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Fashioning a Customer-First Digital Strategy

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Fashioning a Customer-First Digital Strategy

About ModCloth
ModCloth started out in 2002 as a fun way for its co-founder and chief creative officer Susan Gregg Koger to share her love of vintage fashion and dcor with fellow enthusiasts, opening up her closet full of thrift-store finds to online shoppers. Her boyfriend at the timenow, her husband and the companys co-founder and chief executive officerEric Koger, helped design the website that launched the business, turning a passion into a thriving company. More than a decade later, ModCloth has cultivated an ardent following of primarily 18- to 30-year-old females who love the websites retro and vintage-inspired apparel, shoes, accessories, and home dcor created by more than 1,000 independent designers. The company also stays true to its roots with a carefully edited selection of vintage clothing and housewares that shoppers can access by signing up to become a member of the ModCloth community.

ModCloth
Founded. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2002 Headquarters.. . . . . . . . . . . . . . . . . . . . . . . . . San Francisco, Calif. 2012 Shipments to Customers . . . . . . . . . . . . . . . . . . . . 1.2 million 2012 Internet Retailer 500 Rank. . . . . . . . . . . . . . . . . . . . . . . . #366 2012 YOY Corporate Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50%

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Fashioning a Customer-First Digital Strategy

Growing a Community of Customers

If you want proof that the way people shop is evolving, look no further than ModCloth. One of Americas fastest-growing retailers, this onlineonly company is shaking up the traditional retail model. We have a unique way of looking at our place in the fashion industry, says Megan Walsh, director of retention marketing at ModCloth. Were hoping to democratize fashion, meaning that our customers have a chance to impact what we carry and how we present it, to help shape what ModCloth is. More than being customer-centric, ModCloth is community-centric. Our goal is to create a more collaborative shopping experience by giving the customer a way to voice her opinion, interact with other shoppers, provide valuable feedback to designers, and even help curate the merchandise assortment, says Eric Koger. The retailer amplifies feedback from its community in a number of ways. From submitting product reviewswhich often include pictures of customers wearing or displaying their purchasesto entering clothing design contests, and voting for sample styles that are produced and sold by ModCloth, visitors to the website are encouraged to get involved and become part of the ModCloth community.

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Fashioning a Customer-First Digital Strategy

By sharing their ideas and preferences, customers help ModCloth continue to offer the right merchandise, as well as introduce the innovative website features that keep them coming back. On average, one-third of ModCloths website traffic visits more than once a day, and some super-loyal shoppers return as many as eight times daily. That high level of engagement is invaluable to ModCloth. Traditionally, online retailers prioritize conversionbut for us, its not that simple because we have a really dedicated fan base, says Walsh. To cultivate both engagement and conversion, personalization is a key ingredient in ModCloths recipe for success. The retailer uses Monetate to leverage customer insights to create the highly relevant online experiences its customers expect. It runs more than 300 marketing optimization campaigns simultaneously, offering new features and products to each customer with every trip she makes to the website.

We believe we owe it to our customer as a result of her continued engagement with different features of our website, says Walsh. We want to reflect an easy way for her to find the products that she interacts with, as well as to save and get status updates on those products. Its the core reason why she would come back again and again.

Most of our content delivery is segmentspecific. Allowing the customer to discover when new things have been added from her favorite sub-brands is one of the ways were effectively able to both target and deliver content. Its a powerful combination for us.
- Megan Walsh, director of retention marketing, ModCloth

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Fashioning a Customer-First Digital Strategy

Merchandising as the Ultimate Matchmaker

When a woman meets the right dress, pair of shoes, accessory, or decorative housewares item, its often love at first sight. ModCloth understands this relationship between its customers and fashion, and works to play matchmaker by displaying the products that will best suit their interests. This is no easy feat, since the company adds several dozen new items to its website every day. Unlike a more traditional retailer that rotates in 1,000 SKUs every three months, we have 50 or so hitting the site every day. And while some customers tell us that they like getting lost in our assortment because it is so large and theres a treasure hunt aspect to it, we also leverage Monetate to help visitors curate that vast mix, says Walsh. ModCloth pairs sophisticated online merchandising with big data insights to connect visitors with the right products.

