STORES Magazine - May 2008 - (Page 46)

WORTH WATCHING / ARTIFICIAL INTELLIGENCE Getting Personal Solution customizes catalogs to the taste, budget of individual shoppers BY FRED MINNICK ust as the Internet has given retailers new marketing tools, the technology has stifled two long-time retail stalwarts — print advertising and catalog. Today, more retailers are directing dollars normally earmarked for print toward Google AdWords, e-mail marketing or some type of search-engine-optimization tool. J Print hasn’t died, but the catalog providers have had to become more efficient and targeted to compete with the web. A case in point is the recent merger between marketing and supply chain management company Stochastic MarDear Mr. Smith keting and Catalogixx, “Using the Catalogixx which uses artificial intelsoftware, you can adjust ligence to target conthe products, set the pricsumers with catalogs. Toing on the products and gether, their clients include write a letter to the cusPapa John’s, Goodyear, tomer” just like the perNestle and flooring comsonal shopper. pany Pro Source. That capability might be Stochastic brings data analytics to the table, Catalogixx owns the nice for an e-mail marketbuilding the data model that identifies which products patent for software that ing program, but the Intershould be marketed to which customer. translates the “personal net gives retailers the abilishopper” concept to direct-marketing ty to touch a lot of consumers with modpiece be targeted to the recipient,” says materials. It uses artificial intelligence to est effort in a relatively cost-effective Mike Layton, president of St. Louisconnect with a company’s customer way: why pour more resources into catbased Stochastic Marketing. “As you database, identifying purchase patterns mail and get responses, the model gets alogs? Layton argues that retailers and personal preferences; this informasmarter and smarter.” should combine web and catalog efforts. tion is then matched to the company’s And the software is not one-dimen“The most successful, most aggressive product line or a specific message. The sional. “Once you have the [consumer] direct marketers see maybe 50 percent result is direct mail with products, headinformation it can be set up in a many of their orders coming via the Internet,” lines, copy and prices specifically taiways,” says Ron Agronin, CFO of Cathe says. “The other 50 percent have to lored to each individual recipient. alogixx in Owings Mills, Md. “It can go be driven to the store. Stochastic brings data analytics to the in a catalog or it can be sent out as e“The Internet is great for lower-end table, building the data model that idenmail, postcard or brochure.” transactions,” Layton says. “On the tifies which products should be marketThe description of Catalogixx’s softother hand, if [shoppers] sit down in ed to which customer. ware may seem fairly simple, so it’s diffront of the computer with a catalog in Most retailers use enterprise-wide sysficult for retailers to comprehend the their hands, they buy more.” StORES tems that track customers’ purchase his“power of the system, that you can realtories. With that raw data, “it takes ly target,” Agronin says. “It’s not perFred Minnick is a professional writer about 90 days to build a model and sonalization,” he stresses. “It’s not based in Louisville, Ky. He covers a thereafter, you can have every printed [merely] taking a catalog or a brochure broad range of business topics. 46 STORES / MAY 2008 WWW.STORES.ORG and putting a person’s name on it.” Agronin compares the system to a personalized shopper, somebody who knows exactly what his client wants and understands his budget parameters. A professional Nordstrom personal shopper, he says, “could build a Nordstrom catalog that would come from them with a personal letter and just the products that he thinks [his client] would be interested in. http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - May 2008

Stores - May 2008 Contents Executive Editor's Page President's Page Contrasting C-Level Compensation Across Segments What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Cover Story: Concepts That Clicked Concept2Watch Kiosks Artificial Intelligence Tech Support Online LPinformation Data Synchronization Human Resources Site Selection POS Selection Communications Biometrics Networking Systems Credit Loeb Retail Letter Arts Update Point of View NRF News Retail Crossword Retail Industry Calendar Last Laugh

STORES Magazine - May 2008

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