1. ATG is well known for its personalization capabilities. How would you grade US online retailers, overall, on the quality and efficacy of their personalization strategies? What are the key obstacles these companies must overcome to implement more sophisticated personalization approaches?

I think we need to start with a quick definition of personalization, as it is a term that has been used in many different ways. At the highest level I define personalization as presenting the most relevant information to each customer during each interaction through each channel. In my view it doesn’t mean an individual plan for each individual visitor but rather a refinement of the content presented – images, messages, assortments, promotions, etc. – where appropriate, based on your knowledge of the customer and the reason she’s in your store. I believe the “1 to 1” view of personalization in itself overwhelmed many retailers and stalled adoption.

Based on this definition, I would give online retailers as a group a “C” for their personalization strategies to date. There are a few notable exceptions – and of course ATG clients would rate higher – but in general, industry personalization strategies haven’t moved much beyond a segmented email and a welcome back on the corresponding landing page. However, we’re seeing lots of momentum in the market and many of the obstacles holding retailers back have been removed. Retailers have traditionally been held back by either a lack of actionable knowledge of their customer base or a limitation in available resources or tools to act on the knowledge once gathered.

With the maturing of the e-commerce market, shoppers have mainstreamed and customer segments and shopping patterns have become more evident and defined. And the technology has advanced as well. Business data, merchandising applications, and automation have evolved to the point that merchants can identify trends as they’re happening and respond effectively to deliver more relevant interactions. As e-commerce and online shoppers continue to mature, growth will increasingly depend upon customer loyalty and lifetime value. Personalization is the ultimate loyalty platform and I look forward to the continuing evolution.

2. As personalization continues to mature, what steps has ATG taken to give the merchandiser more (and easier) control to deliver tailored shopping experiences? How do you see user-generated content playing a role there?

We have done a variety of things to continue to enhance the merchants control and capabilities around personalization. First and foremost we have insured that merchants have a consistent and complete view of the customer – all the products they view and purchase, and all the interactions they have with the site. Secondly, we have developed business applications that help merchandisers use this knowledge to easily implement personalized promotions, merchandising strategies, marketing campaigns, and search rules without having to go to IT. Most recently we have added algorithms and automation to our offering that help merchandisers even better negotiate the delicate balance of rules-based vs. automated personalization.

The growth of UGC and consumer participation in general only increases the need for personalization. UGC, while incredibly valuable, can also quickly become overwhelming. As the sheer quantity of content grows, it becomes more important to help each consumer filter through it and find the perspectives, people, and advice most relevant to him in particular. In many industry surveys, consumers have said they value opinions from others “like them.” Personalization provides the ability for sites to connect the right customers with each other.

3. Acquiring eStara in 2006 was a great move for ATG, both for the business and as a value add for your clients. How does this technology extend a brand’s ability to converse with its customers, and what are some of the more innovative things you’ve seen clients do with this solution?

The eStara products have been a great addition to our offering. Today, e-commerce is multi-channel. Shoppers see stores and brands; they don’t think in terms of channels. They expect seamless transitions and consistency across every interaction with a brand, no matter what channel they use. Some customers still prefer to complete a purchase directly with a real person, regardless of how good your site may be. The eStara products enable merchants to proactively reach out to customers on a Web site who may be highly valuable, may be researching a high consideration product, may be stalled online, or may simply have a history of researching online but buying by phone or in a store. These customers can be connected directly from the site to a customer service representative (CSR) who is immediately aware of who they are, their history with the company, and their current activity on the site. The CSR can immediately help the customer accomplish her goal. This ability has an immediate impact on conversions and customer satisfaction and goes a long way to build loyalty.

The eStara team has been incredibly nimble and has worked closely with customers to evolve the product set to meet a very interesting mix of needs. I could spend hours talking about customer examples but I’ll narrow it done to just a couple. Jenny Craig uses eStara to connect browsers on their corporately run Web site directly to their local franchisee. Franchisees love this as it provides a direct business channel for their local outlet. Customers love this as it provides an easy way to get engaged with a local person who can immediately get them started on their weight loss goals. And Jenny Craig loves it as it enforces their brand difference which as they state is “a personalized approach.”

There’s also a viral marketing use of the eStara services that’s taking hold and getting huge media attention, especially in Europe right now. Just one example is of Sporting Portugal, a major Portuguese soccer club, which created an interactive viral marketing campaign using eStara Click to Call. The campaign aimed to increase membership and attendance at games by phoning soccer fans as they’re watching a video online. As a result of the campaign, the all time record for season ticket sales was broken the first day of the season, and the creativeness of the drive resulted in massive interest from the local and national media.