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Fashioning a Customer-First Digital Strategy

Case Study 1: Im With the Brand

One of the reasons customers are loyal to ModCloth: the niche brands it carries. As mentioned earlier, the retailer seeks out independent designers that share its focus on retro and vintage design, which results in a mix of hard-to-find and more established labels that offers something for everyone. Leveraging customers past viewing and purchasing history, the retailer is able to spot affinities for certain designers and then use product badging to highlight new items from these sub-brands. From product listing pages to search results pages, these new-item badges help capture the target segments attention to boost engagement and sales. For example, the New From [Your Favorite Designer] badge campaigns have driven a 15.75% lift in conversion, a 5.79% lift in add-to-cart rate, and an 11.79% increase in average order value. Most of our content delivery is segment-specific, says Walsh. Allowing the customer to discover when new things have been added from her favorite sub-brands is one of the ways were effectively able to both target and deliver content. Its a powerful combination for us.
Badges that call attention to new items from a customers favorite designers quickly connect her with products that might be of interest.

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Fashioning a Customer-First Digital Strategy

Case Study 2: Theres a Product Recommendation for Everyone

After seeing customers respond positively to targeted content like brand-specific badges, ModCloth decided to focus on its product recommendations. Predicting that these upsells and cross-sells would perform better if they reflected customers historical and in-session behaviors, the retailer has been using Monetates powerful product recommendations to personalize its suggestions. To welcome new visitors to its website, ModCloth recommends its bestselling products that have already proven to be popular. Take the Tops category, for instance. Conversion and new customer acquisition has jumped 16%, and average order value has increased by 30% for the 50% of ModCloths website traffic seeing the best-selling tops recommended on product detail pages in this category.

Visitors who are new to ModCloth respond better to product recommendations that feature the bestsellers within each category.

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Fashioning a Customer-First Digital Strategy

To better serve returning visitors, ModCloth is testing a viewed-alsoviewed filter on product detail pages for its shoes, dresses, intimates, and jewelry categories to suggest products that people often look at together. For example, the product recommendations carousel on product details pages for intimate apparel has improved conversion by 19.53% and reduced cart abandonment by 2.11%. Prior to using Monetate to deploy product recommendations, ModCloth was generating incremental revenue from its efforts. But now that the retailer enjoys a targeted approach to this merchandising tactic, it is seeing even better performance and a stronger ROI.

Targeting its product recommendations for returning visitors, ModCloth uses a viewed-also-viewed filter to show items that shoppers often look at together.

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Fashioning a Customer-First Digital Strategy

Innovative by Design
For a company that celebrates creativity and has an actively engaged customer base, its important to try new things and ensure the website stays fresh. We have no shortage of great ideas to help the customer discover new ways to shop, says Walsh. Monetate allows us to capitalize on trends and keep our pipeline packed. If we see something trending in our search terms, well put quick links up within a matter of days to help her get to the products shes interested in. With hundreds of optimization and personalization campaigns running at any time, its clear that ModCloth isnt afraid to experiment to find the features and messaging that resonate with customers. Walsh points to the value of being able to not only act quickly on ideas, but also to make sure each campaign supports the companys goals. We have a high number of campaigns active, she says, but the way that weve selected that number is essentially by testing into different ideas and making sure the incremental lift and revenue is there for each and every one. In addition to product badging and product recommendations, the retailer has found success targeting offers and products based on visitors geographic location. ModCloth welcomes international traffic with shipping promotions to encourage conversion, and runs homepage hero takeovers that highlight cold-weather apparel for visitors located in chilly climates. Two other big personalization wins have come from looking at customers on-site behavior to develop the features that will help them quickly navigate to the products that match their needs.

We direct our overall test plan, but [Monetates] Client Success team helps us slice and dice the data to make sure we are interpreting it correctly and taking the next step in our optimization strategy.
- Megan Walsh, director of retention marketing, ModCloth

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Fashioning a Customer-First Digital Strategy

Case Study 3: One Size Does Not Fit Allin Apparel or Websites
Since sizing often differs greatly from one brand to the next, one of the top challenges women face when shopping for apparelespecially online is finding clothing they like that also fits. Customers have shared their measurements in 58% of the product reviews on ModCloth.com, which shows how much the retailers customer base likes to help their fellow shoppers in the quest to find great apparel in the right size. ModCloth took notice, and developed additional website content and functionality to address this shopping hurdle. Walsh explains, When you go to a Banana Republic, a size 6 is a size 6. At ModCloth, thats not necessarily true because of the wide variety of independent and international designers that we work with. So we leverage our customers size history to help her find the product thats going to fit her across multiple sizing schemes. Using Monetate, the retailer notes the last three apparel and shoe sizes a visitor added to her cart, and then personalizes her future website trips with targeted content. For example, visitors who have previously purchased products in plus sizes are shown homepage images that provide quick links to the growing assortment of apparel that comes in sizes 16 and up.
One of the ways ModCloth leverages its customers size history to personalize future website visits is by serving a homepage image that promotes and links to its collection of plus-size apparel.

