A Sweet Story
Vosges Haut-Chocolat broadens its reach among luxury buyers
When Noel Burkman joined the executive team at Vosges Haut-Chocolat in 2014, it didn’t take long for him to get a taste of what was in store. “The company was committed to growth, and I could see that there were some great marketing opportunities ahead. But we needed some kind of roadmap to direct our efforts.”
Burkman faced some challenges — specifically, how to maximize sales for unusual products like chipotle-accented chocolates and truffles with bourbon mash.
Vosges was created in the mid-1990s by Katrina Markoff, a Vanderbilt University graduate and French-trained chef who had an interest in pairing chocolate with unique spices and flavors. Markoff began selling her creations to high-end retailers such as Neiman Marcus and creating a niche in the luxury-aspiration market; today the Chicago-based company sees $30 million in sales through more than 2,000 outlets including retailers such as Whole Foods Market and Barney’s, eight company-owned boutiques and its website.
When Burkman came aboard as vice president of technology and e-commerce, Vosges was beginning a planned business expansion. “We wanted to get to the next level, and I had to take a look at how we could get there from a technology point of view,” he says.
The first thing Burkman saw was a social media strategy that was becoming out of date. Vosges was an early adopter of collecting customer email addresses to send offers and product updates, but with more shoppers being careful about giving out email addresses and increasingly sophisticated spam filters, that approach has become less effective.
“Our first job was trying to figure out a way to communicate with our guests in a way that works for them,” says Burkman. “It was also important to understand them a little more. We wanted to know who they are and what they respond to. And how do we find more potential guests who don’t know about us yet?”
Burkman saw the move to a data-driven marketing effort as part of the company’s evolution. “With so many different channels coming online, you’ve got to be very flexible in your marketing and use your data analysis to back you up.”
Markoff had built the business primarily on instinct for what she believed would work, but Burkman saw that future growth depended on different marketing tools. “We needed to be more data-driven in our guest communications, which meant a new marketing philosophy and building layers of sophistication in our marketing plan.”
Burkman was referred to AgilOne, a data analytics firm that has worked with retailers including The Body Shop and Sports Authority. In mid-2014, AgilOne began analyzing Vosges consumer data and developing a marketing plan.
“What we have today in many businesses is a data integration challenge,” says Dominique Levin, chief marketing officer for AgilOne. “The average consumer has become so spread out online. He or she might have three to five email accounts, they move frequently and they may change their name with a marriage. This can make finding your particular customers much more difficult.”
Levin believes successful retailers will learn from the personal touch that characterized pre-Internet shopping. “Years ago we did much of our shopping locally and merchants knew our names, they knew our families and they often recorded our personal preferences so they could better help us in the future. Consumers didn’t see that as an intrusion of privacy — they saw it as extra service,” she says.
“This is where a luxury company like Vosges can take advantage. Their goal is to create a relationship with their customers and use a personal touch to create long-time, multiple-item buyers. Our goal is to help them find those data points that reach these buyers.”
Using data analytics, AgilOne hopes to provide retailers with greater ability to segment their customer base and use that segmentation to better target marketing efforts. “Something like 70 percent of customers are ‘one and done,’” says Levin. “That presents a huge opportunity for a retailer to re-engage with those consumers if they can reach them.”
The crux of AgilOne’s approach is predictive analytics — basically feeding customer data through computer algorithms to make an educated guess about future consumer behavior.
The analytics cover a wide variety of channels, including in-store, online and call centers. “I’m often surprised by how many retailers still keep the data from these channels separate,” says Levin. “They’ll have an online marketing team, a store marketing team … they’ll even have separate databases for each channel. You can’t do that now in this age of predictive cloud marketing. You need to be able to break down the data from all of your customers to see what works and what doesn’t.”
Pursuing a data-driven marketing strategy hasn’t been a completely smooth journey for Vosges, which is fairly typical for smaller companies. “Since much of what we did before was based on gut instinct … there was a little skepticism about throwing everything out the window and trying something new,” says Burkman. “However, we saw that if we wanted to grow the company as planned, we needed to be more scientific with our marketing.”
Near the end of 2014, Vosges tried its first email campaign using the AgilOne predictive marketing cloud with consumers who had abandoned online shopping carts. “We had tried reaching out to these customers before, but we didn’t have the ability to target what was in their carts and segment them in other ways,” says Burkman.
The goal was to see whether it was price sensitivity that drove some away before converting, or some other factor. “In our case, we can be a bit off-putting as far as flavor profiles and product descriptions for people new to the brand. The more detail we could get from these customers the better we could reach them again,” he says.
The results of the first test are still being processed; Burkman is looking carefully to see how they can make adjustments for future campaigns. “So far we’re seeing data points that we’ve never seen before. We’re seeing what those customers responded to and what made them leave before purchasing.”
AgilOne will produce a final report on the email campaign that could identify market motivators for each group of abandoned cart customers. “What we look forward to is the ability to identify a group that will convert with, say, a 10 percent discount,” says Burkman. “Another group may come back and buy with a 20 percent discount, while another group may not be interested in any of your products, which is good to know.”
For Burkman, the process so far looks promising. “It’s not a crystal ball — we’re not seeing what guests will definitively buy from us, but we’re getting a sharper image of that guest and his or her motivations, which will help us in the long run.”