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Page 1: Personalization - Lenati · omni-channel experiences. • Builds brand credibility and enhances ... 360-degree view of a customer’s relationship with the brand should be a #1 priority,

Personalization

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Table of Contents

Personalization

The Key to Personalizaton: Data

Lenati’s Approach to Enable Personalization in Your Organization

Choosing a Personalization Vendor

Summary

Lenati and Dynamic Yield Case Studies

3

7

11

17

21

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PersonalizationPersonalization has been a topic of conversation among executives, marketers

and leading brands for over a decade. In a 2014 study conducted by Adobe, when

asked to prioritize one capability that will be most important to marketing in the

future, personalization topped marketers’ lists. Two years later, Forbes dubbed

personalization the “holy-grail of marketing.” Again in 2017, personalization kept up its

illustrious reputation as Gartner’s “#1 strategic investment for brands” (2017).

We keep hearing about the importance of personalization but why don’t we see it more

widespread—particularly in one of the most personal industries: Retail? Why don’t we

experience it more as consumers? And why do we struggle to enable it as marketers?

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What does this mean for retailers?Brands still have a lot of room for growth when it comes to delivering on the true,

personalized, one-to-one experiences that consumers have come to expect. Retail

today is hyper-competitive and ever-changing. For retailers, personalization is key to

unlocking ultimate relevance between a customer and your brand.

As marketers, we’ve all seen the vision for personalization through the voice of the customer:

Dynamic Yield’s research*

on the current state of

personalization maturity

showed that while

49% of companies

have identified

personalization as a

top priority investment,

only 23% are truly

capable of personalizing

experiences for each

channel.

*Earlier this quarter, Dynamic Yield released its initial findings from the first ever personalization maturity assessment test of 700 marketers and executives from cross-functional roles in various industries in Americas, EMEA, and APAC to better understand the degree to which companies feel as though they are personalizing experiences for customers. https://www.psfk.com/2018/02/op-ed-retail-personalization-strategy-success.html

“Recommend relevant things that add value to my experience, no

matter where I interact with your brand, but do it in a way that’s

meaningful to me.”

“Remind me of things I want, but don’t have time to keep track of.”

“Seamlessly guide me to the next service, or experience—show

me what I never knew I needed.”

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So, what exactly is personalization?We all agree that personalization is the new imperative for retailers if they want

to continue to acquire, grow and retain customers. There is often confusion in the

marketplace around what exactly is personalization. Is it your barista writing your

name on your latte? Is it a monogrammed handbag from a designer boutique? Is

it a targeted email marketing campaign with your name in the subject line? Is it a

targeted offer based on a user’s on-site behavior?

To dispel some common misconceptions, let’s align around a unified definition.

Personalization is not:

●• marketing: It spans far greater across the organization than a single marketing

campaign or program and is a capability rather than a sole marketing function.

• segmentation: While segmentation targets customers in a one-to-many

relationship, personalization aims for a one-to-one relationship between the brand

and a customer.

●• customization: 3D imaging of your foot to design a custom-fit boot is personal,

but not the practice of personalization. However, utilizing that fit data to serve

personalized recommendations of boots specific to your fit is personalization.

lenati defines personalization as proactively changing a customer’s experience

based on what you know about an individual consumer. It is an enterprise

capability that enables businesses to deliver the ultimate, personalized, and

relevant customer experience.

In addition, personalization:

●• Supports and enhances the overall

consumer experience across channels

and devices.

●• Establishes the foundation for seamless,

omni-channel experiences.

●• Builds brand credibility and enhances

authenticity by providing consumers with

relevant products, individual expertise,

and opportunities to engage.

●• Provides customers with more choice

and control over their experience with

your brand.

●• Allows for true one-to-one relationships

with customers.

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A brand that can anticipate a customer’s needs and deliver value throughout the

customer’s experience will unlock lasting, emotional relevance. Personalization not

only influences consumer behavior, transforming the brand’s value in the eyes of the

customer—but drives positive impacts to the bottom line.

Delivering benefits to customers and the brand

If retailers and brands alike know they need it, why hasn’t personalization been widely enabled?

The answer lies with the DATA.