This type of personalization is driving a 14.94% lift in average order value.

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We are actively expanding the availability of our products into a full size run, which is something that our customers have been asking for. Figuring out the best way to share this exciting development with the ModCloth community as a whole, while creating specially curated landing pages for plus-size customers, is important to us, says Walsh. Beyond the benefits of stronger front-end key performance indicators, ModCloths optimization campaigns around product size are also contributing to improved customer service. The retailer has seen increased customer satisfaction and lower product return rates, which Walsh notes are crucial in an ecommerce-only environment.

An effort targeted to customers who gravitated toward pin-up style, for instance, increased conversion by 6.05%, average order value by 7.46%, and add-to-cart rate by 5.66%.

Case Study 4: Navigating Toward Repeat Sales

Another way ModCloth leverages customer data to improve the shopping experience is by personalizing the navigation filters and homepage to reflect the customers aesthetic style. Targeting a customer segment that has purchased from a particular trend, such as pin-up style, the retailer highlights a single product image that represents the trend in the top navigation drop-down menu with an appeal to shop by style. A sub-hero image on the homepage also lends support to the effort with another mention of the style for those customers who might not turn straight to navigation menus to begin shopping.
ModCloth taps into the power of customers affinity for different fashion trendsin this case, pin-up styleto personalize both the navigation (top) and homepage (below).

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Fashioning a Customer-First Digital Strategy

The Social Connection

With a target demographic thats young and female, its no surprise that social media factors largely into ModCloths digital marketing strategy. Walsh says the retailer was quick to establish strong communities on Facebook, Twitter, and Instagram. She also points to the companys growing followers on Tumblr and Pinterest. Often, as in the case of Facebook, Walsh explains, she might be clicking on a friends wall post. You know how tiny those are. She doesnt have a lot of brand context at that point. So in addition to detecting which social media site referred a visitor, we also try to determine when she is coming to us from one of those smaller format networks. We then help her get her bearings within ModCloth, suggesting some first activities that would be great for her. A big part of helping social media-referred visitors get familiar with the website, as well as follow through on the reason why they clicked, is carrying over the same messaging from the ad or link that inspired them.
Image courtesy of ModCloth Style GalleryContributor,Daria.

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Case Study 5: Making a Great Impression

ModCloth highlights individual products in its Facebook status updates to promote sales and new collections, back-in-stock product alerts, and when designs selected by visitors in its Be the Buyer program are launched, among other updates. When people click through from the status to ModCloths website, the retailer uses Monetate to connect these visitors to the same product that caught their eye, while also displaying additional items that might be of interest. For example, a Facebook status update promoting party dresses links to ModCloths party dresses sub-category page. The banner that appears in the right gutter features the same party dress from the Facebook status, and remains in the right gutter as visitors explore the website. At any time, visitors can click on the banner to go to the product detail page for this dress.

When shoppers arrive on-site from a Facebook status update, ModCloth helps them navigate the broader product assortment, while keeping the item that generated the click-through in the right gutter throughout the visit.

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ModCloth employs a similar tactic to make the most of Facebook ad traffic, welcoming visitors with a top banner that echoes the same message in the ad they clicked on and that links to the featured items. Both of these approaches worked so well that the retailer rolled them out to 100% of the target audience.

For a long time, retailers have relied primarily on gut instincts to guide their businesses. But at ModCloth, were also relying on experimentation and data to help us better understand our customer, which helps us inspire her with an extremely relevant and fun shopping experience. Monetate helps us build the experience around her.
- Eric Koger, co-founder & CEO, ModCloth

Traffic referred by Facebook ads is greeted with a top banner that reinforces the creative in the ad and links to the items that were promoted.

