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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

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Presentation Transcript
housekeeping
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
why mybuys commissioned this research
Why MyBuys Commissioned This Research

To uncover the gapbetween consumer demand for personalization and current merchant execution

about the e tailing group
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
Today’s Agenda
  • The Consumer Point-of-View
  • The Merchant Perspective
  • The e-tailing group Personalized Product Recommendations Checklist
consumer survey objectives
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
Methodology – Demographics

Online survey of 1,345 adults who shop online 4+ time annually,spending $500 or more via the Internet

Gender

63% Female

37% Male

Age range

12% 25-3428% 35-44

30% 45-54

30% 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
overview of consumer feedback
Overview of Consumer Feedback
  • Shoppers want - and expect - more personalized online shopping experiences based on past purchases and behavior
  • Personalized product recommendations areconvenient, 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 valuedthroughout the online shopping experience
  • By improving the personal relevance of related products shown, merchants have an opportunity to gain incremental sales
slide12

For greater convenience and time savings, shoppers want - and expect - more personalized online shopping experiences based onpast purchases andbehavior

The Consumer Point-of-View

slide13

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

slide14
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

slide15
Shoppers perceive that the Internet is the channel where they are best known and receive personalized recommendations

The Consumer Point-of-View

slide16

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

77 of the time a merchant s personalized recommendations result in additional product purchases
77% of the timea merchant’s personalized recommendations result in additional product purchases

The Consumer Point-of-View

slide18

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

slide19
89% of these shoppers feel that products suggestedon a site are specifically tailored for them only some of the time or once in while

The Consumer Point-of-View

slide20
Shoppers indicate it is ”very to somewhat valuable”to receive personalized product recommendationin each of these website locations

The Consumer Point-of-View

slide21
By improving the personal relevance of related products shown, merchants have an opportunity to gain incremental sales

The Consumer Point-of-View

placement personal home page
Placement – Personal Home Page

Amazon Educated Shoppers About

Personalized Product Recommendations

placement product detail page
Placement–Product Detail Page
  • “More Great Finds”
  • You may also like
  • Top sellers
  • New
  • Great choice
placement category page
Placement - Category Page

Captivate customers immediately in the category page

placement brand page
Placement - Brand Page

Customized selection of branded goods

placement the shopping cart
Placement - The Shopping Cart

Fuel last-minute

impulse buys

This Season’s Essentials

You Might Like/Deal of the Day

slide27
Post-order, shipping and order confirmations are where shoppers most value receiving personalized recommendations

The Consumer Point-of-View

placement order confirmation and thank you page
Placement - Order Confirmation and Thank You Page

Merchandised for incremental sales

placement shipping confirmations
Placement - Shipping Confirmations

Sell and support opportunity

placement post order merchandising
Placement – Post-Order Merchandising

Specific coordinating product sent via email

personalized email alerts are powerful tools that can broaden perceptions and increase sales
Personalized email alerts are powerful toolsthat can broaden perceptions and increase sales

The Consumer Point-of-View

asking customers what they want
Asking Customers What They Want
  • Favorites by
  • Category
  • Sub-category
  • Brand
personalized email alerts
Personalized Email Alerts

Taking advantage of profiling by promoting new products based on preferences

“Beauty Bye-Byes”

online-only clearance

ratings and reviews email
Ratings and Reviews Email

Rate This Product

*****

Bring them back to buy more

slide35
Shoppers want personalized experiences acrosschannels, yet 78% are only encountering them“some of the time” or “once in a while”

The Consumer Point-of-View

Q14

the consumers have clearly set a high bar for the merchant community

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

slide38

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

cross sell up sell and personalization have not yet reached top priority status
Cross-sell/Up-sell and Personalization Have Not Yet Reached Top Priority Status

the e-tailing group 7th Annual Merchant Survey

Q3 * New metric

merchant survey objectives
Merchant Survey & Objectives

24 merchants completed a10-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
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
  • Massey’s
  • Orvis
  • Palm Beach Jewelry
  • Patagonia
  • Pendleton
  • Petco
  • Rugs Direct
  • Stacks and Stacks
  • Staples
  • Wine Enthusiast
  • Wirefly

* The e-tailing group 7th Annual Merchant Survey, 1Q ‘08

overview of our merchant findings
Overview of Our Merchant Findings

A large, unrecognized potential exists for merchants who captivate customers by employing technology to close this personalization gap

  • Highawareness 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 totest 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
“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.”

Times are Changing

Personalized product recommendations are more

feasible with technology serving as an efficiency model

the technology has matured
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
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
Higher Open Rates with Personalization

Techniques for alerts

  • Back-in-stock
  • On sale
  • New
79 of personalization is done manually
79% of Personalization is Done Manually

“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
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
Top Retention Tactics
  • Email
  • Catalog and direct mail
  • Customer service as a differentiator
  • Assortment
  • Promotions
  • Loyalty programs
  • Paid search
  • Affiliate programs
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
79 of cross selling is done manually
79% of Cross-selling is Done Manually

This is where MyBuys can help you!

select mybuys clients and retail categories
Select MyBuys Clients and Retail Categories

Hobby & Electronics

Cosmetics & Jewelry

Sporting Goods

Home & Garden

Apparel

Footwear

massey s challenges
Massey’s – Challenges
  • All recommendations were static
  • 85% of emails went unopened
  • 50% of carts were abandoned
  • Wanted to replicate in-store ambiance of personal service
austad s challenges
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
slide62

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: LF@E-TAILING.COM

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: lrosner@mybuys.com
  • Web: www.mybuys.com