Author: Avran


Magento Catalog Search No results page

Posted on December 18, 2017 by


No matter how awesome your search engine is, there are going to be instances where you will show the visitor “No products were found for that query”, or the world knows it a “No results page”. Our data shows that typically less than 4% of all search queries show this message and this 4% can be further broken down by the type of query. For the sake of this post, let’s assume monthly search volume is 10000, hence 400 queries have no product results to show.

In these 400 search queries, 50 of them are tied to content related searches like “Order number”, “FAQ”, “Size graph” and the other 350 are tied to queries where Tagalys would have shown products if the retailer carried them. It is these 35 queries that we now tackle with product recommendations on the no results pages.

Why Product Recommendations

At Tagalys, we realize that almost 99% of the visitors who ended up seeing the “No results” page, were first-time visitors. These visitors either do not have a clear understanding what is being carried by the retailer or are just browsing. Hence the product recommendations, are a quick way to keep them engaged vs. showing a message, that gives them no opportunity to interact further.

Hips & curves no results page

Which Product Recommendations

At Tagalys, we started with showcasing Best Sellers, New Arrivals, Top Viewed & Trending. The strategy behind these recommendations was to quickly give the visitor a complete overview of what is being carried by the retailer. We did not choose the personalized recommendations, as it works best with data and with limited or no data, it might actually be a turn off than a source to continue engagement.

Now you can leave the “No results” page without any change and it will not negatively impact your conversion rate, but showing product recommendations can only potentially improve your conversion rate marginally. We say marginally cause it will only impact the 4% of visitors that are exposed to this page. With Tagalys, we leave no stone unturned to help you improve your conversion rate

You can also track the impact of the “No results pages” with our reports, to validate if they help increase visitor engagement & conversion. If interested, signup for an account at https://next.tagalys.com/signup

Posted in e-Commerce Product Recommendations eCommerce Site Search

Semantic Search for e-Commerce – Do you need it?

Posted on November 14, 2017 by


Semantic search according to Wikipedia is “Semantic search seeks to improve search accuracy by understanding the searcher’s intent and the contextual meaning of terms as they appear in the searchable dataspace, whether on the Web or within a closed system, to generate more relevant results. Semantic search systems consider various points including the context of search, location, intent, a variation of words, synonyms, generalized and specialized queries, concept matching and natural language queries to provide relevant search results”.

In the world of e-commerce do you need it? or at what Site Traffic do you need to think of Semantic search to get the best ROI. To get to this number, let’s do some quick math evaluating the millions of search queries we process every month at Tagalys. Tagalys is a product & attribute search engine, hence anything that is semantic will not yield search results. Which means every semantic search query will show in the Tagalys “No results search report” in addition to product search queries that yielded no results.

Typically less than 10 out of 100 search queries results in a “No results” message from Tagalys. Across these 8-9 queries, are searches tied to products that are not in stock, not sold by the store. Fixing these addresses about 90% of all “No search results”. 1 query is usually tied to the visitor engagement like asking about their order status, promo codes, store location. This can be fixed by Tagalys Search URL redirects, which helps improve your visitor experience and may not directly translate into revenue.

Amazon Semantic search

At any online retailer, less than 0.5% of all search queries are semantic in nature. e.g., Dresses under $50, Rings below $999, Shoes between $75 to $150, tops for mid 30s women in the midwest etc., and over 90% of search queries are directly tied to products or combinations of products (Dresses, Skirts, Pants etc.,) & their attributes (Maxi dresses,Red skirts, Mens pants etc.,). This 90% is what Tagalys helps convert to its maximum and also giving you insights into the remaining 9.5% of search queries that do not have results but can be fixed by synonyms or URL redirects.

Sites like Amazon, Walmart etc., that capture over 10M searches a month clearly have a need for semantic search.