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A Teamwork Approach to Innovation Thats Always in Style

As ModCloths business has grown, so has its use of website optimization. In the early days of working with Monetate, the retailer primarily focused on objectives around marketing and merchandising. Over time, it has found other ways to leverage the solution across the organization. Last year, we started using Monetate to support the product team as they developed new features for the website, testing ideas to a percentage of traffic to measure the impact before rolling them out to all visitors, says Walsh. And, of course, the retailers user experience team helps it take full advantage of Monetates capabilities. For example, says Walsh, the user experience team was heavily involved in designing the product carousels ModCloth uses to present product recommendations, figuring out the best way to integrate these features into the layout of the shopping cart and product detail pages. But theres one more team that is integral to ModCloths success in creating the most relevant, personalized experiences for its customers: Monetates Client Success team. From introducing ModCloth to new Monetate features as theyre added, helping the marketing team effectively incorporate them into its strategy, and analyzing campaign results and recommending personalization strategies, the Client Success team helps the retailer continually expand its website optimization efforts. We direct our overall test plan, but the Client Success team helps us slice and dice the data to make sure we are interpreting it correctly and taking the next step in our optimization strategy, says Walsh. Its really helpful to have their expertise in that area.

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Personalizing the Website From Head to Toe

A Monetate customer since 2009, ModCloth has embraced the ability to use cloud-based, client-side technology to more easily learn what its customers want and then deliver the most relevant experiences on every website visit. Knowing that many of its visitors check in throughout the day, ModCloth has focused on optimizing the homepage. In one years time, for example, the retailer went from targeting a single hero image and three to four subbanners on the homepage to close to a dozen different personalization opportunities. Now, ModCloth is ready to use its personalization know-how on a grander scale. Weve taken a great leap forward, says Walsh, and the homepage is probably the easiest place to see that evolution. But now were aggressively working on trying to make that personalization more obvious and more delightful to our customer throughout the site at large. She points to product grid pages as an example. We are trying to bring a more customized experience to grid pages because, for a lot of customers, that is the first page they see. Its a great opportunity for us to push our personalization strategy a little bit farther, since those are some of the hardest-working pages on the site. Thats the next frontier for us, says Walsh. This new frontier also includes the retailers mobile and tablet websites. Mobile users represent a third of its traffic during peak hours. ModCloth uses Monetate to optimize its mobile sites, and is looking to expand its efforts there. Walsh explains that the optimization strategy for mobile traffic differs from that planned for the desktop user, taking into account the unique needs of these audiences.

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Fashioning a Customer-First Digital Strategy

Mobile platforms will need to be even more dynamic than what we have happening on desktop. Because our customer may be visiting us at so many different points of context within her life, we want to make sure that each platform is well positioned to have something new and exciting for her to stumble upon whenever she opens it, wherever she is, she says. Meeting customers needs across channels, devices, and operating systems will be one of the top challenges marketers face for some time to come. Thats why Monetate is important to ModCloths business.

For a long time, retailers have relied primarily on gut instincts to guide their businesses, says Eric Koger. But at ModCloth, were also relying on experimentation and data to help us better understand our customer, which helps us inspire her with an extremely relevant and fun shopping experience. Monetate helps us build the experience around her.

We have no shortage of great ideas to help the customer discover new ways to shop. Monetate allows us to capitalize on trends and keep our pipeline packed.
- Megan Walsh, director of retention marketing, ModCloth

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Fashioning a Customer-First Digital Strategy

About Monetate
Monetate empowers marketers to leverage big data to create more personalized and engaging online customer experiences. By providing more relevant web interactions, leading brands are able to anticipate and react to consumer preferences to generate stronger customer relationships and significantly increase profits. Monetate drives billions of dollars of revenue every year for some of the best-known brands in the world, including Best Buy, Frontier Airlines, Aeropostale, The Sports Authority, and PETCO. The companys solutions and conversion expertise enable marketers to deliver a more relevant customer experience with unprecedented agility. Leading marketers rely on Monetates cloud-based browser solutions to achieve a new level of speed and control, allowing them to run 16 times more optimization campaigns compared to industry averages. Monetate solutions include advanced products for testing, merchandising, targeting and cross-channel consistency, providing an opportunity to bypass IT restraints and react in real time to customer demands. Monetate also helps marketers implement best practices and drive online revenue through its expert strategic services and content publishing teams.

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