Me&my GROCER - Industry Trend or Event

Industry Standard, The, Nov 6, 2000 by Alexei Obeskovic

At Webvan, there's more to personalization than just making product recommendations.

Ask the average person about Web site personalization, and chances are Amazon.com will come up as an example. The online megastore has won the hearts and minds of many shoppers by recommending books or music well suited to their individual tastes. But in the shadow of Amazon's publicity, another Web retailer has been quietly pioneering personalization, sewing the results of its efforts into every aspect of its business.

In fact, online grocery store Webvan has established what it considers to be one-to-one relationships with its customers by taking an entirely different approach than most Web businesses. The Foster City, Calif., company's success (more than 75 percent of its orders are from repeat customers) is proof that personalization can be about more than just cross-selling and up-selling related products. For Webvan, it's about creating an efficient and individualized experience for the customer, online and off.

"Personalization isn't limited to our Web site," says Webvan's director of marketing, Laurie Zoob. "Because we have so many touchpoints, we can look at the entire experience."

Foremost among them is its fleet of delivery people. These couriers help Webvan establish a direct relationship with customers. "It's perceived by consumers as making Webvan for them. [They know] there's someone there," adds Zoob.

In addition to dropping off the groceries (all labeled with the customer's name, along with weight and quantity information) and fostering good will, the couriers also help Webvan learn about its customers. Couriers are equipped with a handheld device to collect information such as specific delivery instructions, product suggestions, general comments and an overall rating of the experience. Back at the office, this information is uploaded to the company's commerce database, where it fleshes Out the customer's profile and influences future contacts with the customer.

Of course, many marketers would drool over the chance to walk into a consumer's house and record whether a person has a teenage kid, a pet iguana or is always watching the football game. But Webvan refrains from any such snooping, limiting its data gathering to specific customer-feedback fields.

For their part, when shoppers visit Webvan's online store, they walk into what the company describes as a personal shopping aisle.

"There are thousands and thousands of items within our store, but not everything is relevant to everyone, says Zoob. "We want the customers to narrow it for themselves."

The result of this philosophy is MyMarkets. Each time a Webvan customer visits the site, she's one click away from viewing her last order, as well as one click from a page featuring every item she's ever ordered from Webvan. Also a click away is a list of her most frequently ordered items. If she orders a honey-glazed ham every time she visits, it will appear on the list, whereas if she ordered it only once, it won't.

These lists serve as excellent reminders for shoppers and create a much more efficient shopping experience, says Ajit Mayya, Webvan's director of software development. And customers seem to appreciate it. Mayya estimates that more than 40 percent of Webvan's repeat customers use the frequent item feature.

Interestingly, this kind of personalization didn't require any kind of predictive-modeling techniques or complex algorithms. It's strictly the result of analyzing every customer's purchases. Each night, says Mayya, the company mines its central data warehouse for purchase histories, generates a summary and exports the results to the separate commerce database that's tied to the Web site.

If customers want an even more personalized shopping experience, they can use Webvan's MyLists feature to create customized shopping and recipe lists. Webvan stores these personal grocery lists on its servers, giving shoppers a reason to use Webvan in the future.

The company also folds its knowledge of consumer preferences into features that extend beyond the Web site. Customers who opt in for the company's e-mail program, for instance, receive targeted messages informing them about relevant sales and recipes.

Webvan also runs an extensive samples program. "If there's a new baby wipe coming out, and one of our partners would like to introduce it with a free sample," notes Zoob, "we can pull a set of data based on customers who meet certain criteria and insert the wipe into those orders."

But Webvan still has a long way to go before it can offer its shoppers the best that personalization has to offer. In fact, the company doesn't even offer what many consider to be standard site-personalization features. Collaborative filtering technology, for instance, finds shoppers with similar behavior patterns and makes real-time product recommendations. Rules-based technology, on the other hand, uses predetermined scripts to suggest related products. (If Johnny buys spaghetti, then suggest spaghetti sauce.) None of these is available on Webvan's site.