4. Our readers like actionable ideas that are feasible to execute. What are your top 3 ideas for merchants integrating ATG and Bazaarvoice to drive value for consumers and growth?

There are an endless number of actions that a merchant can take once they’ve integrated Bazaarvoice with ATG. The first three things I’d consider are:

A. Combine ratings & reviews with personalization to show top-rated product recommendations by customer segment on your home, search and category pages. Drive more sales with relevant and highly rated products for all visitors.

B. Include top-rated products in campaigns triggered by customer actions such as order confirmation and shipping emails, abandoned cart follow-ups and messages to shoppers using gift lists.

C. Use Click to Call or Click to Chat to reach out to highly engaged customers by targeting personalized invitations to active reviewers. Keep these customers engaged, informed and they’ll happily sing your praises!

5. Tell us about how a customer who really gets it would use ATG's capabilities far more extensively and intelligently than the average.

The customers who truly “get it” realize that one size does not fit all. Different shoppers reach their stores with different goals, needs and tastes. The better merchants are able to understand what the varying desires are and the faster and more completely they are able to respond to them, the more successful they will be.

It’s a simple thought – shoppers return to stores where they have had success. The complexity lies in recognizing that success for one shopper may in fact be failure for another. Some shoppers want to browse, connect with merchants and fellow shoppers and extend and enjoy the process. Others want to get in the store and get out. Some shoppers know exactly what they want and simply want to purchase it in the most convenient manner while others want detailed information, recommendations and advice from others and want to consider their purchase across visits and channels. Further complicating the story, success for a single shopper will vary across shopping trips. History provides a good view of the customer but not necessarily an understanding of how they want to shop today.

I believe the merchants who “get it” are those who think about their Web store as a living entity that is constantly learning, reacting and enhancing customer visits – across channels. They are merchants who plan at a segment level but react to each visitor when they’re in the store. Merchants who balance direct control and automation to deliver effectively and efficiently. Merchants who have moved beyond guided navigation and strive to deliver guided serendipity – where shoppers not only accomplish their initial task but are also delighted by the products that they trip across along their path through your store.

6. The eCommerce space is still quite fragmented, and much of it is beginning to tie into the enterprise marketing space. What are your projections for consolidation in this industry, in light of your recent acquisitions?

I don’t believe any of these “spaces” are distinct – obviously you can’t do commerce without marketing, just as you can’t do commerce without servicing your commerce customers. The smart merchant looks at the end-to-end customer experience holistically, plans an architecture that enables a single view of the customer, then selects a platform that implements the architecture and add-on products and services that fill out all the functionality the consumer expects – without regard to what “buckets” or “spaces” someone thinks they fit into.

1. Many in our industry can remember NetPerceptions and their early contributions to the personalization and recommendations space. But that was over 10 years ago!  In a nutshell, what big changes have occurred since then to alter the landscape of this space, now called “Discovery”?

The single biggest contributor to making the Discovery category happen was the shift in focus from the algorithm to the experience. Discovery is all about driving relevant experience in context to what people are reading, viewing and buying. It doesn’t matter what algorithm you use if the consumer doesn’t like what they see.  This requires an almost algorithm agnostic approach to placing the right content and products in front of customers. Pick the best approach to drive the best result.

The second big shift happened in the ability to cost effectively manage massive volumes of information. The volume of data required to do discovery is staggering. You have to literally process billions of pieces of data, predict exactly the right content that people want to see based on what millions of others have done – and deliver it in milliseconds on a web page, through emails or into other channels like advertising.

The third big difference is ease of deployment. Ten years ago it was all enterprise software and compatibility questions about your content management system. Web 2.0 principles eliminate this huge drag on the sales and deployment time.

We have definitely learned a lot of great insights on how the space evolved, what worked, what didn’t from the founders of companies like Net Perceptions and Firefly. We took that all into account when we were building out our discovery network.

2. Aggregate Knowledge’s offering is unique in that it creates content-centric relationships between merchants (who want your solution to drive greater conversion on their sites) and publishers (who want to monetize their content and traffic through high-performing advertising).  Why is this relationship so essential to your business model?

If you really want to pique somebody’s interest to buy or view something, you need to show them content relevant to their interests. People want to read articles, view videos, and buy products based on what they are interested in at that moment in time, and that is relevant to what is happening in the world right now. And “right now” is very important for relevance. We provide Discovery on some of the world’s largest newspaper websites. You can’t wait until the weekend to figure out the matching stories. You only have a few seconds and that’s what Aggregate Knowledge delivers.

