabled by New York-based RichFX’s technology, is designed to give online customers an experience similar to what they would have if they were in the store. “I needed to be able to allow customers to pick a diamond and place it in a mount or to look at already-mounted goods and get an idea of what they were looking for,” she says.

Maybe one-to-one marketing isn’t such a pipe dream after all.

Pick an image, any image

Disney has opted to sate online buyers’ hunger for personalized shopping by, among other things, making its entire cast of characters available for consumers to make their own personalized products.

Disney partnered in December with Palo Alto, CA-based online customization company Zazzle.com, which licenses images from Warner Bros., Marvel Comics, and Lucasfilm Ltd., among others, and then enables consumers to use the images to personalize T-shirts, greeting cards, and postage stamps. Disney images for custom use are now available at DisneyShopping.com as well as on Zazzle.com Disney had originally planned to offer a limited selection of images, but on Zazzle.com’s advice opted to make all its characters available online. “You can’t guess what people are going to buy,” says Zazzle.com cofounder Robert Beaver. “On Disney’s shopping site up until recently, they had only 10 or 15 images available on apparel. We got Disney to put in close to 4,000 images on the Zazzle site. To their amazement, and to our amazement, every single one of those images has sold at least once.”

Zazzle also allows individuals to sell their own art for use on personalized products. “Frankly that’s the bigger side of the business,” says Beaver. People can upload personal content, such as a photo or a drawing, and then use a template to create, say, a greeting card. According to Beaver, hundreds of thousands of people have uploaded content now available on Zazzle.com.

“This is where you take customization and don’t just resize images and choose the color and style you want,” says Beaver. “This is where you actually mesh your personal content with somebody else’s content. There are actually trillions of alternatives available at any one time, and more than 95% of our products are totally unique.”
KM

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