InformationWeek
Defining The Business Value Of Technology
August 9, 1999
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Web sites--including those run by Levi Strauss and American Airlines--find getting to know their customers really pays off
By Candee Wilde
Early attempts at one-to-one marketing involved simply identifying visitors to a Web site and displaying a banner ad with the visitor's name in it. But the technology is becoming more sophisticated. Companies such as Andromedia, Blue Martini Software, and BroadVision have introduced systems that use filtering applications to analyze a customer's purchases on a site and recommend other products that might appeal to that person.
Levi Strauss & Co. is among those aiming to boost Web sales using one-to-one marketing tools. Bob Knowles, the San Francisco company's project director for U.S. electronic commerce, is overseeing the deployment of Blue Martini's merchandising software to support the Levi.com and Dockers.com Web shopping sites. The E-Merchandising System, which was recently upgraded, incorporates a commerce server with a suite of six modules: Merchandise Management, Customer Management, Micro Marketing, WebStore Operations, Tools, and a new Content Management Module. The suite runs on Windows NT and can pull data from Microsoft SQL Server, Sun Sparc/Solaris, and Oracle databases. Blue Martini plans to add other Unix platforms.
Merchandise Management has tools for changing merchandise available online to keep product assortments fresh. It also lets managers describe a product using an unlimited number of attributes, which can be related to its target market (young, casual, or formal), or the product itself (size, style, color, etc.). This helps merchandise managers create product assortments that will appeal to very specific market segments.
Blue Martini's E-Merchandising system differs from most competing solutions because merchandise managers, not software, determine how to match products with customers. The Micro Marketing module delivers data mining results to the merchandising managers as personalization rules. The managers decide how to use those rules to best match products with customers.
Keep The Human Touch
Levi Strauss, Blue Martini's first customer, expects to finish installing the E-Merchandising package by the middle of next year. The entire solution costs about $500,000. For now, Levi Strauss is using Blue Martini's workflow system behind the scenes to speed the process of entering products into the data warehouses on its Web sites and to disseminate that information throughout the supply chain. "For the last seven months, we've been doing this manually, but it's been very cumbersome for us to keep the information synchronized," Knowles says. "Blue Martini will automate all of that for us."
Blue Martini's E-Merchandising system will let Levi Strauss make real-time merchandising choices based on its knowledge of its customers. The software will also support proactive marketing, Knowles says. Based on predictions generated with E-Merchandising, Levi Strauss could target customers likely to purchase a new style of khaki pants, for example, then send them an E-mail message containing the digital image of the pants with a click-and-buy icon beside it. "We have a lot of information about one-to-one marketing techniques," he says. "Now we're learning how to leverage that information."
Photo of Knowles by Alan Blaustein
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rom the beginning, savvy marketers realized that the Web presented a unique opportunity to increase sales through cross-selling to individual customers. If companies could gather marketing data and analyze it in real time, they could make instant merchandising decisions.
The Customer Management module categorizes customer attributes and maintains transaction histories. Data about customers is combined with product information in the Micro Marketing module, which uses data mining and data warehousing tools to identify relationships among products and between customers and products. WebStore Operations can function as a commerce server and includes tax, security, shopping list, and catalog operations. The Content Management module lets companies develop, manage, and deliver personalized images, text, HTML templates, and video content to shoppers.
Human involvement is what makes Blue Martini's product different from others, says William Evans, VP of marketing for the 1-year-old company. "Merchandising is done by people with expertise in merchandising--except on the Web," he says, where IT experts have fallen into the job because of the complexity of using the software tools to support it. E-Merchandising was designed specifically for retailers in the same way payroll and human-resources management software is designed for business users, he says.
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