In so doing, we connect the merchants, retailers and publishers in our network. We understand the patterns and connections between the products, articles, blogs, videos, photos, etc. between retailers and publishers in our network sites. By understanding these connections, we can place highly relevant and targeted products and content to consumers visiting sites in our network. When people see something that is relevant to them, they buy more, read more and come back for more. This is the foundation to our business model.

3. Successful online brands are increasingly savvy about prioritizing their technology investments based on conversion impact, ROI, payback, etc.  What can companies expect from their investment in a solution like Aggregate Knowledge’s?

One of the best things about web services is that there is very little upfront time required to get started and no upfront license fees. This immediately focuses the conversation on providing the most engaging experience for our customer’s consumers. Once you drive a more engaging and relevant discovery experience on your site and through your marketing and sales channels, you can see substantial lift in sales, click through rates, click to purchase conversion, time on site, etc. We know it starts with creating a great experience. There is nothing more powerful than reading an article on a site about wine collecting and then seeing all of the related products that have been purchased by people who read that same article. That experience alone can drive sales, longer time on site, and return visits to both sites. This leads to a two fold win: driving the business metrics of our customers as well as delighting their consumers with a satisfying experience.

4. Can you share a few examples of brands/sites that are really delivering on the promise of personalized content, products, and offers along with great user experience of those things?

Delightful Deliveries is a great example of how discovery works. Delightful Deliveries is the leading site for gourmet gifts and gift baskets. People go to their site for gifts of all occasions including birthdays, baby gifts, back to school, holidays, and seasonal gifts. They are using our discovery offerings to literally emulate how people naturally shop for gifts. With every click on one of their gifts, their customers see related gift options based on what others have viewed or purchased. This is important because many times you don’t know what you are looking for when buying that perfect gift. Now their customers are leading each other to their great gift finds. This is also a great example of the power of user-driven merchandizing. What really determines if the ‘beer of the month’ club is relevant to Father’s day or summer time? In this case, Delightful Deliveries customers’ help determine what the most relevant gifts are for different occasions, seasons, and holidays.

In addition to our customers, there are certainly other companies doing this well. For example Facebook. As you may know, prior to starting Aggregate Knowledge I was a founder of Tribe.net, one of the first social networks. Many lessons learned from social networking are being applied at Aggregate Knowledge. Facebook is a company that is winning by driving a highly relevant experience for their members. They give you all the things you need to run your online life on Facebook. Every tool and application on Facebook helps make it easier to connect and communicate with friends and your network. We are excited to see how this translates to their new advertising service, as we are doing very similar things with content.

5. Follow-on question: For many years, Amazon.com has been the industry model for both community functionality (ratings & reviews) and personalization.  Do they still hold that distinction?

They certainly helped validate the business value of user-driven reviews and cross-selling through recommendations. I would say that this still is very important, but the new opportunity lies in driving this beyond your website and through all sales and marketing channels.

Doing this as web service for all retailers is also a big distinction. It’s certainly one of the reasons Aggregate Knowledge and Bazaarvoice partnered. By providing reviews, recommendations, discovery, and user generated content our joint customers get the best of all worlds.

6. Your solution has very clear multi-channel value and utility.  Can you share any thoughts on your multi-channel strategy and future offerings targeted to the offline world?  What requirements should multi-channel retailers have of an online discovery solution that could be leveraged cross-channel?

It’s only discovery if you are driving relevant product and content to consumers through all marketing, sales and communication channels. Basically touch the consumer in all the places they touch your business. We consider this the ticket to the dance to work with retailers, as they are all working to drive the same experiences on their site, through their emails, in their advertising and affiliate promotions. In fact, many of our conversations start with companies wanting to automatically deliver product and content placements into their emails. We are initially focused on priority channels such as our customer’s web sites, emails and affiliate promotions and ads. We are also working on some big plans for RSS, mobile, and point of sale. We call this strategy “Discovery Everywhere” and you will be hearing a great deal more about it in 2008.

7. Aggregate Knowledge and Bazaarvoice are partners and share several successful clients.  How do you think customer generated content, such as ratings & reviews, and other social media complements your offering?

Customer generated rating and reviews are all part of the discovery experience and fit hand and glove with our services. Ratings and reviews are instrumental to helping customers reach a decision about what products they want to buy. Our goal is to deliver the most relevant products in front of customers based on what others are doing. Bazaarvoice tells them what they are saying!