“It would be disingenuous to say personalization is easy to implement, which is why its tremendous potential is yet to be realized.”

–Colton Perry, VP of Channel Dynamic Yield

Benefits to consumers

●●• ●Improved overall customer experience

●●• ●Increased relevancy of content and experiences

●●●• ●Easier to find products and services

●●●• ●Speeds up interactions with the brand

●●●• ●Improved brand trust

●●●• ●Increased emotional connection to the brand

Benefits to the brand

• Improved customer insights and data

• Increased engagement and conversion

• Increased customer retention

• Empowered sales people

• Increased top line revenue

• Increased CLV

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The key to personalization is data. It begins, first and foremost, with

identifying what you know about your

customers and what matters to them

by collecting all relevant data (from

all channels) and connecting it for a

360-degree view, to power personalized

experiences to the right person, at the

right time—at the moment that matters.

what does this mean for retail?

Many retailers, particularly those born

out of traditional brick and mortar,

are unable to achieve this dream of

seamless, omni-channel personalization

as a result of not investing in a cross-

channel data strategy. This leads to a

host of common data struggles for many

retailers today.

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Our retail clients often struggle with data in one of the following five ways:

Data collection is incomplete.

Retailers are collecting customer data, however, is it often minimal, infrequent and

not processed in real-time—limited to the brand’s owned digital channels, leaving

data collection on shoppers in physical stores a mystery.

Data quality is a major concern.

Retailers struggle to prioritize which data points matter. Creating a single, complete

360-degree view of a customer’s relationship with the brand should be a #1 priority,

but with that comes the need to identify obsolete, inaccurate or missing customer

data and create data management processes and systems.

Connecting data seamlessly across channels is overwhelming.

For retailers that are collecting customer data—the struggle now becomes how do

I make sense of it all? Retailers with an overwhelming amount of data in multiple

repositories often can’t turn data into actionable insights. Data sits untouched in

siloed databases: untapped and underutilized.

Enabling timely data across the organization is too complex and costly.

Retailers with a brick and mortar presence face the added complexity of connecting

in-store systems to antiquated tech stacks, rendering them incapable of surfacing

data to further personalize experiences outside of a single channel.

Justifying capital investments in data and technology is an uphill, multi-year battle.

Most retailers are long overdue for a technology overhaul, but brands often don’t

know where to start or how to best champion re-platforming. Prioritizing, let

alone justifying the high capital investment in data enablement technologies and

personalization solutions, is a labor-intensive task.

The retail industry is

facing an inflection

point—the cost of doing

nothing has simply

become too high.

Modernizing the data

infrastructure and

investing in customer-

facing technology is

now essential to future

proofing a business. The

long-term value of these

investments can and

should be quantified.

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A real commitment to succeeding with personalization requires the organization to align around the overall model—from

defining and aligning on a vision for personalization, to forecasting the financial return, and then organizing teams to support the

new processes, content marketing, tools and technology.

defining the vision for personalization

Brands must first define a universally agreed upon vision for personalization across the organization—What are the

key customer journeys? Who are the target customers that should be personalized to? What moments in their journey

should be personalized?

identifying the financial impact

Once a vision is defined, how is the bottom-line financial impact identified and communicated to leadership? What is the

benefit to the brand? How are the results measured and reported to key stakeholders?

prioritizing experiences to personalize

Not every customer interaction needs to be personalized. Identifying key moments in the customer journey to

personalize is a critical step toward building a realistic roadmap. What is the process of prioritizing ideas and concepts to

inform the personalization testing roadmap? What is the statistical significance for personalized recommendations? What

types of personalized experiences will drive the greatest customer value to influence change in behavior—and ultimately

uplift in revenue?

addressing legacy retail systems

Antiquated technology stacks (e.g., legacy CMS, CRM, POS, inventory management and recommendations engines)

present major roadblocks for many retailers. Yet, reevaluating components in your tech stack in order to better create

personalized experiences for your most valuable customers is of the utmost importance. Will another point solution

make or break the system or is a unified platform the answer?

determining the correct organizational structure

Personalization is no longer a one-off marketing tactic. Now a full-blown discipline, successful execution is heavily reliant

on selecting the right talent and appointing the right executive sponsor. Who will own personalization as an initiative and

where will they sit? How does it fit it into current processes? What additional people or processes are needed to enable

cross-functional change?

