Getting Personal Boosts Revenue

Personalization technology is helping plenty of Web retailers create customized electronic shopping boutiques whose inventory and pricing can vary from shopper to shopper online.

At Cabela's Inc., a sporting goods retailer in Sidney, Neb., it's also helping to boost supply chain efficiencies across all three of the company's sales channels: stores, catalog and online. The same technology that tracks individual customer preferences and shopping habits is increasing inventory turns and revenue, all within the context of building a branded experience, says Tim Miller, director of Cabelas.com.

The focus on personalization technology fits with Cabela's overall strategy of one-to-one customer service. This applies in its eight stores as well as at its call center, which handles catalog orders placed over the telephone plus all customer queries, regardless of where or how the customer shops.

The majority of customer information culled from the call center, catalog orders and in-store visits is collected via a PC-based application and then stored in a data repository hosted on the company's IBM AS/400. Miller says he saw no need to duplicate the repository when Cabela's launched its Web commerce site in November 1998.

Instead, he wanted an e-commerce platform that plugged into the existing infrastructure used to service other Cabela's customers. Ultimately, Cabela's opted to install an out-of-the-box version of Cambridge, Mass.-based Art Technology Group Inc.'s Dynamo online commerce application with its personalization engine.

Miller used established application programming interfaces to link the call center and catalog sales information with customer information generated via the Web site and other back-end information, such as order fulfillment data.

The effort will eventually let in-store personnel view a customer's complete profile. For example, an in-store employee might notice that a customer previously purchased a particular type of hunting rifle and that there is now new product information to be conveyed. This single view of the customer will also give Cabela's salespeople an opportunity to sell shoppers other goods and services related to their interests and past purchases.

For online shoppers, the automated e-commerce system can alert them when particular items in their sizes are priced at closeout. As a result, Cabela's is able to cut costs and clear out excess and odd-lot inventory by advertising via e-mail rather than the Postal Service. Advertising sent via the U.S. mail doesn't reflect real-time inventory conditions as the e-mail ads do.

Integrating customer and shopping data from all channels into a single repository helps keep the Cabela's brand experience dynamic, a crucial factor in e-commerce success, according to Geri Spieler, an analyst at GartnerG2 in San Jose.

"The challenge for an online store is to give the shopper a consistent brand experience and a great online customer experience, particularly if the store has a physical or multichannel presence," Spieler says.

Using personalized e-commerce to unify the various channels has also generated hundreds of millions of dollars in incremental revenue at the privately held retailer, Miller says. After browsing Cabelas.com, "people are better informed when they come into the stores," he says. "They're ready to make a purchase, and we're able to recognize their individual spending habits."

Giving online customers the option to receive information about the more than 100,000 products in Cabela's inventory is possible because Miller and his 52-person team created an IT architecture that includes more than just shopping.

Customers can receive pretty much any kind of product, pricing, shipping and other information they need—even if they don't request it. For example, the system lets customers know if the specifications of an item have changed or whether there is something wrong with a product's sizing. It also automatically alerts customers to changes in shipping times and permits online live chat to help customers resolve order or delivery issues.

Gene Alvarez, an analyst at Stamford, Conn.-based Meta Group Inc., says retailers that had a catalog business prior to establishing an e-commerce operation have an advantage in personalization because the retailer is accustomed to communicating with customers when they're not face-to-face.

"They've learned how to use the mailing model to target customers, so using e-commerce tools to do similar things isn't a far stretch," Alvarez says.

The personalization technology involves the products as well as the customers. For example, because there are many government restrictions on the sale of hunting paraphernalia, the ability to tailor product data based on customers' geography helps Cabela's provide shoppers with the appropriate information.

"There is a correlation to the type of technology and the type of product," says Alvarez. "Not all products are sold equally."

The bottom line, he says, is that personalization technology can enhance the customer experience and deliver operational efficiencies like increased inventory turns. What the Cabela's example shows is that getting those returns involves fully integrating the technology with the overall retail experience, not just your e-commerce site.

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Cabela's Inc.

Location: Sidney, Neb. Founded: 1961 Business: Retailer of hunting, fishing and outdoor gear Status: Privately held, family-owned company Number of employees: 5,000 Retail channels: Eight stores, catalog operation, Cabelas.com Web commerce site

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