A New Marketing Revolution: Introducing Shortlist Marketing

Every couple of years, a new solution appears with the promise of fundamentally redefining consumer marketing.  We've seen it with content marketing, mobile marketing, web retargeting and social marketing; the list goes on.

At the risk of sounding cliché, we are on the cusp on a new innovation called Shortlist Marketing but it will do what the other solutions could not: create a win-win for the consumer and the merchant.

For consumers, they will now have access to relevant, personalized discounts for items they are actively considering to buy.  For merchants, marketing campaign conversion rates and ROI will perform orders of magnitude better than other digital marketing options.  All of this enabled through the "Holy Grail" of marketing data.

Why Marketing is 99% Waste

Before diving into Shortlist Marketing, it's good to get grounded in the current state of marketing in general.

By any objective standard, the world of marketing has a skewed definition of success.  Just consider that we marketing professionals, day in and day out, celebrate the success of our campaigns knowing more than 99% of what we do yields zero results, i.e., 99% pure waste.  Even the most sophisticated, well-thought-out, and well-executed campaigns (a marketing “success”) often can’t get the target audience to click through or convert more than 99% of the time.

Don't get us wrong, we're not anti-marketing.   We're marketers through and through.  But we're dissatisfied with the tools at our disposal and frustrated with the limits inherent to the way marketing currently works (or doesn’t work).

That's not to say the existing marketing tools don't deliver results.  Of course they do.  Marketing does have impact but to call it inefficient would be more than kind.  What’s even worse, marketing is at odds with consumer interests.

And there's the rub.  Because it is highly inefficient, we as marketers ratchet up the volume to deliver the conversions we need.  However, with everyone doing the same thing in every marketing channel, consumers are getting hammered and overloaded.  As a consequence, consumers tune out even the campaigns that could be relevant and of value to them.   The marketer and consumer become at cross purposes.  But they don't have to be.

The cause and the answer to the current marketing conundrum is simple: everything comes down to data.  The marketer does not possess the necessary data to construct intelligent marketing campaigns.  With the right data, the marketer could send the right message to the right consumer at the right time in the right place instead of simply adding to the overwhelming din.

There are marketing solutions that can improve results by leveraging interesting data such as social “likes”, web retargeting and geo-location, to name a few.  None of them, however, individually or collectively provide all the insights that a marketer needs.

Holy Grail of Marketing Data

Marketers need to know five (5) things to construct intelligent marketing campaigns:

1. When is a consumer actively shopping for something?
2. What item category and key features is the consumer shopping for?
3. What products/brands are in the consumer's consideration set?
4. How much has the shopper previously bought in this item category?
5. Who has the shopper previously bought from in this item category?

Few would dispute that, with the answers to these five questions — call it the “Holy Grail” of marketing data — even a rank novice could construct a personalized, high ROI campaign that would vastly improve upon the current 99%+ waste.

But most would just as quickly point out that the data doesn't exist.  However, a new marketing solution called Shortlist Marketing is emerging with the promise of delivering this “Holy Grail” of data.  Within a couple of years, Shortlist Marketing will be here to stay and each of the major Internet players (Google, Facebook, Yahoo, Microsoft, Amazon, eBay, Pinterest, etc.) will need to have their own solution to compete in the digital marketing space.

The Foundation of Shortlist Marketing - A Shortlist

As an introduction to Shortlist Marketing, we have to discuss its foundation - something called a Shortlist.

What is a Shortlist?

A Shortlist is a tool for shoppers to save items they are considering buying across merchants/retailers into a central place, so they can further compare and review them.

The concept is nothing new. Shortlists help shoppers with what they have always been doing; i.e., filtering many options to a few in order for further consideration.  Shoppers use many tricks today to create their Shortlists including keeping multiple tabs open on their browser, writing items down and emailing themselves links.

Over the last several years, new technology has emerged which enable shoppers to save items across retailers/merchant into a central place.  Think of it as a cross retailer/merchant list feature.  These tools let shoppers create as many Shortlists as they like - one for Shoes, Computers, Dresses, etc.

