In the past, a brand’s ecommerce strategies required a tradeoff between mass reach and a focus on customer segmentation. Luckily, advances in content management and digital marketing technologies have eliminated the need for a tradeoff between precision and reach. Personalizing the user experience across the entire customer journey demands the mastering of data collection to leverage for targeted messaging, personalized content, and engaging experiences.
At ShopTalk, Guido Campello, CEO & Creative Director at Cosabella, Kent Salisbury, VP of Marketing at Overstock, and Mike Lackman, CEO of Trade Coffee discuss how they’re personalizing the experience for their shoppers.
Cosabella is a family owned and operated heritage brand that traditionally sold through retailers. Like most heritage brands developing a direct-to-consumer channel (DTC), Campello admits they initially found it difficult to compete with new digitally native brands popping up regularly. As a heritage brand, Cosabella faced three common challenges. One, restructuring internally in order to tear down the silos between offline and online channel strategies and data. Two, maintaining the soul of the brand by aligning the new DTC site with the core values of the brand as well as the needs of today’s shopper. Three, finding the right partners, tracking their ROI, and continuously re-evaluating those relationships.
To enhance the online experience, Cosabello needed to gather insights from the in-store experience. It was all about using the fitting room experiences to capture the “unexpressed needs of a woman.” In the fitting room, “you learn very intimately, pardon the pun, about the consumer and that doesn’t necessarily happen in the digital space,” says Campbello.
The fitting room experiences shed light on how a woman’s age often reflects their purchasing needs and knowledge of the product. For example, during the recession in 2008, bridal was the only category doing well. Campbello noted that women at this stage in their lives will still spend money on lingerie. Most of their customers are around 40 to 55 years old, but this allowed Cosabella to capture a younger audience.
Recognizing the emotional aspect of this type of purchase, Campbello leveraged this to segment shoppers by age and which significant events would likely happen during that time. For instance, tweens need their first bra, young women need lingerie for the bachelorette party, wedding, and honeymoon, and mothers need nursing bras. For older customers familiar with the brand, Cosabella recycles old products to renew excitement among this segment. “During all of these very engaging moments, Cosballea was on their hips,” adds Campbello.
In addition to age, Cosabella uses size to segment users. “First you have a vertical size segmentation—small, medium, large, petite, all the way up to 5x. Then you have diagonals because body shapes aren’t the same,” says Campbello. They’ve introduced new lines to cater to various body shapes, such as the Curvy Bra collection, designed for women with bigger chests but smaller rib cages.
If you’ve ever bought anything from Overstock, you know they always send shoppers emails with items they recently viewed or promotion updates based on a product category they frequently browse. However, personalized messaging didn’t happen overnight. Overstock found a lot of different solutions but lacked the ability to create content at scale and deliver meaningfully to their customers.
They re-evaluated their marketing mission and created a tech stack that would align with their new statement. To understand the customer better, they invested in a CRM, CDP, and an ID Graph. An ID Graph collects customer data across devices and IP addresses and brings that data into a single database. The team tagged all content and used a dynamic content delivery solution to ensure it’s optimized across devices. Lastly, they implemented a new data infrastructure, machine learning layer, and cohort testing to deliver a more personalized home shopping experience.
Overstock leverages the new tech stack to enhance each channel experience, including emails. The retailer giant sends millions of emails a day. “When we think about personalization, we have to think about not only customers and their cohorts but also their individaul profiles,” says Kent Salisbury. The personalization in customer emails goes far beyond their first name. Overstock customizes the subject line, promotions offered, header, content, text overlay, and day of week and time delivery. Each of these components can be broken down into singular parts to create the ultimate personalized email. “This allows us to not only send one email but millions of different variants based on the customer’s propensity,” states Salisbury.
How do they choose what content to put in an email? It largely comes from which products they previously viewed on the site and their past shopping behavior. “You looked at this item, we’re now going to re-serve that item to you at a later date,” states Salisbury. They typically include the product along with similar products in the email to renew interest and drive conversion.
Personalization Without a Large Customer Database
Trade Coffee started as a DTC marketplace to connect customers with high-quality coffee. Plenty of other digitally native coffee brands talk about tasting notes, but to the non-coffee connoisseurs that doesn’t mean much. Mike Lackman, CEO of Trade Coffee, says that they wanted to personalize the experience based on their level of knowledge of specialty coffee. However, as a new brand, they didn’t have any historical customer data. So, they created a basic questionairre to build a personalized experience.
After launching the questionnaire they realized that for every coffee nerd they were reaching, there were also everyday coffee drinkers who typically prefer buying a $10 bag from Costco. However, Trade Coffee wasn’t meant to only cater to coffee connoisseurs, but also to future coffee connoisseurs. The questionnaire allowed them to identify between the two types of customers and further personalize the experience based on the user’s answers.
After completing the questionnaire, the user is either categorized as a “Coffee Lover” or a “Future Coffee Lover.” Coffee Lovers are recommended to subscribe to The Hookup—a monthly subscription of curated coffee blends that align with the shopper’s taste type. Future Coffee Lovers have the option to subscribe to The Classics, described as “easy to love blends.” If either user chooses not to subscribe, they can pick coffee blends a la carte. Today, 72% of their customers are monthly subscribers, and 28% opted for a la carte.
Since launching Trade Coffee, Lackman says he’s learned one very important thing: “The more you can personalize, the more authority you can have as a digital merchant without necessarily having to add more choice to the funnel or without having to worry about cannibalization in the different product categories.”