 

If you have the need for a semantic search engine, here are a few sanity checks to verify it works. Run a few sample queries using between, less than, under etc., to test if the engine understands contextual queries. When you see the results, do a sort by price High to Low and Low to High, to verify if the engine has limited the search results, but the context requested in the query. Try this across a few different product types and prices to verify if it has not been engineered as a static identifier of the query.

Having a site search engine in your e-commerce store that yields results for semantic queries using NLP starts to become important if you are seeing over 1M search queries a month, which means roughly 5000 semantic search queries (0.5%). If your site search conversion rate is 2% as an example, you can then expect an incremental 100 orders per month from the semantic queries. And if your average order value is $50, that’s $5000 in extra revenue.

So, do you need semantic search for your online store? Interested in a free trial of Tagalys Search? Sign up now, for a free 28-day trial. Ask for a 1-1 demo from our agent and get 30% off on your monthly subscription for any signup before March 2018.

Posted in eCommerce Site Search

Relevance only ecommerce Site Search is passé. Increase revenue with Intelligent Search results

Posted on October 30, 2017 by


Humans have the attention span of a gold fish

Or less. Time Magazine & Microsoft reported in May 2015, that “The average attention span for the notoriously ill-focused goldfish is nine seconds, but according to a new study from Microsoft Corp., people now generally lose concentration after eight seconds, highlighting the affects of an increasingly digitalized lifestyle on the brain.” If this is the state of online visitors, you need to think before deciding what products to show your visitors, cause they will lose interest in 8 seconds and you will lose a sale.

Get Smart

Site search is a high value funnel for online visitors. Visitors who search are more likely to convert to customers than those who browse. Then why is your site search engine, dumb? Yes, you read that right, if you have a site search engine that spits out all products just because it matches the query (keyword relevance), your search engine is not thinking and you are losing on revenue.

Get Tagalys

Search engines like Algolia, Swifttype and others, are known for very fast search results. But what is the point in ecommerce, when you have 8 seconds to help your visitors find something of interest? Take a search query like “Dresses” or “Sofas”, these generic searches will contribute to over 605 of your search volume and each of these searches will results in over 100 products per query. What do you show? These queries are driven from mobile devices and now, you have only 2 products per scroll. Thats over 50 scrolls to see all the products in for that query.

This is why you need Tagalys, to analyze data, learn from it and predict what products are most likely to sell for that query. Show results for any search query, where products are sorted by the probability of sale. Tagalys Search also offers other value added services like Search suggestions, Popular Searches, Pinned Searches, Merchandising, but the core of what we do is determine sort orders for products to ensure what shows on top has a higher probability of sale.

Tagalys also applies the same data driven approach across all our API’s so you can ensure your visitors engage with the products that are most likely going to bring you a customer. We apply our data driven approach across Site Search, Product Recommendations & Product Listing pages. If you want to go one step further, we also apply personalization, which is the ability to understand what products are most likely going to appeal to each unique visitor.

Signup for a 28 day free trial and find out for your self. No credit card required. Let the numbers speak for itself.

 

Posted in e-Commerce General e-Commerce Personalization eCommerce Site Search

Magento 1 & 2: Increase ecommerce SEO traffic using Intelligent Product Listing pages

Posted on October 25, 2017 by


High-value organic traffic at any e-commerce store is the most efficient way to reduce customer acquisition costs. This improves your path to profitability. At Tagalys, many of our clients use Intelligent Product Listing pages and get the added benefit of ranking high on search results for keywords that are on these product listing pages.

What was most fascinating is that the keywords on these product listing pages showed in the top 5 SERP results consistently across all clients. So we did some research on clients to see common factors that led to ranking high on SERP. We also noticed that clients, whose Tagalys powered product listing pages ranked high on SEO, also had an SEO expert adding the right elements on these pages directly and ensuring the pages were listed on the site map and on a landing page. The reason why there were listed on the sitemap, landing page or anchored on the home page, was to have a search engine bot, index this page, collecting all the details, thus allowing it to calculate a relevancy score for the keywords mentioned on the product listing page.