IBM is one of our valued e-commerce platform partners and Errol Denger, Senior Strategist for IBM WebSphere Commerce, thinks pretty hard and pretty often about where our industry is heading.  To kick off the partner interview series, I thought it would be good to pick Errol's brain on a few topics that our customers frequently ask us for input on.  Enjoy!

1. E-commerce is evolving quickly.  Every year, it seems that our industry is buzzing about a new hot topic.  What do you foresee being the hot topics in e-commerce over the next 2-3 years?

Several key trends are converging to shape e-Commerce’s next few years.  The new buzz will be all about customer-centricity and experiential retailing.  These concepts will be embraced to redefine the brand experience and deliver new value to customers.   As retailers apply these strategies to their e-Commerce sites, you will see a continuing transformation from product and catalog-driven sites to destinations that focus on delivering a rich customer experience.  

As multi channel retailing continues to gain momentum, you will see a lot more buzz around mobile, kiosk, and other touchpoints.  Look at the buzz around the iPhone alone and its ability to deliver a “real” web experience. Other multi channel technologies such as kiosks will be implemented in the store to enhance the purchasing process with richer information such as ratings and reviews.  It will be a huge challenge for retailers to consistently and contextually extend this customer-centric experience across all channels and touchpoints, but successful retailers will capture greater market share and plenty of headlines.     

2. Can you give our readers an example of what you describe above, a retailer or site that is succeeding at evolving from catalog-driven to a true “rich customer experience”?

Well as I pointed out above, e-Commerce sites are no longer flat HTML catalogs but are becoming feature rich destinations that focus on the customer’s needs.  The hottest digital marketing opportunities will be those that extend the online experience.  A great example of this is IKEA’s room planner which enables customers to design 3D kitchens and automatically generates a shopping list.  Other areas that extend the shopping experience will include 3D Internet, social commerce, and rich digital content such as user created movies.

3. There are e-commerce platforms and there are focused solutions (analytics, email marketing, search, reviews, etc.).  What is the role and responsibility of a platform provider in helping customers develop a best-of-breed strategy?

Our goal is to enable online sellers to transform the way they deliver business value by creating a rich brand experience.  Because this differs significantly across industries and segments, we have formed an ISV ecosystem enabling us to deliver end to end solutions.  The goal is to deliver a pre-integrated, proven solution that our customers can trust their e-businesses to.

4. Bazaarvoice is an IBM WebSphere Commerce partner.  How does our solution and expertise complement IBM's e-commerce strategy and vision?

Bazaarvoice complements IBM’s e-Commerce strategy and vision by providing rich social commerce capabilities.  This is a critical in today’s Web 2.0 world since retailers are redefining the way they interact with customers.  They are actively engaging customers and establishing architectures of participation with sites specifically designed for user contributions.   Bazaarvoice helps us meet this requirement and more.  As user interactions continue to evolve, we expect Bazaarvoice to deliver new offerings that further extend the relationships that retailers have with their customers.

5. What mistakes do large multi-channel retailers commonly make when choosing an e-commerce platform and solution partners?

There are a few common mistakes which are mostly caused by improper planning and requirements definition processes.  One of the biggest mistakes occurs when multi-channel retailers do not incorporate the business’s broader strategies and growth initiatives into their purchase decision.  When this happens, the retailer may have a strong e-Commerce site but they will encounter problems when forced to integrate it with the rest of the business or use it as a catalyst to drive growth.  Thus, we recommend that companies evaluate their e-Commerce site in context of their multi-channel retailing strategies and also think about how they plan on growing their business to ensure that their e-Commerce platform can grow with them.  It is also absolutely critical that these decisions are not made in a silo, and they have full organizational support.

6. Many marketers are still struggling to understand Web 2.0, but I'm already hearing talk of "Web 3.0".  What does this mean to you?

Web 3.0 will be about selling to the Digital Generation and the next decade’s consumers. In the next decade, everyone is interconnected, anything goes, everything is available, and nothing is private.  Shoppers will be savvy and skilled placing a high level of importance on individualism, self-fulfillment and personal involvement in the creation process.  Retailers will use Web 3.0 as the vehicle to sell to this generation of shoppers and to support the new lifestyle formats that will dominate retail.  Web 3.0 will encompass a set of concepts and technologies that enable retailers to cater to shoppers that are ubiquitously connected, continuously moving across touchpoints and interaction metaphors (physical, 2D, and 3D), and interacting in new ways through increasingly integrated social networks.