Dermstore, a dermatologist-backed online store, depends deeply on its relationships with customers. However, keeping track of more than 1 million active customers is no easy task.
Launched in 1999 by a board-certified dermatologist, the retailer has been a wholly owned subsidiary of Target Corporation since 2013. The fast-growing online retailer offers a wide range of professional strength and salon-grade skin care, beauty products and cosmetics through its website as well as its spa/store location in Hermosa Beach, Calif. For the multi-year customer service award winner, knowing its customers as more than just a number is of vital importance.
For this personalization, Dermstore turned to Custora. “We wanted to leverage predictive intelligence to drive our marketing strategy,” Beaupain says. “The Custora platform helps us send the right message to the right customer.”
The platform allows for fast access to data, she says. Dermstore uses Custora to reach shoppers at critical points in the customer lifecycle, such as when a loyal customer visits and sales dip. Data science rather than the usual business rules are used to determine when to intervene in a customer relationship, ensuring Dermstore is speaking to its guests at the most relevant time for them.
The Solution: Point-and-click access to customer insights
Custora’s Segmentation Studio, a web interface with point-and-click access for insights needed in marketing campaigns, gives Dermstore the ability to build and look at different customer segments, Beaupain says.
This tool helps marketing teams and retailers improve the return on investment of email, direct mail, Facebook and display ad campaigns.
“We can go down to category level, for example skincare purchasers. We can look at transactions [or]which promos brought them to our site. The platform helps our team prioritize promotions and understand our customers better.”
Members of the marketing team at Dermstore can access customer data through the platform and easily segment customer data. It is no longer necessary to take a number and wait for help from an overworked IT department: Marketers can run their own data queries.
“Segmentation Studio has helped us bring power back to our marketing team,” Beaupain says. “Our team runs its own queries in our large data pool to come up with strategies that actually work.”
The retailer’s results have been even healthier since using the new platform for customer segmentation. Dermstore has realized an overall revenue lift of about 2 percent on its entire business.
Custora collects data regarding offline orders, online orders, website visits, email and other touchpoints, and then organizes all the data around each unique customer. Customer profiles are augmented with a suite of predictive models to determine preferences in products, price points and discounts as well as lifecycle stage, propensity to return items and more. Diagnostics run to determine areas of opportunity for segmentation to impact the top and bottom line.
The platform is integrated with tools across marketing such as automatic email to seamlessly deploy customer segments into any marketing execution systems. Measurement tools quickly determine the success of targeted marketing campaigns.
Since using the new platform for customer segmentation, Dermstore has realized an overall revenue lift of about 2 percent on its entire business.Implementation of customer segmentation can be creative and add to the bottom line. Marketers know that the top 20 percent of customers often drive the bulk revenue of the brand.
Custora uses predictive lifetime value models to identify customers most likely to be in the top segment before they actually spend to this top level. For markdown items, the platform can find customers who like the item in general and love to shop clearance sales.
Beaupain says the next frontier for Dermstore is integrating customer insights into “massive personalization” moving to day-to-day rather than just at key moments. Her marketing team is partnering with Custora on the integration of individual user-level predictions into the content of daily emails.
“Creativity does not work linearly,” she says. “Marketers can now become data scientists as well as idea artists. This platform helps blend both areas.”
A version of this case study by D. Gail Fleenor originally appears in the September issue of Stores magazine.