Before we get into the details, here is a brief video on Intelligent Product Listing pages

The below elements are features available in Intelligent Product Listing pages which can be directly utilized without having to add details to your e-commerce platform

Bounce rate: Probably the most important metric that helps sustain & improve the SERP ranking of a product listing page but often overlooked. In order for bounce rates to be low, organic visitors need to visit another page like a product page or another listing page once they view your product listing page that showed in SERP. You need to know what products to showcase, to want your visitors to click on them. Most online stores, spend time on the SEO hygiene factors that we list below but do not have any idea what products to showcase on the page. They tend to sort them by some basic sort orders like new arrivals, most popular, best sellers without understanding or evaluating if this sort order will lead to high CTR from the product listing page to the product page itself. This sort order is the core competency of Tagalys, as our TRENDING sort order, orders products on the page by calculating the probability of sale, based on the historical data of how visitors are engaging with products at your store.

From a search engines standpoint, high bounce means the traffic it sends does not find the page interesting thus to protect itself, it will start removing your page from the SERP to show other pages that have lower bounce rates.

Page Title: Always have your search keyword as part of the page title starting with a verb e.g., Buy Maxi Dresses between $999 and $1499, Shop Diamond Rings with Rubies etc., Visitors seeking to visit an e-commerce store are more likely to use a verb in their query vs. a visitor seeking to know more about content sites.

Url component: Having the search keywords as part of your URL also helps increase the relevance of the product listing page to be found in the search index. Keyword density and availability of the keywords closer to the domain name in the URL are critical in the relevance index for search engines

Page Heading: Not always required, but helps with SEO, to further re-enforce the keyword relevance in the product listing page, leading to better ranking on SERP.

Description: It is important to have a specific description of a page and not a catch-all, as that can lead to higher bounce rates which also affects your SERP ranking. For example, if your product listing page is about Maxi dresses, ensure the description talks about the maxi dresses and not what it can be paired with like peep toe shoes, pearl jewelry etc., This is because if a visitor searching for pearl jewelry stumbles upon your page for maxi dresses since “pearl jewelry” as it was in the description, they will leave the page thus increase the page bounce rate. This low conversion metric, reduces the rank of the page thus limiting visibility in future organic search results.

Meta keywords & Meta Description: While there is some value in having these fields with relevant keywords, we have seen that they do not play a significant role in SERP rankings. If you have good content listed in the title, URL & description, it would be sufficient for meeting high relevance scores for the search keywords in question.

All of the above variables can be easily entered & edited by e-commerce teams, without having to modify this on the backend of your platform.

Domain ranking: All of the above works well, assuming your domain has higher authority in the SEO world. For this, search engines like google report on a domain score that looks at variables like your page load time, mobile friendliness, 404 redirects, etc., Hence if this basic hygiene is not met by your store, that could lead to a lower score on SERP, as your domain is ranked low by the search engine.

Watch our demo site to learn more or schedule a 1:1 demo with us at your convenience. What are you waiting for? Contact us now or start your 28-day free trial immediately. You can also read more at Intelligent Product Listing pages.

Posted in e-Commerce Product Listing pages

Amazon My Mix: Personalized e-commerce shop increases product views and conversion

Posted on October 16, 2017 by


Amazon, started a version of a personalized store called My Mix, in June 2017 to help visitors save time and find products quickly. The one common trend across every online store globally is that over 60% of their visitors, engage with the store via a mobile device. This changes the expectation of behavior as visitors on mobile devices have more urgency that visitors on desktop, they are typically on the go and get to see only 2 to 4 products per screen. So should you design a separate site for mobile visitors? No. Applying a personalization engine will address this challenge and a personalized store ensures visitors are more likely to stay longer at your store.

What is a personalized store?

Personalized stores from Tagalys, collects every signal left by visitors across your site to learn more about their interest and predict what products they might be interested in. This API collects data from online retailers via a Tagalys analytics file, requiring no additional work from clients to snd the data and applies real time 1:1 personalization to create a personalized store in real time.