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building the content strategy

For personalization to be effective, most brands need a content strategy refresh to support the added variations of content

needed to support personalization. A successful personalization strategy is only as good as the content. Content needs

to be relevant, resonant and reflect various dimensions (e.g., location, genders and style preferences). How will content be

tailored to individual customers? What content considerations and variations are needed for each channel (e.g., website,

apps, email and social)?

determining scalability

Once a personalization pilot or use case has proven positive ROI, what can be done to continue testing, learning and

optimizing experiences in a timely manner? Will scaling beyond a single channel be possible?

identifying additional technology and or tool investments

Often brands are unable to enable personalization with their current marketing technology stack, leading to a build or buy

technology/tool scenario. How should potential investments be prioritized and what vendor(s) will fit the brand’s needs?

As daunting as this all seems, there is a path forward for retailers and those willing to take the steps needed to build out a solid data strategy, establish a clear vision for personalization, and work toward that long-term vision.

Those retailers will not only survive—but thrive.

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,

phase 1: define

Know the Customer

Customer insights & analytics

Value identification & needs mapping

Build the road map: identify the channels, journeys dimension and moments to personalize timing, people, process & tech

Data enablement and technology integration

Identify dimensions by which to personalize

Define required capabilities, data and technology integration

Develop the pilot and tests to prove out ROI(test & learn to inform data / tech expansion)

Technology integration, deployment– measure & scale

Design the Vision

Build the Data Strategy

Roadmap, Capabilities, Test & Learn

Technology Selection, Enablement & Integration

phase 3: data phase 4: plan & pilot phase 5: implement & scale

The path forward: solving for enterprise-wide personalization in your organizationLenati utilizes a comprehensive five-phase approach to personalization transformation; from defining customer needs, designing

a universally agreed upon vision for the experience and data—to roadmapping the plan from testing to full-scale implementation.

Design the vision for personalization

Build the data strategy: collection, connection & enablement

phase 2: design

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phase 1: Defineknow the customer

Building a single-profile view of the customer must be at the forefront of a brand

personalization strategy. This ever-evolving, single-source of truth is the basis to have

a 360-degree view of your customer’s needs, interests, activity and key attributes.

This allows you to understand how and what drives value for your customers.

●●●• ●What is the differences in customer needs?

●●●• ●What do they perceive to be the moments that matter?

●●●●• ●What are the experiences that drive lasting value?

●●●●• ●What matters more—personalizing by geography? Or by gender? Or by age?

By style segment or past purchase behavior?

●●• What kind of data are you currently collecting from you customers?

●●• What are the dimensions by which you want to personalize?

How do we make sure that their experiences across channels are seamless?

Lenati utilizes deep insights and advanced analytics to understand the patterns in

your customer data to help identify which data points matter to your business and

which are going to move the needle to turn an ordinary moment into an impactful,

personalized moment for a customer.

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phase 2: Design vision for personalization

The vision for personalization should align to the company’s top-down strategic

priorities and brand positioning, as well as be informed by customer insights and

analytics.

Lenati utilizes detailed customer journey maps to design the ultimate vision for

personalization across channels (in-store, online, app, partners, etc.) by mapping the

relationships between interactions, customer scenarios and key customer moments.

We guide brands to answer critical questions as we co-create a North-Star vision for

personalization.

●• What is the ultimate vision for personalization across channels?

●●• What is the customer journey and how does it intersect with other key journeys

(e.g., the salesperson’s journey)?

●●• What are the customer scenarios or moments that matter?

In addition, we work with brands to develop an approach to prioritization. Not every

experience or customer interaction with a brand needs to be personalized. A

personalization schema, unique to each brand’s business model is used to identity

the key moments of truth that should be personalized to drive the greatest impact to

the customer experience and to the brand. A successful personalization strategy must

focus on delivering experiences in the context of where a shopper stands on the path to

purchase.

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phase 3: Data data strategy

data collection

Identify the current state of data

collection, gaps and what data is

needed to enable the vision.

data connection

Develop the strategy to connect the

data across channels and identify

what data is needed to surface at

which points in the customer journey.

data enablement

Define the plan to enable the data

seamlessly across the customer

journey.

