Creating a New Market Inspired by Hyper-personalization with Obviyo
Algorithms run our lives. They power our go-to social media apps and favorite DTC brands. Obviyo harnesses the power of those algorithms—the same AI used on Amazon—to connect visitors’ buying signals to hyper-relevant product recommendations. We chatted with VP of Marketing Ben Virdee-Chapman about where hyper-personalization is heading and how Obviyo is creating a new market inspired by the technology.
Creating a New Market Inspired by Hyper-personalization with Obviyo
Algorithms run our lives. They power our go-to social media apps and emerging DTC brands.
Obviyo harnesses the power of those algorithms—the same AI used on Amazon—to connect visitors’ buying signals to hyper-relevant product recommendations. They’re an ecommerce tech vendor for Shopify Plus merchants, helping brands maximize their revenue potential and reach new customers.
The world no longer revolves around personalization. It’s all about hyper-personalization. And, Obviyo is leading that charge. So, we chatted with VP of Marketing Ben Virdee-Chapman about where hyper-personalization is heading and how Obviyo is creating a new market inspired by the technology.
Unlocking The 90% of Non-buyers
Amazon invented hyper-personalization. Now, consumers expect curated product recommendations.
Ben thinks of hyper-personalization as personalization to the extreme, combined with cutting edge machine learning and shopper intelligence. Typically, hyper-personalization happens in real time. And, the secret ingredient is live buying signals.
Most brands look at their existing customers, their habits, the products they buy, and when they buy them to create a predictive model for everyone else.
But, “Part of online shopping is serendipity,” says Ben. Consumers go back and forth between different sets of products. One minute they’re looking for a sofa, and five minutes later they’re looking at drapes.
Amazon recognized that consumer behavior years ago, and they’ve invested tons of cash into creating a system that’s learning and listening to how people shop online.
The key insight: Only 10% of visitors to an ecommerce site are actually customers. 90% of visitors are non-buyers.
The majority of DTC brands treat the 90% of non-buyers like the 10% who survived the checkout funnel. But, that’s a mistake.
“The traditional personalization process passes over those shoppers who don’t usually buy.”
Creating a New Market
Looking at today’s saturated market, the Obviyo team decided to try and create a new market, rather than find a gap. Could Obviyo have a new POV on this hyper-personalization game?
First, they looked at the methodology behind the technology. Then, they studied how the technology is applied, starting with Amazon.
The Obviyo team quickly realized:
- Amazon’s technology is incredibly advanced.
- They’ve built an entire system around applying this technology to their business.
In 2018, 35% of consumer purchases on Amazon were driven by product recommendations based on algorithms. First, they figured out the technology, and then they took it one step further and created their own system.
When Amazon made their personalization algorithms publicly available, Obviyo wrapped those same algorithms in a Shopify app. Their app—Obviyo Recommend—uses live visitor buying signals to generate hyper-relevant recommendations on the fly, reaching that 90% of non-buying visitors.
“Having the best tech is one thing. How you apply it is the holy grail.”
Prioritizing Revenue per Visitor
More than anything, Obviyo cares about revenue per visitor (RPV). That’s because it’s an objective measurement of the dollar value of traffic coming through a store. Ben sees it as an index of conversion rate and average order value.
If brands improve and grow RPV, their conversions and average order value will go up.
DTC brands are trained to look at conversion rate, average order value, and existing customers. But, Ben argues that conversion rate is volatile and can easily become a vanity metric.
He’s not discounting retention or loyalty. Rather, he suggests that brands take a step back and challenge their assumptions about optimizing for conversions.
With Obviyo, most brands see an increase in RPV within the first seven days. But to make that happen, it’s not a set it and forget it deal. Brands commit to the game of running a diversified portfolio of personalized product recommendations.
“Every site has a huge, untapped audience. Brands aren’t serving them because personalization isn’t designed for that audience. Hyper-personalization is designed for that audience.”
AI and machine learning are almost table stakes for any ecommerce technology vendor.
There will always be groups of vendors selling buzzwords and the bells and whistles. But then, Ben thinks there will be a new, breakout group of ecommerce tech vendors who see personalization from a different POV. That includes Obviyo.
These vendors will figure out how to apply the underlying technology of hyper-personalization through a system, and they’ll start asking the hard questions, including if it’s even ethical to influence and manipulate consumers with algorithms.
That’s where hyper-personalization is heading.
“The next best vendors will ask a different set of questions. They’ll have a different POV on how customers can use technology in a new way.”
- What to pledge
- How to improve
- Which tools will set you up for success
I think the most important thing brands can do in 2023 is to better manage their customer data—both ethically and effectively. There’s an opportunity for brands to know their customers better than ever before—a clear benefit for both the customer and the brand. When you manage your data correctly, you’ll create stronger and more personalized ads, creative, site experiences, and so much more.
This is a classic: Let the data guide you. Go where the buyers for your products are and communicate with them on a personal level (i.e. by persona and funnel position) and nurture those relationships (past, present, and future customers). It’s possible—all through data.
We recommend that Shopify brands analyze and update their websites using data-driven decisions. Using analytics tools such as heatmaps and scrollmaps can help brands better understand how customers are interacting with their store.
Store owners tend to make assumptions about the way customers interact with their website. Most never go back and analyze their design choices to find pain points or areas of opportunity. By using heatmaps and scrollmaps, they can see where real customers are clicking and concentrating their attention. Leveraging this data, brands can start to iterate on design and make their online store experience streamlined and intuitive.
Hotjar provides a simple way to implement heatmaps, scrollmaps, and recorded user sessions on your site, helping you acquire incredibly informative user data. Additionally, it gives you the ability to create on-site surveys, which allows you to obtain direct and often critical feedback from users about their experience.