Visitor benefits of a personalized store

While the benefits are applicable across devices, we feel the personalized store is more suited for mobile users, cause it allows them to engage with online store in a frictionless manner. By this we mean, if you have shown interest in midi skirts and maxi dresses for example, instead of having to navigate back to the categories and restart your browsing experience, the personalized store would already have that available for you, saving you clicks, time and the efforts to start your experience. It is like the store reorganizing its aisles for each visitor vs. having each visitor walk across the static store each time to restart their shopping journey.

Retailer benefits of a personalized store

Since the retailer now has the ability to dynamically reprioritize what products & categories to show each visitor based on their unique interest we have seen the following KPI’s improve at the store.

  • Engagement or reduction in bounce rate
  • Product views per visitor
  • Product views per session
  • Add to carts per visitor
  • Conversion rates that are 3X better that other product discovery channels

How do you signup for Personalized Stores from Tagalys?

Signup as a new client at Tagalys and install any of our extensions to your platform. Contact the Tech Support team from Tagalys and request them to enable Personalization for your store, as this API is not enabled by default. Our team will study your product catalog & configuration and work with you the determine the best personalized setup for your store. This process should not take more than 24-48 hours to be completed. Tagalys reports will also showcase the live data on the impact personalization brings to your store. This can help you determine if personalization from Tagalys is right for your business.

Posted in e-Commerce Personalization

ecommerce site search – Factors driving conversion to product views

Posted on October 14, 2017 by


Having an intelligent site search engine like Tagalys by itself is no silver bullet. The engine has to be used by visitors, only then can it analyze data and continue building intelligence to deliver the results expected of it. So what drives conversion or CTR to view products, besides the search itself

Design of the Search Box

Post integrating an intelligent search engine, retailers should make a change in design to ensure visitors coming back take notice of the design change, calling them to try the new search functionality.

 

Call to Action buttons

Now that you have made a change in design, it has been proven that unless a distinct call to action button is used to trigger your visitors click behaviour, they are still less likely to search and maximize the usage of the engine.

Facets & filters

Always ensure the search results have the most relevant filters to allow your visitors to quickly drill down. This is important, cause on mobile devices they are likely to view 2 to 4 product impressions per screen. Even if your catalog has less than 50 products per category, that could take 10 page scrolls to full view. Also filters also help visitors find products that may not be visible easy to group together. For example, products priced between $25-$50, or fabric = Red, Only full sleeves etc.,

Sort Options

You do not need to have all possible sort options, but some of the basic must haves are Price: High to Low, Price: Low to High, New Arrivals. The rest are optional like Name: Ascending/Descending, Sort by Brand name etc.,

After having all these in place, you have to review the analytics on a weekly/monthly basis looking at rolling averages, to see if you are making progress to metrics like searches/visitor, product views per search session, click depth etc.,

Check out Tagalys search and signup for a free 28 day trial.

Posted in eCommerce Site Search

Algolia Search vs. Tagalys Search

Posted on October 11, 2017 by


Do you want the fastest Search (Algolia) or really fast Search (Tagalys) that increases your conversion & revenue?

At Tagalys, we obsess about improving product discovery at our retailers. How do we ensure visitors click on more products from search results or how do we ensure they find the most relevant products in the first 3 scrolls. To our customers (online retailers) Site Search under 100ms to ensure scores are calculated and products sorted by what is most likley to sell, to help with end conversion is an acceptable trade off. Read our testimonials to know more.