• What is the current state of the

data architecture and systems

integrations?

• What types of data are currently

being collected? (e.g., 1st party, 2nd

party, 3rd party, inferred)

• What are the gaps? What types of

data should be collected?

• What additional data mining

is needed to get the right data

surfaced to key decision makers?

• How can APIs help surface the right

data to the right channel?

• Do we need to buy additional data

to supplement our own?

• What kinds of surveys or customer

inputted data (explicit/implicit) has

the most value?

• What is the best way to engage our

consumer in preference setting and

progressive profiling?

• What are the core capabilities and

infrastructure needed to enable the

data across the customer journey?

• What technology or tools are

needed to enable this?

• What should be considered when

selecting vendors?

• What technology & systems

integrations are needed?

• How do we deploy, build & scale?

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phase 4: Plan & pilot roadmap, capabilities, test & learn

Lenati helps clients build a holistic roadmap to enable

personalization, guiding from single-channel tests to full cross-

channel, responsive personalization. Lenati works with clients

to understand what “the road to full-scale personalization”

should look like specific to the brand’s business needs including

defining the required capabilities, people, process,

technology and data.

In addition, it is imperative to create a robust test and learn

strategy that fits the needs of the business—to gather learnings

to inform the future state. These test plans and pilots can take

many forms from simple test-and-learns, to complex multi-

channel experience design.

Approaches to personalization pilots can vary depending on the

needs of the brand and desired test-outcomes:

• Single channel

• Specific customer or audience segments

• Individual end-to-end journey (e.g., shopping journey,

appointment booking journey)

Essential to the success of any personalization test or pilots

is the establishment of a detailed measurement strategy. We

encourage clients to include the following steps:

1. Define the pilot goals, objectives and outcomes

2. Articulate a clear pilot approach and journey

3. Map business objective to KPIs based on the

journey (e.g., acquisition, engagement, conversion)

4. Ensure the infrastructure exists to collect and

connect the right data

5. Align on a reporting approach to socialize the wins

and mitigate for quick-fixes

The insights and learnings derived from personalization tests

and pilots inform future tests and logic. In addition, a robust test

and learn strategy can prove out the return on personalization

quickly and effectively.

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phase 5: Implement & scale technology selection enablement & integration

Lenati helps deliver an end-to-end solution for personalization, from design to

implementation. One of the most important decisions we help guide clients through

is the technology vendor selection process for building out a robust tech stack to

enable your brand’s personalization vision.

One of the major roadblocks to implementation is integrating new systems with that

of legacy CMS or other back-end solutions. Retailers must consider their strategic

priorities while evaluating the various vendors, as only a select few possess the

capabilities to increase your bottom line.

When it comes to the technology integration and tool selection, we guide clients

through a thoughtful vendor-selection process to help answer and address key

considerations. We recommend clients vet vendors across various dimensions

including ease of integration, ability to onboard multiple data sources and capability to

deliver experiences in real-time.

What are the key differences in personalization engines?

What features matter most for my business?

How do I assess the trade-offs?

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Top three considerations when choosing a personalization vendor

1. Data flexibilityFirst and foremost, before looking at the core capabilities of a technology, identify

how easily the technology/tool can onboard data across multiple sources.

This requires the ability to easily collect first-party data while also providing easy

onboarding of third-party, CRM, loyalty, call-center and point-of-sale data.

Furthermore, it is essential that a platform can share audience data across devices—

your user’s behavior in a mobile app will significantly impact how she approaches her

next session on desktop, and a platform must reflect this.

Why is the data management capability so important? While every vendor will tout

the best machine learning algorithms, the strength of a vendor’s AI is determined by

how much data the machines have access to. Your machine learners are only as good

as the textbooks they get to study from!

1. Data

flexibility

2. Agility &

scalability

3. Recommendations

capability

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2. Agility, scalability and ease of useFar too often, retailers have big plans

to create cohesive, individualized user

journeys, but these often go unrealized.

This is a result of the fact that many

solutions in the market promise the world

but require weeks of implementation to

setup and then hours of time to build a

working use case.