Test various attribution models and analyze the impact on your business. At Fifty Six, we are always here to help our clients identify and optimize their approach—a critical step in any successful marketing strategy.
If I’ve said it once, I’ve said it a million times–Customer Lifetime Value. And even more importantly, Future Lifetime Value (FLTV). With the ever-growing importance of first-party data, it is crucial that brands take a good look at their CRM and FLTV metrics.
OrderlyEmails is our go-to tool for transactional emails. It helps us level up our brands’ email aesthetics with customizable, quick-to-implement Shopify templates.
Lately, I’ve been really interested in Smile.io’s loyalty platform. Their UX is fantastic for teams with low bandwidth!
Stop allocating budgets to low-hanging fruit that doesn’t move the needle on conversion. Think about what’s really going to improve your CX and the return of undertaking different initiatives—not just on what’s top on your list of bugbears on the site!
One of the best ways to understand your customer behavior is by using HotJar. Their heat-mapping and screen recording tools shine a light on where customers are navigating to and from on your site, where they're rage clicking and experiencing frustration, and where conversion is dropping off within real life customer journeys and flows!
Understanding your customers’ pain points via data and analytics , will allow you to work with your CRO/CX Agency to solve customer frustrations and improve conversion.
Rewind backs up all product, customer, and order data for Shopify sites—essential since Shopify itself doesn’t provide this solution. It's saved so many of our clients time and money from administrative accidents.
Never miss an update from Tydo
33% of customer service inquiries are pre-sale questions. What does this mean? If you’re not investing in customer service, you’re missing out on revenue-generating opportunities.
The benefits of elevating your customer experience:
- 10% to 25% increase in AOV for customers who engage with live chat pre-purchase
- 21x higher conversion rate for customers who reach out via Live Chat or SMS compared to other site visitors
- 87% of customers who have a great customer experience will make another purchase
- 72% of customers share positive experiences with 6 or more individuals
Gorgias is our favorite Helpdesk platform. They can reduce costs by 35%, primarily by decreasing the average ticket handle time. Their machine learning algorithms are trained on millions of ecommerce-related interactions across Gorgias’ customer base and provide accurate, automated replies for the most common ecommerce inquiries. This helps our agents resolve tickets faster, which provides the customer a seamless experience.
Trust your agency! Agencies do the same things across multiple brands and niches, so we see the trends and have the practice and experience!
Don't be afraid of data and insights. If customers aren't clicking on your emails, try a new CTA. If your ads are driving good metrics at a small spend, start scaling. If your customers are complaining about a product, look into QA! If the data tells you something isn't working, let it go and try something else!
I'm supposed to say Tydo, right? 😉
Double down on differentiation. There will be a lot of headwinds this year and standing out from the crowd will set you apart.
A picture is worth 1,000 words. A video? Probably millions. In ecommerce that value translates into engagement, acquisition, and retention—everything you need to impact your bottom line.
At soona, we've seen the we've seen the impact of creative and the continuous split testing of it yield results. Our resolution is to challenge ourselves and double down on innovation and creative optionality so that each brand we work with can distinguish themselves in a crowded sea of D2C ecomm. We'd love to see our brands share this resolution and keep pushing the creative limits.
Klaviyo. We're using it to power our email and newsletter at soona too!
Optimize your returns strategy! This can lead to valuable customer insights, enhanced user experiences, and increased revenue and customer loyalty.
Brands need to dive deeper into understanding their customers to set themselves up for success. Conduct research to gain insights into customer needs, preferences, and behaviors. By doing so, you can develop targeted strategies that will enhance customer experience and boost overall retention.
Right now I would say Gorgias. Having a good customer service tool is crucial to building strong customer relationships.
Start paying heavy attention to data, specifically around retention. We see a lot of effort put towards acquisition with the assumption that once someone buys, they are your customer forever. Instead, get to know your customer, understand their needs, and analyze their behaviors once they are on-site and judge their sentiment after they have visited. Work with a retention focused and data-driven agency to implement tools that contribute to repeat business and customer delight. It will pay dividends.
When surveyed, about 80% of ecommerce merchants think that they are delivering a great experience to their customers. However, when the same customers are surveyed, only 8% of those customers think that they are getting a great experience from the merchant. Now, more than ever, retaining loyal customers is an essential part of any online business and you should spend time with your customers to judge their experience with your website and products and offer improvements based on that feedback.
Tydo's report cards are an essential tool, along with Klaviyo for email and SMS, Recharge for subscriptions and memberships, Okendo for reviews and surveys, Rebuy for AI driven collections and upsells, Loop for self service returns... each tool is great on their own, but their strength as the ultimate tool comes from when they are used together!
Never miss an update from Tydo
Report Cards is a customized glimpse into your business, delivered to your inbox for free.
Report Cards consolidates all your key metrics across platforms for an at-a-glance pulse of your business.
Discover metrics for every team member so they can stay updated with the right data on a daily, weekly and monthly basis.
It's free because we believe everyone should have access to the basics.
Portfolio is a hub for analytics across multiple Shopify stores. The perfect tool for agencies.
See an aggregate view of all your data for all your stores in one place.
Make real time assessments on marketing initiatives across every storefront you manage.
Analyze the performance of one store versus another in seconds.
More about the project
Here at Tydo, we try to highlight DTC founders who run their business in various ways. And, that's because there's no "right" way to run a DTC brand.
This project illustrates exactly that. Whether it's how a founder supports their team or how they talk about mental health in the workplace, every founder has a different approach. How do they discover these different approaches? One way: reading. Discover the greatest books that have changed the way 15+ founders think about or operate their business.
You can also listen to these book picks on Spotify or Anchor.fm.