Algolia is a brilliant product, incredibly fast and ideal for database searches. But does solve the needs of e-commerce search? Which is to learn what products are more likely to sell and optimizing your search results by showcasing products that are more likely to increase conversion for that query.  Here is a quick comparison of the two with data researched on October 1st, 2017

Tagalys Algolia
Search Personalization Starts at $900/mo Starts at $2500/mo
Localized Search results Yes No
30 days Reports & Analytics Starts at $49.99/mo Starts at $2500/mo
Default sorting Trending Relevance
Merchandising results Yes No
Display Popular Searches Yes No
Modify Popular Searches Yes No
Pricing based on Usage tiers Records + Indexing
Reporting period 30 days @ $49.99/mo 30 days at $2500/mo
Speed < 150ms < 50ms
IT/Tech heavy No Yes

*mo – Month, ms – Milli Second

With inbuilt analytics, Tagalys by default sorts search results based on what is trending. Trending is the analysis of visitor engagement data across the entire site to predict the best selling products for any search query, based on historical engagement data. It collects data utilizing Tagays analytics for site wide engagement, understands engagement pattern and determines trending scores for all products. It continues to learn and improve these scores as visitors interacts with the site. We also analyze data patterns across segments or for each visitor, to personalize search.

Algolia on the other hand has gone on record and said “Elasticsearch is a wonderful tool for Big Data analytics, but it is very difficult to reach a good relevance with it on database search. You can try to add some logic on top of Elasticsearch or try to reorder manually results for some queries, but it’s tedious work that continuously needs to be tuned. Algolia on the other hand focuses on getting a very good relevance with minimal configuration. While not optimal for all use cases, it makes it particularly appropriate for database search”. The tedious work is what Tagalys has solved for online retailers giving them an out of the box solution, with simple installation.

Both Tagalys & Algolia also cover some of the basics of ecommerce search like showing suggestions with autocomplete, spell check & live product synching. Our core lies in the post click analysis to keep learning from patterns and update trending, personalization or localization scores, so the products displayed in search results are more likely to convert.  So if we can help you with improving your conversion at less than 100ms, happy to show you a demo anytime.

Check out Tagalys search and signup for a free 28 day trial.

 

Posted in eCommerce Site Search

e-Commerce Site Search Review: Urban Ladder

Posted on April 25, 2017 by


Urbanladder.com is one of the leading venture funded curated online furniture sellers in India.

Yesterday I met with Ajay (Advertising professional) regarding a new Tagalys initiative, when he enquired if we powered Site Search for Urban Ladder. Unfortunately we do not, as their engineering budgets, allowed them to build, manage & continue innovating their site search needs. But the conversation with Ajay led to him sharing frustration in his search experience, especially cause he expected more as available in leading sites like Amazon.com. And add to this he was engaging with Urban Ladder via a mobile device, this frustration multiplies. Digging in deeper, he shared specifics of what was missing, so we thought we share this feedback with the engineers at Urban Ladder to help them continue working towards delighting their online visitors.

SEARCH BAR design (4/5)

Both mobile & desktop versions have an expanded search bar, that is visible to visitors on the home page & other product listing pages. What could improve is a more central location with a highlight and a clear call to action to nudge visitors to Search quickly, discover products and engage with Urban Ladder.

Search Suggestions (3/5)

Predictive suggestions are generated as the visitor continues typing the search query. UL either runs the partial query through historical searches, inbuilt suggestions or a combination of both to show a prioritized list of 8 completed suggestions. On the outside this checks the box, but the key metric is the CTR from suggestions to listing page views and lets assume this is also done by the team.

What could really improve is the way the suggestions are presented to the online visitor. It does not break down the suggestions into a category, subcategory or other attributes that matter to the visitor, thus preventing any chance of a search results drill down, thus shortening time to product discovery.

POPULAR SEARCHES (0/5)

Unavailable.

RECENT SEARCHES (1/5)

Only available on the mobile app.

SEARCH RESULTS (2.5/5)

80% of visitor are likely to engage with less than 3 actions (scroll, sort, filters) on any listing page pages. It is critical to utilize segment analytics of engagement data to understand and predict what visitors want. That prediction when applied to each search query, shows the products in the order of highest probability of conversion, thus increasing the products viewed from search results.

At Urban Ladder keyword relevance plays a big part as products are displayed in the search results if the keywords are available in the product table. There is no filter being applied at the Search or options to drill down the search results. The default sort is called “Recommended by” which we assume considers engagement data across the site for a period X.

