YNAP(Yoox Net-A-Porter Group), a leading Italian luxury brand operates several multi-brand luxury e-stores delivering to 180 countries globally.
Per Internet Retailer, their 2017 digital spend on mobile and cloud initiatives was close to $100M. The brand has a loyal customer base of ~3 million with an average order value of $387. Their website attracts ~30 million monthly unique visitors.
Luisa Via Roma (LVR), the luxury retail brand improved their conversion by 400% by using targeted tools such as Dynamic Yield to power eight country-specific websites, personalized search results and Emarsys for personalized email marketing.
Stitch Fix, the personalized commerce startup exemplifying creativity with stylist picking your orders in the mid-high end apparel space, IPO’d for $2 billion dollars.
This is a strong proof points of the fundamental shift taking place in luxury retail i.e. from Generalization to Personalization.Personalization is of primary focus for luxury brands with a strong emphasis on web, mobile and social.
- 35 of the top 37 luxury online retailers surveyed by Internet Retailer delight their consumers with a mobile app and mobile commerce experiences.
- 50% of health and beauty category comes from phones and tablets, followed by jewelry at 48.2% and apparel and accessories at 39.2%.
- Burberry’s Facebook page has 17 million followers. 8.4 million followers on Twitter.
So what is Personalization?
At the very core, it is marketing the product/search/experience/shopping based on the customer intent, vs. the merchandiser’s intent.
Let’s deconstruct the Stitch Fix business model.
The experience begins where customers browse and select from a common catalog, where the customer intent is understood to begin with:
- All customers take 10-15min question survey, giving an opportunity for the brand to learn about your likes and dislikes, sizes, taste, style and other preferences such as budget and lifestyle.
- And this information is curated on the platform and is passed on-to a Stylist, who then hand picks 5 pieces of clothing that will be delivered at the customer’s doorstep on a particular date.
- Once it’s delivered, the customer has the option to keep what they want and return the rest, where billing will be adjusted based on the items returned, with free shipping, both ways.
This is significantly different from a general eCommerce experience. The stylist did all the thinking on behalf of the customer after reading the questionnaire. Post-delivery, customers can keep the merchandise if they like or, return if they don’t.