Learning From Retailers Past: How TechStyle Modernizes Personalization
Marketers need to present customers with the right message and the right product at the right time
Photo Source: JustFab
Personalization may be the buzz word du jour, but it isn't something modern marketers invented. When asked how I think about personalization, I think back to shopping in America in the 1950s.
Imagine a small dress shop in a typical town, next to the soda shop and the Kodak store. When a customer walked into the shop, the shopkeeper would greet her: “Good morning, Ms. Inglis. We haven't seen you in a few weeks — welcome back. I have a new shipment of magenta dresses that you'll love, and they're in your price range.”
That shopkeeper knew customers' preferences, habits, and information and used this data to personalize the shopping experience. And while e-commerce retailers house this same information in their databases today, few use it to replicate this level of personalization.
Unique human connections are hard to replace, but digital personalization can produce similar interactions and create benefits that never existed in commerce before. We know who likes magenta dresses and how often they shop. We recognize them by name and are aware of their price sensitivities. Let's start using this data to give customers a better shopping experience. Here's how we do it at TechStyle Fashion Group.
Digital retail spurs new marketing innovation
At JustFab, a membership-based global fashion retailer owned by TechStyle, we personalize the customer experience from her first brand engagement. We start with a quiz and ask her about her style preferences, her clothing and shoe sizes, her color preferences, and her ZIP Code. Just as how a personal shopper greets you at a store, we try to replicate that kind of welcome and information gathering with the Q&A.
From there, we continue to observe and record the customer's preferences by examining browsing and purchase activity, much like a retail employee would do for her regular customers. We then use that information to refine and personalize her shopping experience on the site, such as with targeted emails and print catalogs.
This approach not only helps us create a personalized shopping experience for our customers, but it also eliminates waste: We have a 95% accuracy rate for predicting inventory demand. This drastically reduces obsolescence of product — one of the big enemies in traditional retail.
JustFab, one of four TechStyle Fashion Group brands (Fabletics, JustFab, FabKids, ShoeDazzle), collects, analyzes, and parses its data through TechStyle's Global Fashion Commerce platform. Our platform, which integrates membership commerce and personalization with data science, is focused on presenting customers with the right message and the right product at the right time.
Personalized communication: delivering the right message
Recently, we launched a test that offered the same promo to three groups of VIP customers who were shopping less frequently. One group, the control group, received the promo alone; the second group received the same promo with a message saying they were “one of our best customers;” and the third group received the same promo with a message stating “We miss you.”
While all three delivered nice revenue lifts, the “We miss you” message hit home and drove a 103% revenue spike compared to the control group. By simply adding a relevant message, we saw a substantial pickup in engagement and revenue.
Lesson one: Relevant messaging is critical and it must be tailored to the customer.
Personalized merchandising: delivering the right product
Our messaging strategy now offers personalized product recommendations for each customer. These recommendations are based on the deep data analysis we do, which includes examining everything from what a customer buys, to what she isn't interested in, to what she may want in the future.
Once we began deploying personalized product messaging in our emails, we saw an 84% lift in revenue. We're now advancing this successful approach and testing videos that highlight products a customer abandoned in her cart.
Lesson two: Customers want to see relevant products through a curated selection tailored to them.
Timing is everything: delivering at the right moment
Clearly, a personalized experience requires the right product and the right message, but it also requires the right timing.
Like most retailers, we know the average amount of time it takes before a customer is deemed “lapsed.” But we also know that while averages are great for reporting, they don't always translate to marketing campaigns.
Consider: After six months of customer inactivity, we could set up a standard lapsed campaign that would trigger an email or a direct mail piece saying “We miss you.” However, this would be an odd message to receive if you're a customer who shops every six months. And for customers who shop weekly, this message is far too late.
To remedy this issue, we developed an algorithm that can determine the average shopping cycle for each individual and calculate, in real time, how far away she is from her typical shopping pattern. “Lapsed” could mean two weeks for one customer and eight months for another. Whatever her frequency, we deliver the right message at the right time for her. This algorithm-based, data-driven strategy pleased shoppers – driving a 22% lift in best customer retention.
Lesson three: Schedule your messages when customers want to receive them.
Value of retail customer data keeps expanding
Deep customer data and analysis don't just benefit marketing conversions; they also benefit product merchandising and design. Customer feedback and insight help improve products and stimulates new innovation.
Personalization has evolved over the past five decades, and surviving in retail will require the same level of attention that shopkeepers once showed new and loyal customers.
The future of retail is about developing rapport and continuing the conversation all while using emerging data science tools and platforms that react dynamically, on an individual level, to provide each customer with the best experience possible.
About the author:
Traci Milholen Inglis is a marketing professional with experience working with retail brands including Express, Hot Topic, Torrid, JustFab, Shoedazzle, and Fabletics. She has proven success in designing winning marketing campaigns to grow customer bases, drive sales, and bring valuable customer insights to retail organizations. Traci is currently the GM, CMO for the Fast Fashion Division of TechStyle Fashion Group. As GM and CMO, Traci oversees all business operations for the two fast-growing brands, including design, production, distribution, sales, membership services and marketing. Founded in 2010, TechStyle is a lifestyle fashion company that offers an engaging and personalized shopping experience to more than four million VIP members across JustFab, Fabletics, ShoeDazzle, and FabKids. Six years since launching, TechStyle has become the fastest-growing fashion company by incorporating technology and data into its entire business cycle.