What Artificial Intelligence Means to TechStyle Fashion Group and BloomNation
By Mike O'Brien | April 10, 2019
How will artificial intelligence impact your marketing? No matter who you are, the answer to that question is most likely, “tremendously.” That’s why Sailthru has been traveling the country hosting events about the impact of AI. Each AI Roundtable features panels of brilliant marketers discussing how they put it to use at their own companies. Next up? We’ll be back in Los Angeles on May 9! Click here to register.
For every Netflix, a company that recaptured $1 billion in revenue by boosting search results with AI, there are plenty of marketers with plenty of questions. In Los Angeles, we were recently joined by Eric Pescatore, Director of Strategy & Analytics at TechStyle Fashion Group, and Eric Wu, Head of Product & Growth at BloomNation.
The two marketers shared how AI has impacted their own brands. Here are three examples:
Segmenting and Testing
Prior to joining BloomNation in 2016, Wu ran digital acquisition and retention for Edmunds, an online resource for car buyers. There, his team used AI and machine learning to complement the customer journey. They’d predict consumers’ actions based on their onsite behavior, which really lent itself to audience segmentation and testing.
“Our email marketing would show someone an SUV versus a sports car. Or we would show another set of people a red car versus a black car,” says Wu. “Based on what they clicked, and even the mouse movements on the first page, we made predictions. And then we had to slowly change that journey for them and nudge them along where we knew they wanted to go.”
Jason Grunberg, Sailthru’s VP of Marketing, moderates the panel discussion between Eric Wu and Eric Pescatore at our recent AI Roundtable in Los Angeles
Wu used AI to accelerate people along the path to purchase, careful not to be too aggressive. After all, you can’t make someone want to buy a car. Pescatore, an avid tester who tested 30,000 in ads alone last year, notes that fashion is the opposite. Retailers are always “trying to inspire you along the way to buy something else.”
Wu points out that smaller companies see the results of tests much faster than their larger counterparts. But at the same time, smaller companies don’t always have the robust data sets necessary to truly test and utilize AI to its full potential.
That’s not a problem for Amazon, which announced its “transfer learning” predictive API at Shoptalk last month. The ecommerce giant took its own learnings around pricing and recommendations, and provides the machine model to other retailers.
“For BloomNation, we put in review data, everything we know about the products and we’re going to feed it through Amazon,” explains Wu. “It suggests what you should merchandise your product for and how you should price your product.”
Pescatore adds that with membership-based businesses, not everyone has the same starting point. Some consumers like the early boost of a discount or the promise of free shipping. Others don’t. Therefore, giving everyone the same discount hurts the bottom line. It also inhibits your ability to learn which customers fall into which category.
Personalization is the hallmark of the shopping experience for TechStyle brands: JustFab, ShoeDazzle, Fabletics, FabKids and Savage X Fenty. AI enables them to optimize their personalization, giving them the vibe of a family-owned store in a frontier town, as Pescatore puts it.
“They knew the person coming in, what they bought last week, what they bought a month ago, how someone’s doing, what type of emotion that’ll cause them to buy right now. And they were able to have that one-on-one experience,” he says. “Somewhere along the way, we got away from having that one-on-one experience and being able to just say, ‘I really know you.’”
He sees AI as instrumental in helping retailers move beyond the collaborative filtering style of marketing to “someone like you.” TechStyle wants customers to feel like the brands actually know them and understand their preferences. It’s also worth noting that in Sailthru’s most recent Retail Personalization Index, three TechStyle brands placed in the top 15.
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