To take personalization from vision to

reality, a tool must provide the ability for

marketers and merchandisers to build

experiences at scale, without heavy

reliance on developer resources. This

can be best achieved with a library of

templates that allow companies to create

personalized banners, recommendation

widgets, messages, promotional offers

and more with a few clicks. However,

only few solutions in the market offer this

service.

When evaluating vendors, ask to

see their library of out-of-the-box or

predefined templates for speeding

up workflow and time to market. You

can also challenge reference customers

about the actual time it takes to build

experiences from “soup-to-nuts” in a

platform to understand the real value in

templates that don’t force you to build

experiences from scratch.

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3. Recommendations capabilitiesFor the better part of the last decade,

retailers have turned to the hyper-specific

“point solution software” meant to serve a

singular value proposition, such as product

recommendations. While these platforms

are commonly associated as “best of

breed,” the truth is that without the ability

for data to flow freely to and from one

solution to another, the relevance of the

recommendations will ultimately result in

less impactful experiences.

The relevance of recommendations is

significantly strengthened by the amount

of data a platform can ingest and activate

(see point #1). Thus, innovative eCommerce

companies have started integrating

recommendations with the rest of the

experience by testing recommendation

strategies and layouts, and personalizing

recommendations based on a user’s

interaction with the rest of the website and

other channels of engagement.

Since recommendations are being brought

under the “personalization umbrella,”

it is vital to drill-down on a vendor’s

recommendations package.

Evaluate how many strategies a

vendor supports, which elements of

recommendations can be tested and

automatically optimized, and whether a

vendor supports combining AI-powered

optimization with custom merchandising

rules.

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Additionally, we recommend considering the following features and attributes:●• Ability to create personalized experiences for first-time visitors

●• Automated segmentation capabilities

●●• Omni-channel support across your brand’s ecosystem

●●• Robust data collection

●●• Layout personalization

●• Automated merchandising with manual controls

●●• Optimization and testing velocity

●• One-to-one personalization

●• Ability to be used by several stakeholders (marketers, merchandisers, product managers, etc.)

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In summaryThe benefits to customer loyalty, engagement and lifetime value of a well-conceived and executed

personalization strategy are clear. For retailers that are serious about realizing these benefits, the desire

to develop personalization as an enterprise capability can also be the catalyst to take the required step

of enabling customer data as a strategic asset. For personalization to have its greatest impact, brands

and retailers must do the foundational work of defining the strategic objectives that personalization

will drive and the key customer journeys that it will enhance. Those who follow the approach outlined

in this whitepaper will not only realize the benefits of being a leader in personalization, they will also

have measurably improved their ability to use data as a driver of their business—and will also see the

ongoing benefit of having rallied their organization around customer centricity.

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Lenati and Dynamic Yield Case StudiesFrom visioning to realized results, Lenati and Dynamic Yield have led

personalization with some of the world’s greatest brands.

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Sephora Digital SEA Personalizes BeautyIconic brand powers 82 live experiences with Dynamic Yield, achieving 6x ROI

Summary

Amidst a “retail apocalypse” where shoppers are abandoning iconic brands for generics and fast fashion,

Sephora SEA is thriving due to a steadfast commitment to providing the best customer experience. To create

the hallmark personalized in-store experience Sephora SEA shoppers receive online, the beauty retailer turned

to Dynamic Yield to personalize product recommendations, optimize digital channels for easy discoverability

and craft a cohesive experience across channels. Just six months after deploying Dynamic Yield, Sephora SEA

implemented 82 live experiences through the platform with PDP recommendations alone yielding a 6x ROI.

Sephora

“With Dynamic Yield, Sephora SEA customers can seamlessly find the right products for their beauty needs.

Personalisation is at the core of our eCommerce strategy and partnering with Dynamic Yield allows us to craft

truly customized shopping experiences across all touch points.”

Alexis Horowtiz-Burdick, Managing Director

Results

82 live experiences powered by Dynamic Yield

6x ROI from PDP recommendations

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Ocado Delivers Fresh ExperiencesWorld’s largest online grocery retailer increases conversion and average order value

Summary

Ocado, the world’s largest online grocer, operates three marquis brands in addition to their flagship

supermarket. To boost conversion rate and average order values across Fetch, Fabled and Sizzle, Ocado

used Dynamic Yield to personalize recommendations and send individualized messaging based on user

behavior. Ultimately, the retailer drove 8x more conversions from recommendations while also boosting

high value orders by more than 20%!

