Loyalty for Shopping Sites

At Shop It To Me, we interview people all of the time about their shopping habits, and with the exception of maybe Amazon, there currently really is no one major player among pure shopping search sites.

When someone wants to search for an item or shop for an item, they either shop a number of individual retailers or go to google and do a search.    Yes, shopping aggregator sites like Nextag, Shopzilla and Shopping.com get millions of users coming to their site, but for the most part their traffic is derived from some variant of Google search results.   Google “black trousers” and I promise you’ll see at least one of theses sites in your search results.  They’re awesome at figuring out how to be the top result.   But the relationship is really between the user, Google and the end retailer.   If Google one day swaps one of these aggregators for another the user doesn’t care, let alone notice.

And while ‘Loyalty’ and “Cash Rebate” sites have people coming directly, the customer’s loyalty is to the rebate — not the actual site.  That customer may come now,  but they’ll also be the first to leave when a retailer or another competitor has a better rebate or discount.

Shopping queries account for a substantial percentage of all searches, and while we have solutions for “searches for people” (LinkedIn/Facebook), Travel (Kayak),  Restaurants (Yelp) and general information (Google) we have no great solution for products.

I believe there is a huge opportunity to build a shopping experience (site, mobile, email) with real loyalty.  A site that people will actually access directly as opposed to via the search engine and will give customers real value.

To do this, I believe we need to rethink how shopping sites work altogether.  The site that gains people’s long term loyalty will be the one that optimizes the relationship as opposed to just optimizing the transaction.  It will be the place you go because it gets you;  it knows what you want, what you like, what you crave.  It will be the place that looks out for your best interest.  Going anywhere else would be a waste of your time and money.

At Shop It To Me, we’re building a next generation platform that I believe can one day realize that vision.  We’re not there yet, but we’re on our way and I’m really excited about the progress we have made so far!

And if you want to help us make this a reality, join us!

Personalization does not have to be “Creepy”

On Sunday, The New York Times ran an article arguing that retailers’ personalization attempts are backfiring because they are becoming too personalized. The piece quoted several retailers who had tested sophisticated personalization tools with poor results. They concluded that consumers just don’t like it if retailers know them “too” well.

I think that conclusion is off the mark.  Retailers are having problems not because they are too personalized but because they are not giving customers the four things needed to make personalization succeed:  Transparency, Control, Accuracy and Trust.

Let’s start with transparency. People feel something is “creepy” when they either don’t understand it or didn’t know it was happening.  Personalizing your site is meant to help the customer–so treat it like the awesome feature it is instead of a devious secret you don’t want the customer to know.  Announce on your Web site that “The site will get better with every click you make.” Tell customers from the beginning what you think you know about them (and how you figured it out) and update it as they click so they can see how your algorithm works.  Most people are secretly enamored with what technology can do and a site can go from “creepy” to “cool” very quickly if you just explain how you do your magic.

Second, to succeed with hyper-personalization, a site must give their users control.   People really like to be in control (just read Dan Gilbert’s popular book Stumbling Upon Happiness).  When personalizing a site, give your users a chance to change what you know about them, and/or turn it off completely.  Most people won’t make a change, but everyone will appreciate that they could.  On top of that, people have a strong psychological urge to change things that look incorrect. So if you make it easy to change the things that might be wrong, you’ll have users happily giving you the correct information.

Third, to win at personalization, a site has to be accurate.  The New York Times article cited an example about women with families who complained that a retailer showed them only women’s clothing (and not men’s) because of their gender. This is not a problem of hyper-personalization; this is a problem of inaccurate personalization.  Companies assume the best way to “understand” a user is to watch the few things they click and buy (and where else they travel on the web) and make judgments based on that, but that is the equivalent of watching a person shop for a few pairs of jeans and shorts and then assuming that they are not likely in the future to buy shirts.   Great personal shoppers interact with their customers and start a dialog–they talk to them and find out what they really need both now and in the future.  If you really want to be a retailer who differentiates on personalization, you are going to have to do the same.