This is not a great strategy for UL as most search results will lead to a large number of product listed, thus requiring users to use Filters quickly drill down, but unavailable hence leading to bounce. This visitor behavior will also be higher on mobile devices. A few examples

Search for “Coffee table” when sorted by Price.

UL Coffee table

A search for “Study Table” when sorted by New Arrivals

UL Study table

 

UL should allow visitors to drill down into a category or subcategory right from the Search Suggestions or from a filter in the search results page. This will improve the quality of search results displayed when Sorts or Filters are applied.

FILTERS (1/5)

Only available filter is price on desktop & mobile. While price is a critical filter, its value is eroded when the search results are no longer relevant on application of the price filter as seen below. In the category of Home decor / Furnishings, we recommend adding filters like Category, Sub Category, Fabric, Material, Color, Discount/Savings as a bare minimum, to help visitors quickly drill down and find something of interest to them.

UL Filters 1

UL Filters 2

SORT OPTIONS (4/5)

All obvious sort options expected by visitors are available although it is unknown why “Sort by Discount” is only available in the mobile app. The default sort option is “Recommended” which we assume is a product sorting based on some form of visitor engagement analytics over period X for the search query.

Stemming (5/5)

Visitors search the same products in the singular & plural forms and others.. Urban Ladder has enabled stemming to showcase the same search results for both.

Screenshot 2017-04-25 14.21.05Screenshot 2017-04-25 14.21.14

Screenshot 2017-04-25 14.24.13Screenshot 2017-04-25 14.24.24

Spell Check (0/5)

An easy to implement feature, helpful to visitors but not implemented.  Screenshot 2017-04-25 14.26.29Screenshot 2017-04-25 14.27.43

Overall Urban Ladder scored 2.3/5.0 in our review. This means while Urban Ladder is converting visitors to customers, but there is room for improvement to

  1. Convert more visitors to customers through the Search funnel
  2. Reduce Time to transact (
  3. Reduce bounce sessions in Search results

Have feedback or comments contact us! Find pricing and Site Search products from Tagalys here.

Posted in eCommerce Site Search Site Reviews

Magento Catalog Search for e-Commerce: Pros and cons

Posted on April 4, 2017 by


Site Search within your ecommerce store is a way for your visitors to tell you what they want. If you show them the right products, it increases the likelihood they will become customers. You can Signup Now or continue reading.

Site Search can be configured in Magento, but there are some serious limitations depending on how serious you are about converting visitors who search into customers.

Product Sorting in Search Results: This is the holy grail of search results. What top products do you show for a search query within that site/segment/visitor. Your visitors will NOT scroll more than 2/3 pages to find a product of interest. In Magento Search, which works purely on relevance does NOT consider the engagement analytics within your site to determine the order of Search results. This means, you as a business owner have no control on what products are displayed to visitors, your best sellers could be in page 6, new products that have a higher probability of sale may never show on top and you have no influence to influence with your visitors. Tagalys Site Search for Magento on the other hand considers visitor engagement analytics that ensures the products  (new or old) shown for any search query have the highest probability of conversion and also gives you as a business the ability to modify those results based on internal business needs like a promotion, event etc., by using Search Merchandising and Pinned Searches.

Easy Configuration: If you visit System > Configuration > Catalog, you can easily choose various Search settings like “Like”, Full text” or “Combined”, Enable Popular searches & Search Suggestions. This is the easy part and can be configured in a few minutes. This is probably the only real advantage with the inbuilt Search from Magento.

The Tagalys extension for Magento search can take about 1/2 hour on average to install and is auto setup. Not bad, but still about 20 minutes more than Magento.

