Are You Being Served?
Knowing what kind of underwear someone prefers connotes a certain level of intimacy, but building a relationship is something different altogether.
Online intimate apparel retailer Freshpair has taken customer knowledge to an art form, whether it’s in-home bra fittings via phone or scheduled quarterly shipments of new underwear from favorite brands.
“If we sold just high-end lingerie or men’s designer underwear, it would be far easier to create a compelling store experience around that,” says Freshpair president Matthew Butlein. “Since our assortment runs the gamut — we carry almost every underwear or lingerie category that’s available — we have to understand where our customers fall ... in order to build a relationship with them.”
Getting to know you
Understanding customers’ preferences and motivations is as foundational to Freshpair’s philosophy as good undergarments are to the well-dressed. Though the company is relatively small, “we’ve distributed the responsibility for quantitative understanding across each organizational function,” Butlein says.
Freshpair teamed with PivotLink, which delivers its software-as-a-service (SaaS) business analytics via cloud computing. “The beauty of PivotLink is it works on every level,” Butlein says. “The reports are designed for each function and are available for all to use.”
With PivotLink’s assistance, Freshpair has been able to segment its data, which in turn has “helped Freshpair understand some interesting content promotions and relevant messaging that might go to those segments,” says Joe Dalton, PivotLink’s chief marketing officer. “The first thing [most retailers will] do is segment the customers by spend ... loyal customers, potential loyals, everyday shoppers and occasional shoppers.
“[Freshpair is] unique in the order that they apply that,” he says. “They looked at their customer base and said, ‘It’s not really the spend that’s the first order of ranking, it’s the brand affinity because it tells more about who they are. It’s about understanding what you like, what you don’t like, your behavior, the language that you use. Spending doesn’t tell you that, it doesn’t explain what kind of person you are.’”
PivotLink also allows Freshpair to integrate third-party data. “We’re able to add things that you don’t know but would like to know,” Dalton says. “In Freshpair’s case, lifestyle marketing is important ... Adding third-party data to first-party data gives a much better picture of the customer.”
Over time, Freshpair can determine the motivation behind its customers’ purchases as well. Take the shapewear category: “When you look at the order level, it’s hard to tell the difference,” Butlein says. “When you look over the lifetime, you may see that the purchase is one among many and not a category they regularly browse when they’re on the site. That kind of insight would allow us to market event-based shapewear to one customer and ... shapewear that can be worn every day during the summer [to another].”
Knowing customers at this level also provides Freshpair the ability to tailor communications; the company integrates PivotLink with Responsys, which handles the interactive marketing campaigns. “They may use youthful language with more hip, urban customers, and more reserved language with some of their more conservative customers,” Dalton says. “Freshpair is ... very good with understanding how to use purchase information to tell them what kind of person you are and how you might like to be communicated with. I find them to be very advanced.”
When it comes to merchandising the site with what it terms “More Fresh Ideas,” the company tested its manual product recommendations against an automated solution, and found that humans beat algorithms. “It’s not enough to say, ‘Someone who looked at this also looked at that.’ We focused on the organic reasons why someone would want that product,” Butlein says. “Our buying team was able to intuitively pick that up and really leverage that, to not just say what we recommend but why.”
The next level
Freshpair believes that its customers want a “real relationship and real connection,” Butlein says. “That’s what we’re all seeing play out in social media, with customers getting more and more engaged with brands and brands engaging back. It’s no longer isolated to a purchase.
“That desire for a relationship has been absent from the online experience, especially through all the touchpoints. Those are not just opportunities to make a sale or convert a shopper. Those are opportunities to help people and build a relationship with them.”
And that, Butlein believes, is only going to increase as large retailers continue to grow — allowing niche retailers the opportunity to trade on relationships.
“Amazon touches so many customers,” he says. “In order to be competitive, we need to own that niche level of service. It looks like the same struggle that’s played out offline with boutiques vs. bigger box stores. To prove out value over the long term, we have to provide that same boutique-level service and guidance. That’s really how we’re trying to position ourselves.”
But knowing the product category isn’t enough. “If we’re looking at data in aggregate or customers in aggregate, we’re going to miss the opportunities to build an emotional connection,” Butlein says. “Post-purchase, customers are used to getting mass, untargeted e-mails. It’s a shame because the technology exists to get a lot more personal.
“It’s not quite one-to-one yet — we’re still a ways off from end-to-end one-to-one communication, but I think a lot of people have under-invested in the technology side,” he says. “We’ve invested in technology so that we can be authentic to our customers, to understand who they are and serve them better.”