Which leads me to the final  (and probably the most difficult) challenge:  Trust.  Consumers will be willing to give you their information and let you use it if they trust that you have their best interests at heart.  If your company is using personalization as a way to boost revenues, you’ll only get so far —  the customer will quickly become aware of this and feel exploited. If, on the other hand, your company truly is dedicated to building a great customer experience (even above revenue) your customers will be much more willing to share their information.  Most retailers would say they are customer-focused but few really are.  A good litmus test:  Would your company prioritize an investment in personalization if people loved it but it was guaranteed to produce no additional revenue?

So there you have it–sites can succeed in personalization, but they need all four of Transparency, Accuracy, Control and Trust.  Or to say it in a pithy way, sites will need a whole lot of TACT.

Blue Oceans

In my previous post I talked about how having a focus is super important to a product’s success.  The question comes, what to focus on?

Here’s one angle.

I have been a big fan of Kim & Mauborgne’s Blue Ocean Strategy since I first read it in 2008.  If you haven’t read it yet, I encourage you to get it.  The basic premise is well known.  Instead of competing on the same attributes for the same customers as everyone else (i.e. red ocean), go after the customer who is not served and focus on the attributes most important to them.     For example, take Southwest, who carved out a great business for themselves by competing not with other airlines, but for the customers who normally take buses and trains.  And there are dozens of other examples of companies who got their first foothold going after markets that did not really exist beforehand (Honda and racing motorcycles, AirBNB and the home-owner willing to rent on a nightly basis, Salesforce and small sales teams without IT resources).

When I started working on Shop It To Me in 2004, buying apparel online impulsively was a blue-ocean.  Online shopping at the time was optimized for planned purchases — electronics, books and DVDs. Comparison shopping sites ruled the day and few people (women included) thought of it as a place to buy clothing and certainly not impulsively.  I believe a 2004 survey showed that 75% of women would never buy clothing online because of fit issues.  Sites like Gilt Groupe did not exist; apparel retailers were still looking at the Internet as an experiment, and designer brands often did not even have a website let alone a store.   Investors looked at our service — a free personal shopper that would get people to buy items they didn’t plan on buying that day — as a novelty.  Who would buy clothing on impulse without being able to try it on?  47 of the 50 investors I pitched turned me down — mostly because they did not think impulse apparel purchases was a big enough market.

Today the impulse shopping space is a complete red-ocean. Hundreds of companies are trying to be in the “discovery” or “sample sale” space.   The fact Shop It To Me launched and built out our site before these sites existed gave us a huge advantage.  We were different and were able to build out our brand identity before the space got crowded.  It allowed us to grow our user base and leverage that base to make our future products even better.   Had we started now, we likely might not have separated from the noise.

When you think about the market you are in, instead of blindly going after the same customers everyone else is going after with the same features and attributes,  step back and think — who is NOT using the product?  Who is underserved?  Who do all of the competitors overlook because they are just not profitable enough?   What do those people value the most and what product would best suit them?    If you see an opportunity, sacrifice the “good users” and go headstrong into this new market instead.   Focus on just the attributes that will help those people and get them to pay up.  Keep building and take that market away.    The entrenched players won’t be able to compete and you may end up the leader of a new market bigger than the one that currently exists.

Focus: What is your product going to be awesome at?

One of the most important things to do when you are building a product of any size is to focus.   Pick the few things you are going to be amazing at and the many things you will not be.  It’s hard, but it’s the only way to succeed.

Try to be great at everything and you’ll end up with a mediocre product.  Focus on one thing to be great at and you have a chance to dominate your competition.  Why?  You can align your entire company (sales, marketing, product, dev) on just one goal and therefore do it so well nobody can compete.

Take Google Search.  Since their launch their focus has always been one thing:  Get you an answer to your question as fast as possible.  Their home page doesn’t have ads or news or anything but one big search field.  Most of the features they add have traditionally been about making that better.  Or take Walgreens. They don’t have the best selection or the lowest prices.  But they succeed because they are the most convenient with stores on pretty much every corner.  They’ll pay up to be on every street corner so that at the moment you need something you first come to them.

When we are thinking of building out a new product, I generally ask three questions: Where do we want to Win? Where are we just going to Play (and be just good enough)? And where are we purposely going to Lose (and let someone else win)?  A great product will have all three.