Ocado

“Dynamic Yield has made our marketing team a lean, mean machine, allowing us to seamlessly test

and deploy unique variations and strategies. We can quickly analyze our data in real-time and craft

experiences that significantly improve our core KPIs.”

Leonie Tamkin, Digital Marketing Manager

Results

8x increase in conversion rate from recommendations served by Dynamic Yield.

20% uplift in baskets of more than £75 from personalized messaging on homepage, basket page, and checkout.

7% boost in CTR achieved by personalizing homepage based on traffic source.

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Nike Delivers Personalized Experiences through Membership NikePlusPersonalizing a membership experience in-store and online

Summary

Personalization is a key driver of Nike’s membership strategy. Nike’s goal for membership is to “transform billions

of consumer interactions across the Nike Network into 1:1 relationships that drive real value for those members

and sustainable growth for Nike.” In Nike flagship stores, a personal shopping service known as Nike Expert

Sessions is available to members. The experience is enabled by an app for store associates that leverages Nike’s

knowledge of the customer and shopping behaviors to help the associate deliver a guided shopping experience

that is personalized to the member’s interests and tastes. Similarly, the experience using Nike’s apps is dynamic

and changes with usage to emphasize the content or features that are of most relevance to the member.

Results

40x higher conversion through the “Reserve for You” personalized feature in the Nike app

70% of purchases on Nike.com are made by logged in Nike+ members

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REI Personalized Marketing StrategyA marketing and experience strategy that speaks to REI member’s passions and motivations

Summary

REI retained Lenati to help increase REI member engagement through development of a robust, enterprise-wide

personalization strategy. REI previously treated every customer in a “one size fits all” way, marketing the same

products, services, and promotions—regardless of differentiated needs within the membership base.

Lenati conducted analytics to determine common customer purchase behaviors related to product categories,

outdoor activities, and key customer attributes, including (but not limited to): tenure, annual spend, geography,

activity preference, and associated skill level. These insights fed into a personalized marketing strategy that

provided information and offers to customers based on their preferred activities and related needs. Lenati

worked with cross-functional stakeholders to develop a single-channel pilot in email. Proving out the return

on investment, Lenati developed in parallel the long-term enterprise strategy and “crawl, walk, run” roadmap

for expanding the personalization strategy across all channels, including in-store, online, app, social media and

outdoor adventures.

Results

10% lift in topline revenue over 3 years

10% reduction in customer churn

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Krista Gunstonehead of retail strategy

[email protected]

Martin Mehalchinpartner

[email protected]

other contributors:Youngji Kim John Kendall

Shana Pilewskisenior content marketer

[email protected]

Lenati Many of the world’s most valuable brands and retailers engage Lenati

to help them acquire, grow & retain customers. Our expertise

is aligned to achieving a stronger customer connection. We are a

marketing services and experience design firm that works on critical

initiatives that transform marketing and the customer relationship.

We are recognized by industry analysts as a leading strategic advisor

on loyalty and retention. From individual programs to holistic brand

strategies, we can help you build your approach to fostering behavioral

and emotional loyalty to drive deeper engagement with your customers.

Our focus is to deliver results and we work hand in hand with our clients

to implement market leading advanced marketing practices including

CRM, personalization and membership and rewards programs.

Dynamic YieldDynamic Yield’s personalization technology stack helps marketers

increase revenue by automatically personalizing each customer

interaction across the web, mobile web, mobile apps and email. The

company’s advanced customer segmentation engine uses machine

learning to build actionable customer segments in real time, enabling

marketers to take instant action via personalization, recommendations,

automatic optimization & real-time messaging–in a single platform.

Dynamic Yield personalizes the experiences of more than 600 million

users globally and counts industry leaders like IKEA, Urban Outfitters,

Ocado, and Stitch Fix among its many customers. Based in New York,

the company has more than 170 employees in five offices worldwide.