Fashioning A Customer First Digital Strategy

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customer story:

Fashioning a Customer-First Digital Strategy

About ModClothModCloth 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 décor with fellow enthusiasts, opening up her closet full of thrift-store

finds to online shoppers. Her boyfriend at the time—now, her husband

and the company’s co-founder and chief executive officer—Eric 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 website’s retro and

vintage-inspired apparel, shoes, accessories, and home décor 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%


a monetate customer story | 2

Growing a Community of CustomersIf you want proof that the way people shop is evolving, look no further

than ModCloth. One of America’s fastest-growing retailers, this online-

only 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. “We’re 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 reviews—which often include pictures of

customers wearing or displaying their purchases—to 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.



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 ModCloth’s

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 conversion—but for us, it’s 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 ModCloth’s 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. It’s the core

reason why she would come back again and again.”

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



Merchandising as the Ultimate MatchmakerWhen a woman meets the right dress, pair of shoes, accessory, or decorative

housewares item, it’s 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 there’s 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.



Case Study 1: I’m 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

segment’s 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 we’re effectively able to both target

and deliver content. It’s a powerful combination for us.”

Badges that call attention to new items from a customer’s favorite designers quickly connect her with products that might be of interest .



Case Study 2: There’s 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 Monetate’s powerful product

recommendations to personalize its suggestions.

To welcome new visitors to its website, ModCloth recommends its best-

selling 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

ModCloth’s 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 .



To better serve returning visitors, ModCloth is testing a viewed-also-

viewed 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 .



Innovative by DesignFor a company that celebrates creativity and has an actively engaged

customer base, it’s 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, we’ll put quick links up within a matter of days to help her get to the

products she’s interested in.”

With hundreds of optimization and personalization campaigns running

at any time, it’s clear that ModCloth isn’t 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 company’s goals.

“We have a high number of campaigns active,” she says, “but the way that

we’ve 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 [Monetate’s] 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



One of the ways ModCloth leverages its customer’s size history to personalize future website visits is by serving a homepage image

that promotes and links to its collection of plus-size apparel .

Case Study 3: One Size Does Not Fit All—in Apparel or Websites

Since sizing often differs greatly from one brand to the next, one of the top

challenges women face when shopping for apparel—especially 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 retailer’s 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, that’s not necessarily true because of the wide variety

of independent and international designers that we work with. So we

leverage our customer’s size history to help her find the product that’s

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.

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



“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,

ModCloth’s 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.

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 customer’s 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.

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%.

ModCloth taps into the power of customers’ affinity for different fashion trends—in this case, “pin-up style”—to personalize

both the navigation (top) and homepage (below) .



The Social ConnectionWith a target demographic that’s young and female, it’s no surprise that

social media factors largely into ModCloth’s digital marketing strategy.

Walsh says the retailer was quick to establish strong communities on

Facebook, Twitter, and Instagram. She also points to the company’s

growing followers on Tumblr and Pinterest.

“Often, as in the case of Facebook,” Walsh explains, “she might be clicking

on a friend’s wall post. You know how tiny those are. She doesn’t 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 Gallery Contributor, Daria .



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 ModCloth’s 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

ModCloth’s 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 .



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.

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 .

For a long time, retailers have relied primarily on gut instincts to guide their businesses. But at ModCloth, we’re 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



A Teamwork Approach to Innovation That’s Always in StyleAs ModCloth’s 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 retailer’s user experience team helps it take full

advantage of Monetate’s 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 there’s one more team that is integral to ModCloth’s success in creating

the most relevant, personalized experiences for its customers: Monetate’s

Client Success team.

From introducing ModCloth to new Monetate features as they’re 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. “It’s really helpful

to have their expertise in that area.”



Personalizing the Website From Head to ToeA 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 year’s time, for example,

the retailer went from targeting a single hero image and three to four sub-

banners 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.

“We’ve taken a great leap forward,” says Walsh, “and the homepage is

probably the easiest place to see that evolution. But now we’re 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. It’s 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. That’s the

next frontier for us,” says Walsh.

This new frontier also includes the retailer’s 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.



“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. That’s why Monetate is important to ModCloth’s business.

“For a long time, retailers have relied primarily on gut instincts to guide

their businesses,” says Eric Koger. “But at ModCloth, we’re 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



About MonetateMonetate 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 company’s solutions

and conversion expertise enable marketers to deliver a more relevant

customer experience with unprecedented agility.

Leading marketers rely on Monetate’s 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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Fashioning A Customer First Digital Strategy

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