At Shop It To Me, we want to win on personalization — understanding you, the consumer, like nobody else  and then showing you the most personally relevant items on sale.  And almost everything we do reflects that.  We launched first in a category (clothing) where personalization is super-important.  We require all of our users to tell us all of their individual preferences before they can sign up.  We have invested in sophisticated technology to figure out which sizes a retailer has available each morning and which are sold out so that your email only has items in your size.

When it comes to personalization — we purposely do the hard stuff.  Our system knows which items you have seen before so you don’t get duplicates and even tries to guess items and sales you might like based on not only your behavior but the preferences of others like you. We send millions of emails every day and each one is different —  individually personalized for its recipient.  It’s the reason why my mom, my wife and my teenage cousin can each feel like the Shop It To Me emails they receive are “just for them”.

To keep this focus, we are willing to give up on winning other things: We don’t have a celebrity promoting us; our site is pleasing but there are many that are prettier; we don’t include fashion advice or content in our emails;  our item pictures are good but definitely not the best.

And for many things that are critical to most shopping sites,  we are willing to lose completely:  we don’t play SEM arbitrage and our SEO is terrible.  Why?  None of these matter for a personalized product.  In fact, they hurt it.  Instead of optimizing for a transaction, we want to build a long-standing relationship with our users — and that requires a different type of interaction and focus.

In fact, I believe it is our unending focus on a personalized shopping experience that lets us succeed and thrive in a crowded marketplace.    While some companies have made personalization a feature (and are trying to shortcut it by guessing based on what you clicked or optionally asking you) — we have made it our core which means when it comes to building a product “just for you”, we can beat them every time.

So my question for you product managers out there:  What do you want to be awesome at?

7 Email Marketing Mistakes Not To Make

In case you have not seen it yet, my article on the 7 Mistakes Not To Make In Email Marketing is now online at Inc.com!

 

I’m Back, Baby!

I’m Back, Baby!

Hi again!

As you probably can infer from the title, I am going to start blogging regularly again, my wife and I now are proud parents of a cute baby girl, and I am a fan of double entendres/puns.

The last year has been crazy, becoming a first-time parent and setting up a whole bunch of new initiatives at Shop It To Me,  some of which are now in our system, some we hope to launch soon, and some which will never see the light of day.   It has been a crazy-fun ride  and I hope to relay as many insights as I can in a nifty once-a-week format.

I’ll be writing about these experiences — starting and running Shop It To Me, a successful eCommerce company in the Internet-hot SOMA region of San Francisco, so expect posts on commerce, startups, product management, user-psychology, and being a dad.

Stay tuned!

Website Checkout Best Practices and Credit Card Expirations

At Shop It To Me, we are always reading studies and articles on ways to help make shopping an easier and more fun experience .

I recently read a Ecommerce Usability study with some great insights on how to make checkout pages more efficient. If you haven’t read the summary of changes, I recommend it. A lot of the suggested changes are really small and at first counter-intuitive (which I always like).

Here’s one example on checkout expiration dates:

Many sites at checkout ask you to select the month of your credit card expiration from a list of names (i.e. They’ll be a list of months like “January”, “February”, “March”, etc… ) . At first, this just makes sense makes sense as people are more likely to think of “June” as a month than the number 6. Why confuse them?



The problem is that credit cards list the expiration as digits and not as a name (i.e. if your credit card expires June 2011, it will be listed on your card as 06/11 )

When a website asks you to select “June” as the month, they are actually forcing you to do the translation from 6 to “June” in your head. They are actually making you do extra work to check out. In the study, they found that just changing the expiration to two-digit numbers had a significant increase on completion rates.

You can see the remaining top 15 results from their report here, and the entire report can be purchased for I think about $80. Well with the investment if you are an ecommerce site with an existing checkout process.

The Beginning….

We’re live!

After about a month of waiting, iamcharliegraham.com is now live. As some of you have requested, here are my rants and raves about entrepreneurship, Product Management, Shop It To Me, and eCommerce. Enjoy and please join in the conversation!

–Charlie