ATG is building out its personalization feature set with the US$10 million acquisition of best-of-breed vendor CleverSet. It is the first acquisition the company has made since its $48.3 million eStara deal in 2006.
CleverSet is an automated personalization engine delivered in Software as a Service mode. Sometimes called “recommendation engines,” “discovery engines,” or “behavioral targeting tools,” automated personalization technology allows retailers to increase relevance through activities like matching cross-sells to customers based on interests, or customizing clickstream paths based on previous purchase or visit histories, according to Forrester.
More Data Points
ATG already had basic functionality in this space — a merchant-driven, scenario-based personalization feature set — but the CleverSet deal adds a considerable level of sophistication, ATG Chief Marketing Officer Cliff Conneighton told CRM Buyer.
For instance, a shopper whose previous purchases peg her as a fashionista goes to a Web site with an automated personalization engine. A typical application would first display high-end products in the category — say, shoes — she is searching.
CleverSet’s functionality brings hundreds more data points into the equation, Conneighton explained, some of which are completely unrelated to the buyer but still have a bearing on the sale.
Weather, for example, is one of the metrics that weighs in the decision-making. “[The application] may observe that sales of boots go up when the weather is bad, so if someone is looking at clothes, the site may automatically offer up boots as a cross sell, instead of winter coats,” he said.
From DoD to Fashion
CleverSet’s technology incorporates advanced statistical relational learning based on Bayesian network analysis that the company originally developed for the U.S. government agencies — including the Department of Defense — for e-commerce and intelligence analysis applications, said CleverSet founder Bruce D’Ambrosio, associate professor emeritus at Oregon State University.
In practical terms, this approach uses more types of data from more sources, instead of relying on industry-standard techniques like collaborative filtering.
CleverSet can be implemented as a stand-alone application, as it is operable on both homegrown sites and competitive platforms. “It will help us gain a competitive edge against companies like IBM, for instance, that don’t have any of this functionality,” Conneighton said.
Web site personalization is an underutilized technology that is poised to grow as e-commerce continues to expand, observed Forrester Research principal analyst Sucharita Mulpuru in a report released in December.
“As the amount of content online grows — particularly on e-commerce sites that often sell tens of thousands of different products — and consumers are left to wade through cumbersome experiences on their own, personalized e-commerce experiences promise customer engagement and loyalty through increased relevance,” she wrote.