There are two primary technology mechanisms to create Shortlists.  First, web browser plug-ins enable online shoppers to save items across websites into a central place.  Several options are available to consumers, including Google's Shortlist, JiSu's Universal Cart, AOL’s Favorites and Pinterest's Private Boards.  Second, several mobile apps enable in-store (offline) shoppers to scan bar codes or take pictures of items and save them to lists.  Again, several options are available to consumers including apps from Nextag and eBay's RedLaser.   

Why Shortlists are Exciting for Marketers

What's exciting about Shortlists from a marketing perspective?  Well, let's look again at the “Holy Grail” of data.  Shortlists provide the means to answer the first three questions:

1. When is a consumer actively shopping for something?
2. What item category is the consumer shopping for?
3. What products/brands are in the consumer's consideration set?

When shoppers create a new Shortlist and start saving items to it, they have taken a clear step indicating that they are looking for something.  This is a much stronger action than just searching in Google or visiting a site.  Not only that, shoppers are in an information gathering and consideration stage, so they want/need to learn more.  Shoppers will be open and receptive to hearing about options.

Further, the Shortlist can be analyzed to determine what the shopper is looking for - e.g., you will know the shopper wants to buy not only a couch but also key features like it has to be a sectional or have a pullout bed.  Generally, marketers accept the notion that the more relevant an offer is to a shopper, the higher the conversion rate will be.  With knowing this detail, merchants can be very targeted with offers on particular items (even at the SKU level).  It can't get any more relevant.

Finally, the Shortlist can be analyzed to identify which brands/products are in the consideration set of the shopper.   If shopping were a negotiation between the consumer and the merchant, the merchant is historically at a significant disadvantage.  The merchant flies blind as to which products/brands are on the shopper's Shortlist of potential options he or she is considering.  Does the Shortlist contain just one option or many?  Is the merchant on or off the Shortlist?  Insights to these questions would have major impact on how to best "negotiate" with the shopper.  We recognize shopping isn't a negotiation but the analogy illustrates the power of knowing who's in and off the Shortlist.

The Power of Customer Share of Wallet Data

Customer share of wallet data is extremely powerful but typically elusive.  Most retailers only have access to their own transactional data so they can be blind to how much a customer spends in a particular product category and how those purchases are split between them and competitors.

What does this mean?  Simply, retailers know how much value a customer currently generates, but they don't know the potential value of a customer.  Knowledge of the potential value can drastically change the types of messages and offers given to similar customers who have purchased the same amount.  Consider the simple example below.

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Armed with share of wallet data, Merchant A would very much change how they view Shopper 2 and future marketing engagement, offers and messages.

Shortlist Marketing - Redefining Marketing Through Data

What's so different and special about Shortlist Marketing?  The answer is data.  In fact, Shortlist Marketing is powered by the "Holy Grail" of marketing data.  This data is what marketers have sought for years, and no prior solution has been able to deliver.  With it, marketers can create truly personalized offers that are both attractive to the shopper and profitable to the merchant.

How Shortlist Marketing Works

As discussed, the foundation of Shortlist Marketing are Shortlists.  Once the Shortlist tool delivers recommendations in the Shortlist, the Shortlist Marketing platform is born.  The recommendations provide the means for marketers to speak to the shopper while reviewing his or her Shortlist through personalized offers.  The intelligence for the personalized offers are again driven by the "Holy Grail" of data.

Let's consider two examples on how Shortlist Marketing can work.

1. Personalized Trial Offer

Let's assume Merchant A's products are not in a shopper's Shortlist and the shopper has not previously bought from Merchant A.  In this scenario, the shopper is very unlikely to buy from Merchant A on this transaction and because of the difficulties of breaking shopping habits, any future purchases.

