Recently a digital-native furniture and home goods retailer engaged with Attune to enhance their customer experience with personalized merchandising. The retailer has nearly one hundred categories containing up to thousands of products each, so applying Attune to optimize the display order of their products within categories was a natural place to start. With their very first Attune application, the retailer is realizing more than a 10% lift in revenue over their default catalog browsing experience.
Any third-party service integration has costs and risks that need to be balanced against the potential gains. Read on to learn how the retailer took advantage of Attune’s unique engagement approach to minimize their costs and risks, to maximize the impact of personalization on their customer experience, and to validate their overall return on investment.
Minimizing Integration Cost and Risks
With any integration comes the risk that the integration costs don’t measure up to the benefits delivered. At the start of the engagement, the retailer’s team minimized this risk by first evaluating the potential benefit of different Attune applications in a pre-integration pilot.
To minimize the cost to pilot, a combination of the retailer’s readily available customer data in flat file form was combined with additional catalog data obtained from crawling their website. This data was used to generate initial personalization models supporting the candidate applications, enabling the merchandising improvement from each application to be estimated. The retailer’s team was then able to select an initial application for integration with the highest potential payoff: automated, visitor-specific ordering of each product in their category browsing experience.
Using the pilot data as a blueprint, Attune then generated a customer-specific data API that significantly reduces the retailer’s effort to supply data to Attune on a continual basis. The retailer has the option of pushing data to Attune via REST APIs or through scheduled file uploads. To support the latter approach, Attune supplied an application that securely and efficiently uploads their data files with just a simple, one-line, script command. To identify their visitors to Attune and integrate the personalized merchandising results for each visitor in real-time, the client integrated the Attune software development kit in their programming language of choice in less than a day.
Risk mitigation doesn’t stop at integration, however. Given how core catalog browsing is to the retailer’s customer experience, performance and availability are critical. For this application, the Attune service responds in under 50ms on-average with an error rate of .005%. When the rare error does occur, no harm is done to the retailer’s customer experience as their original product ordering is displayed to the customer as a fallback.
Maximizing Personalization Impact
The nature of the retailer’s catalog makes personalization especially challenging. On a given day they may have tens of thousands of products available for purchase, and a typical product has a lifetime measured in days vs. weeks- due to frequent catalog updates. These shorter product lifetimes effectively reduce the amount of time a personalization model can leverage what it learns about each product.
To overcome this challenge, the retailer supplies Attune with catalog information, extensive visitor activity and even current stock levels for each product. That data is used to support personalization models that are especially sensitive to product popularity and inventory changes over shorter periods of time. Attune uses multiple metrics to evaluate the effectiveness of different merchandising algorithm configurations and ultimately a blend of approaches are combined to achieve the optimal result.
Combining the retailer’s data with Attune’s algorithms has lifted their revenue more than 10% over their default catalog browsing experience. The retailer can enable even greater wins by improving the dataset used by this initial application or by applying Attune to other aspects of their merchandising experience.
Validating Return on Investment
The retailer can access daily reports that show the difference in revenue performance between visitors that receive their default catalog browsing experience and those that receive the Attune-optimized experience, making the validation of their return on investment both straightforward and transparent. More than a simple, one-time, AB test: Attune always runs with a control group of visitors to consistently validate its impact over time, as results can vary frequently due to seasonality, new product releases, and other factors.
Simplifying the calibration of costs and benefits, the retailer only pays Attune fees based directly on the revenue lift they realize. This pay-for-performance model also aligns incentives for the long term, as Attune continues to collaborate on additional personalization applications and integrates more of the retailer’s data, enabling even greater wins in the future.