How the Next Phase of Personalization Drives Conversions
The shopping journey is no longer a clear and linear path. Brands and retailers can interact with consumers in various ways and at different touch points that twist and intersect — online, on social and IRL. But the endgame is clear: brands need to lure shoppers to their sites if they want to see a conversion.
Meanwhile, shoppers are hunting for fashion inspiration. And they also want a personalized experience that is smooth, fun and delightful. But can you inspire customers while also driving conversions? Rohan Deuskar, founder and chief executive officer of Stylitics, the shoppable content platform provider, says yes. Here, Deuskar discusses e-commerce trends, consumer behavior, and how the industry is entering a second phase of AI-powered personalization.
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WWD: With so many challenges facing the retail industry today, what are the biggest wins these companies can easily implement to improve their e-commerce?
Rohan Deuskar: One of the biggest untapped assets that retailers have is the customers they have already brought to their site, often at great expense. Getting these customers to explore more categories, look at more products, and ultimately buy an additional item can make the difference between missing your numbers and having a record year. There are several specific moments in the customer journey where a retailer can turn a transactional, discount-driven, two-minute session into one that is inspiring, fun, personalized and generates a much larger purchase within the same session.
Style inspiration done right can create an experience akin to browsing Instagram, Pinterest, or even a fashion magazine. Our customers have found that showing personalized outfit recommendations on product detail pages can shift the shopper’s mindset away from feeling overwhelmed by the sheer volume of products. There’s a misconception that providing inspiration, editorial content, or engaging experiences like mix and match or an outfit builder will distract the shopper from converting. Every customer survey we’ve ever done has reinforced that shoppers will buy more if they are inspired, even if it takes a small detour into thinking about looks and bundles rather than just shopping multiple sites to find the best price on a specific product or style.
We have seen retailers and brands dramatically improve the number of categories their visitors shop simply by showing them outfits, looks, bundles, gift sets and other collections of products that break them out of their transactional mindset and habits. Average order value, conversion rate, units per transaction, categories per transaction, time on site, and many more core metrics can be vastly improved simply by introducing more inspiration across the site experience.
WWD: Everyone talks about creating a more personalized e-commerce experience, but what does this really look like, and how does AI impact personalization?
R.D.: We are now entering what I believe to be the second era of personalization in retail. The initial phase of personalization involved attempting to fit customers into predefined cohorts and providing them with results based on the behavior of those cohorts. The challenge, and the reason why many retailers find themselves having invested heavily in personalization without seeing transformational results, is that shoppers cannot be confined to a single persona or type. As individuals, our product preferences, price sensitivity, decision-making speed, return habits and various other factors are influenced by our mood, the season, specific events or occasions and many other variables.
The next phase of personalization, which we are implementing, revolves around understanding the moment, the contextual behavior within a session, the time of year, and other temporal and seasonal factors. By also taking into account behavioral cues, category-specific observations, and data points, we can deliver personalized recommendations and experiences that align with a customer’s intent in that particular moment. In other words, there is no one-size-fits-all customer profile. Each customer possesses different personas, and the key to effective personalization lies in identifying which mode or persona they are in at any given moment. By providing them with the best results and experiences for that specific context, we avoid trapping them in a single mode or persona indefinitely.
The applications of artificial intelligence in conjunction with personalization are incredibly profound. Consider the capabilities of large language models like ChatGPT. These models excel at providing generalized information and high-quality guidance based on minimal contextual input. For instance, if I ask for a well-designed workout plan based on my age and weight, it can deliver a fairly good recommendation. However, the real power of personalization in retail lies in unlocking truly personalized style profiles and shopper data sets by harnessing the conversational and analytical capabilities of advanced AI models. This level of personalization can mimic the experience of a skilled personal stylist, customer service agent, or in-store associate.
WWD: How is Stylitics solving retailers’ inventory management issues?
R.D.: When a retailer has bought too much of a particular product and needs to move that inventory, the best way to do it is to style it with on-trend or bestselling products that pair beautifully with it in a variety of outfits. We call this “last-minute merchandising.” Showing those looks across dozens of relevant product pages and high-traffic pages brings more eyeballs to the product in the best light. Additional features like labels, spotlights, etc., draw the shopper to that product. Our systems allow a merchant to do that on demand but also to automate everything based on inventory and priority-driven smart boosting, automated labels and other techniques.
This also works in the reverse — retailers often want to slow down the sales of a particular product to have inventory for a few more weeks in the season. You can hide or suppress products as well. Stylitics is synced to over 600 daily feeds that we custom-map through our feed ingestion engine, so we know the actions to take based on inventory levels, margins, etc.
WWD: How have the changes in digital marketing impacted e-commerce retailers?
R.D.: Retailers often tell us: “Customer acquisition channels are more expensive than ever and less effective than ever.” The crux of this is the race to the bottom with transactional commerce vs. inspirational commerce.
Product ads that follow you around social platforms or 40 percent off sale ads are not going to drive real revenue over time, even though they drive traffic sometimes. We believe that engaging the customer through brand inspiration, style advice, and romancing key products and then — most importantly — continuing to provide them with that inspiration site-wide is the formula for high lifetime customer value and marketing channel effectiveness. There are many tactical ways you can improve that journey to aid conversion, but it has to be rooted in inspiration, not the same old commoditized product ads and sale announcements. Sales and product ads are fine and can be effective, but as a part of the marketing campaign, not as the sole value proposition.
WWD: What does the future of digital merchandising look like, and how will we see Stylitics’ platform evolve?
R.D.: We work with and support thousands of merchants on a daily basis across our nearly 200 brand and retail customers. We are committed to further equipping them with transformational tools and useful and actionable data that lets them engage with consumers more effectively.
In the coming months, we will be introducing new tools for merchants to be able to gain visibility into market trends in real time and to take instant (or automated) actions that drive higher sales and higher profitability within seven days.
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