Search Suggestions: While easy to setup, is not configured to how consumers are used to shop on an Amazon/Walmart or leading ecommerce companies. Suggestions run from historical searches, but they are not grouped or prioritized for visitor click through and also lead to pages with no results. Tagalys is geared for predictive suggestions that will never lead to a “No Results” page and have the best engagement. Tagalys example below

Suggestions - dresses

Popular Searches: While easy to setup, is also not prioritized and calculated on a periodic basis to show the top N searches for the site. Searches are not grouped, hence you can find suggestions like “Dress” & “Dresses” one after the other as the queries and not processed internally and cleaned. These suggestions are also not validated to see if the resulting search page has results or not. Tagalys is geared for prioritized Popular Searches, that will never lead to a “No Results” page and have the best engagement, with added capabilities to modify these Popular Searches and promote your own to address business needs.Tagalys example below

tagalys popular searches

Spell Check: Not something to write home about, but this is also not available in Magento Catalog Search. Tagalys offers this be default in FREE and PAID plans. Tagalys example below

auto correct

Allow us to show you a demo or contact us and start your free trial now.

Posted in eCommerce Site Search

Negotiating a Make vs. Buy when a retailer wants to build a Personalization engine for their eCommerce business

Posted on December 26, 2016 by


Ok. The title was a geared to help in SEO, but the points in this article are applicable to any Make vs. Buy decision when it comes to online retailers and buying technology.

As on online retailer, your goal is to try and ensure customers have great shopping experience. Some of the biggest challenges in retail is figuring out what to have in stock, inventory, pricing, supply chain, marketing and branding. That is the retail component. The online in retail is a channel and technology enables you to deliver a similar shopping experience in that channel. So should you build the online component or buy to enable shopping for customers who choose your digital channel? While there are many parts of the online channel like the platform, pricing tools, payment gateways, recommendations, site performance, Personalization etc., Lets go over some areas that will help you decide this make vs. buy decision.

What is you core competency?

The best way we have figured our core competency at Tagalys in make vs. buy decision, is asking ourselves if we had to sell out (not that we plan to), will that negotiation be hit if that component in technology was not part our our internal IP. So while the engine is always developed inhouse, we sometimes outsource aspects like the UI for our dashboard, charting, connectors etc., that we considered fairly commoditized So, as a retailer and you had to an offer to sell your company, how much will your offer reduce if you did not build the Personalization engine?

Do you have a different expectation for Personalization?

Personalization engines from Certona, Celebros, Tagalys etc., all run on different algorithms. Some tuned for speed, some tuned for increased personal relevance, some for both etc., If you were to build the same inhouse, are you trying to solve a different problem that cannot be already solved by existing players.

What is the 5 year return on investment?

If you choose to build and invest the money inhouse, will the ROI ((Revenue Generated/Monthly cost) * 60) be more that an external vendor. Lets assume you gather a great team and within a month build a product that generates equivalent revenue that one of these world class products. Will the cost to acquire the team, monthly salaries, churn (employees leaving and hiring new employees), server costs and adding new members to continue innovating be lower that the cost to buy the same over Period X

How long (pERIOD x) will it take to build a world class personalization engine?

When we define time to build, we are talking about the time from Day 0 when this engine can generate the same conversion rate of product views to impressions. That is how you measure if your engine is working at scale, by looking at this metric and not purely on the customer conversion rate. While we were liberal to assume it can be built in a month, truth is it absolutely cannot. With more resources time can reduce, but you need to also consider a learning curve and churn.

What is the opportunity cost of making inhouse?

This is the biggest variable that is not considered by retailers who choose to build inhouse. While cost is easy to assume assuming no churn and soft costs, it is almost impossible to quantify the revenue lost or left on the table during the period X when a retailer is building this product inhouse. And this lost revenue should also be multiplied by the internal rate of return (IRR) that is relevant to this company.

I have been fortunate to sit on the other side (Buyer) of the table in my previous avatar at Deloitte and my previous company, where I always negotiated to get the best value for my client and business. Hence it is important, to look at value through a Total Cost of Ownership lens vs. short term Cost/Price lens.

 

SIGNUP NOW, join a free plan or a free trial to know whats best for you. 

Posted in e-Commerce General