Will E-Tailers Get Closer To Customers?

It's been almost a decade since I first read The One to One (1:1) Future by Don Peppers and Martha Rogers, Ph.D. Yet, the lessons that the book shares on "1:1 marketing" continue to affect my views toward relationship marketing or CRM (customer relationship management). 1:1 marketing can be defined as selling as many products as possible to a customer at one time, over the lifetime of that customer's patronage. This approach differs from the traditional strategy of selling as many products as possible to whomever will buy them. To market 1:1, companies must be in touch with a customer's specific needs and cater their offerings toward these needs.

These days, the sales channel that is struggling the most with the 1:1 marketing concept is e-tailers. For the most part, e-tailers still have limited capabilities to capture specific customer/shopper information - thus making marketing 1:1 challenging. However, e-tailers are making strides. I spent time with some e-tailers who are implementing innovative customer marketing strategies at the ICD e-Tail Solutions World Forum, March 26-29, in Chicago.

Marketing To Customers One Group At A Time
Eddie Bauer is one company that has implemented a unique CRM strategy for its shoppers. The retailer is not offering 1:1 marketing yet, but rather 1:group marketing. Integrated Solutions for Ret@ailers first featured Michael Boyd, Eddie Bauer's director of customer relationship management, in the February 2001 issue (p. 40). The article discussed how Boyd and the IT staff used data mining and business intelligence tools to gain a clearer picture of Eddie Bauer's customers in all of its sales channels (Web, catalog, and store).

Since that article was published, Boyd and his team have gathered the results of this effort. Eddie Bauer identified four different customer groups based on shopping behavior such as spending level, spending pattern, product preferences, and channel preferences. The groups include: too busy to shop, stylish wannabees, professional shoppers, and recreational shoppers. Eddie Bauer is now targeting its marketing such as e-mails and mailers to these four groups. For example, a "stylish wannabee" customer may receive an Eddie Bauer e-mail with the latest fashions, while a "too busy to shop" customer may receive an Eddie Bauer e-mail with sensible outfit suggestions.

Displaying Customer Preferences
Eddie Bauer is also carrying this 1:group marketing strategy into its brick-and-mortar stores. The customer data results revealed what times of day the four customer groups typically shop. So, in some of its flagship stores, such as New York City and Chicago, Eddie Bauer changes its window displays depending on the hour of day to target the specific customer groups.

This could have been a costly strategy, if Eddie Bauer was interchanging different printed posters and mannequins. However, the retailer made a long-term investment in large, flat plasma displays that can show different pictures of outfits at different times in the store window. The retailer is tracking effectiveness of these electronic displays using video cameras and a custom software package. This solution tracks the time of day, the number of people outside the store window, and the number of people entering the store - allowing Eddie Bauer to gauge the appeal of specific images in the plasma window displays.

Only time will tell if this marketing strategy will be lucrative for Eddie Bauer. However, the e-tailer is already seeing positive results with improved response rates to its targeted e-mails to these customer groups.