In order to become part of the shopper's consideration, Merchant A must do something that grabs the shopper's attention - e.g., give a deep personalized discount like 80%.  For repeat purchase items like clothing, the aggressive discount can be profitable for Merchant A, since it wins a new customer that would have been otherwise very difficult to gain.   Knowledge of the shopper's historical purchase data ensures that Merchant A does not dilute revenue by offering the deep discount to existing, repeat customers.

2. Jump Ball

Now let's assume that the shopper has a product from Merchant B in his or her Shortlist, as well as items from Merchant B's competitors.  The shopper has also previously bought from Merchant B.

Armed with this knowledge, Merchant B makes a personalized offer that nudges the shopper to select them - e.g., 10% discount.  In this case, the personalized offer does not dilute expected revenue from an existing, repeat customer, but instead invests wisely to increase the likelihood of winning this particular transaction.

Win-Win for Shopper and Marketer

These examples illustrate how Shortlist Marketing can deliver highly targeted and profitable offers for the marketer.  Shortlist Marketing is even more powerful because it is also valuable for the shopper.

For shoppers, merchants are now “speaking to them” about relevant products at the right time.  Because of the targeted and profitable nature of the offers, shoppers have access to unique saving opportunities that were previously non-existent.  These offers also help shoppers find new items they would have never been aware of.

How to Build a Shortlist Marketing Platform

Shortlist Marketing requires three essential capabilities.

• Provide a Shortlist tool
• Build the "Holy Grail" of marketing data
• Optimize marketing offers

Provide a Shortlist Tool

We'll start with the easy part.  A Shortlist tool must be developed which enables shoppers to save items they are considering buying into a central place, so they can further compare and review them.  The underlying technology is not terribly difficult with the web browser plug-in for online shopping and mobile scanning/snapping app for in-store shopping.  A little more effort is required to synchronize these tools to enable full omnichannel but certainly doable.

Build the "Holy Grail" of Marketing Data

A Shortlist tool provides a building block for the "Holy Grail" of data but significant effort is required from there.  The first element is the simplest - "when a consumer is actively shopping for something".  It is triggered when a shopper creates a new Shortlist and the event must be captured.

The data on "what item category the consumer is shopping for" and "what products/brands are in the consumer's consideration set" is obtained from analyzing the contents of a shopper's Shortlist.  Unfortunately, the name of the Shortlist that the shopper chooses is not a sufficient indicator of the Shortlist's contents.  For example, a shopper may call a Shortlist "dresses for me" but it is not specific enough to know whether the contents are day dresses, cocktail dresses, gowns, etc.  Only through sophisticated classification algorithms on the Shortlist contents will that insight be gained.

The online wallet data consisting of "how much has the shopper previously bought in this category" and "who has the shopper previously bought from in this category" is enabled by providing a shopper utility to organize and summarize their purchase receipts.

With the shopper's permission, the shopper's email account is accessed and a classification algorithm identifies a purchase receipt email amongst marketing and personal emails.  Once flagged as a purchase receipt, natural language processing algorithms extract valuable data from the email (e.g., order number, seller, products, costs).  These algorithms gather the raw data at SKU and merchant level to build category level share of wallet.  Although just for purchases with e-receipts (typically an online purchase), the data is more granular than credit card data and agnostic to the form of payment.

Optimize Marketing Offers

The "Holy Grail" of data delivers the fact base to optimize marketing offers.  A combination of a recommendation engine and offer optimization algorithm is required to intelligently prioritize marketing offers to the shopper leveraging this data.  There could be many considerations that go into this algorithm including similarity of alternatives to the Shortlist contents, potential savings to the shopper and potential revenue of the Shortlist Marketing platform.

In the end, although Shortlist tools are relatively simple to enable, Shortlist Marketing requires multiple complicated algorithms working together to deliver this capability.

How to Drive Shopper Engagement with Shortlist Tools

A robust Shortlist tool can help a shopper save time, save money and find new products they love - all free of charge.  As great as this sounds, why isn't every shopper already using Shortlists?  The primary reasons are:

• Lack of awareness
• Hard to form new habits
• Lack of maturity of tools

Lack of Awareness

Word hasn't spread into mainstream consciousness about Shortlist tools. It's a consumer marketing challenge.  However, even with awareness, changing habits and maturity of tools are major barriers to adoption.

