• by Steve Smith , Staff Writer @popeyesm, August 12, 2011

"What will it take for you to walk out of here today with this new car?" I recall a dealer asking me years ago after protracted haggling. He had had an opportunity to take my measure, knew that I disliked being "sold" anything, and was smart enough to toss it in my court to give me a sense of control over the next offer.

The one thing most difficult for e-commerce to virtualize is this wisdom of the floorwalker, the sharp-eyed salesperson who sizes up a customer and what they are after. At an online retail store, retargeting users as they go off elsewhere, even with a dynamically generated image from their abandoned cart, is an effective if inelegant approach. Yet, matter how many times I return to that site to contemplate the same purchase, I may get retargeted pretty much the same way I am if I visit it once.

"But if I am in the market for a high-def TV set and walk into a store four times in two weeks, someone would have walked over to see how to make this happen," says Mark Douglas, CEO of Steelhouse. In his company's "behavioral commerce" model, re-visitors to a retail site will get incentives to buy targeted to their individual shopping personality.

It turns out there are scores of shopping profiles into which a visitor might fall, but SteelHouse has identified 10 that are most prevalent. For instance, there is the "Distracted Shopper" who starts the checkout process but often doesn't complete it for one reason or another. There is the Premium Shopper, who is always on the lookout for the prestige brands and the latest features in products. There is the Free Shipping Hunter who simply does not want to buy anything from anyone who won't throw in free shipping. There is also the Wish List Shopper  who doesn't often buy but likes to pile items into the online cart just to see what it adds up to.

 

The point of a behavioral commerce approach is to understand what the shopper's tipping point is, says Douglas. Unlike traditional behavioral targeting that tries to identify and segment people according to who is and is not "in-market," "We're about the shopper on the retail site who is ready to buy and needs some right offer to get them over the finish line."

 

Based on the anonymized and aggregated data from this and other sites, SteelHouse fits the shopper into the appropriate profile based on how often they visit, how far along they get in the shopping process, when they abandon a cart. Or that same data allows the retailer to craft a custom profile. "It might be that I want to see everyone who came to the site in the last seven days who looked at over $200 worth of items and who put at least $100 worth of product into their carts before abandoning. Let's make them a direct incentive."

SteelHouse works with some of the larger retail, entertainment and tech retailers, but among those they can disclose are Gazelle, Isabelle Oliver and 4inkjets. Steelhouse applies the learnings about consumer responsiveness to different kinds of offers across their client base. Contouring offers based on behaviors can give the retailer a wide range of possibilities and levers to pull in instigating a sale. One retailer targets messaging to people who were shopping for items that were low or out of stock. They get alerts that specific things are back in stock.

SteelHouse worked with Cooking.com, which runs stores for Starbucks, The Food Network and Pillsbury. They were looking to increase conversions but had not gotten the results they wanted  from traditional retargeting and demographic and product targeting. For Cooking.com, SteelHouse located three shopping types that were especially ripe for offers. The Coupon Code Shopper waited to pull the trigger until a specific offer was made for limited time coupons. These shoppers got a free shipping coupon code, and the company saw a 498% lift in conversions compared to a control group. Targeting Distracted Shoppers with special offers that kicked in if they completed the online order brought a 382% lift. And for Premium Shoppers, the offer pushed high ticket items and special offer that activated for orders over $300. This brought a 163% lift.

Unlike retargeting and other ad models, SteelHouse works on a rev share basis with most clients and CPC to a lesser extent. While every retailer has its won particular audience, Douglas says it is remarkable how consistently you find the major shopping types across retail segments. There will always be the premium shopper who are looking for the top 25 items, or the free shipping hunter who just refuse to pay for shipping.

Interestingly, the company through Douglas has some of its roots in online matchmaking. He was with eHarmony for a number of years, where he learned more than a little about profiling based on personality and countless behavioral attributes.

Which almost seems like too good a segue to the next business model. How about a relationships matchmaker site based on compatible shopping personalities? If you have ever witnessed the battles between married couples in the aisles of Target or Shop-Rite, you know there is a market need for this.