Hard to Form New Shopping Habits

People are creatures of habit, no matter the consequences or outcomes.  We've spoken with many individuals who are frustrated with some aspect of shopping, but they admittedly keep doing the same thing without finding a better way.  We hear things like:

• “I want to buy clothes from somewhere different but I don't know where so I just shop my usual places”
• “I'd like a better way to compare items across websites but I don't know how so I keep a tab open for each site I've visited”
• “I think I can save more money but I don't know how so I just go to Amazon and trust they have the best deal”

In fact, medical research has found brain activity is significantly lower when performing habitual tasks versus trying something new.  In other words, people are hard wired to want to keep doing the same thing over and over even if a better alternative is available.

Shortlists hold the promise of solving all of the aforementioned online shopping challenges. The reasons for shoppers to adopt Shortlist tools are compelling, but breaking old habits and forming new ones is difficult.

Lack of Maturity of Shortlist Tools

The core function of a Shortlist tool -- saving and reviewing items in a central place -- provides a great benefit.  However, with additional features, Shortlist tools become a "no brainer" for the shopper to use.  The most valuable features are:

• Tracking prices of items in a Shortlist
• Checking prices of items in a Shortlist against other sites
• Finding coupons for items in a Shortlist
• Recommendations of alternatives
• Personalized offers and savings

A Shortlist tool with all of these services will save money, save time and find great products for the shopper.  Unfortunately, no single tool delivers all of these features today.  Once a tool can, adoption of Shortlists will take off.

Shortlist Marketing Will Help Drive Adoption of Shortlists

The ability to deliver personalized offers and savings in the Shortlist is enabled through Shortlist Marketing.  Access to heavily discounted items, only in the Shortlist tool, will be the disruptive events that will break old habits and form new ones in a way that saving $10 here or 5% off there doesn't.  Once new habits are formed, word of mouth on great deals will take off.

With JiSu's Launch, Shortlist Marketing is Not Just a Concept

JiSu was the first to enable Shortlist Marketing through its recommendation feature in late 2013.  With this feature, JiSu recommends interesting alternatives to their members based on the items they have saved in their JiSu Shortlists.  The recommendations are based on the similarities to the Shortlist contents, savings opportunities for the shopper and sales commission potential for JiSu.

We recognize the JiSu launch does not complete the entire vision of Shortlist Marketing.  A critical component that still remains is building direct merchant relationships to create personalized consumer offers.  As discussed, this missing part will be what drives widespread Shortlist adoption.  However, with this launch, JiSu has built out the most difficult parts of the required capabilities and demonstrated a working proof of concept of the vision.

Final Thoughts

Shortlist Marketing is a game changer in the marketing world.  It's the first marketing solution that is truly a win-win for the shopper and merchant.  For consumers, they will receive highly relevant, personalized offers at a time and place when they want them (i.e., while they are reviewing their Shortlist comparing alternatives).

For merchants, they are now able to construct marketing campaigns that are highly targeted, delivering conversion rates orders of magnitude better than other marketing channels.  Further, because the offers are based on the "Holy Grail" of marketing data, the marketing campaigns will yield significantly better ROI.  A true home run for merchants.

For commerce platforms and marketplaces (e.g., Google, Amazon), Shortlist Marketing will win a consumer's heart and mind as it becomes an extension of the shopper himself/herself.  It captures electronically all the information a shopper has in his/her mind and stored across many places (e.g., email, browser tabs, hand written notes) and gets the best deals for that shopper.  Essentially making their platform/marketplace the home base for shoppers throughout their buying process - search, research, compare, purchase and so on.

Lastly, Shortlist Marketing paves the way for a commerce platform to solve retail omnichannel by seamlessly enabling webrooming and showrooming behaviors while allowing consumers to compare across merchants and retailers and delivering unique, personalized saving opportunities.

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