B2B sellers make customer expansion and converting sales online priorities

The survey shows most B2B sellers believe they have mastered the basics of ecommerce, such as site search and product reviews. But when it comes to personalized commerce, larger companies are more satisfied with their efforts, while many smaller competitors are investing in this area. Two-thirds of B2B sellers say they are successfully driving online conversions with such widely deployed features as:

• Site search
• Promotions
• Product ratings and reviews
• Showing inventory availability

While companies of all sizes generally believe that personalization is working for them, those with more than $500 million in annual revenue report greater success in several areas. Overall, B2B sellers are seeing the greatest return from tailoring site search results, for example by showing buyers only products they are approved to buy and the prices their companies have negotiated.

But several tactics are working far better for larger versus smaller firms, probably reflecting greater investment. These include personalized site search results, customer-specific pricing and targeting promotions to specific customer segments. Smaller companies are responding by putting some personalization features on their to-do lists for 2023. That includes personalized payment and shipping options (15.8% of smaller firms plan to invest versus 3.6% of larger ones) and personalized product category pages (15.8% versus 1.2%).

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“We needed to have a lot more targeted conversations with each consumer throughout their lifetime with Bark. And we needed to do that efficiently,” he says.

Bark started its business in 2012 selling a monthly subscription BarkBox containing two dog toys and two dog treats in each shipment. The dog toy and dog food subscription retailer expanded its product offerings through the years, including offering dental products in 2020.

Ed Walloga, vice president, lifecycle marketing and ecommerce, Bark

To figure out how best to market to consumers to increase upselling and cross selling, Bark turned to Simon Data, a software tool that allowed the retailer to run comparison tests and see how marketing campaigns perform.

Retaining and building up the lifetime value of its customers is important to the subscription retailer.

Data shows 5.6% of retailers in Digital Commerce 360’s Top 1000 retailers used a subscription model in 2022. That’s down from 6.5% in 2021. That percentage differs depending on the category. 36.1% of Top 1000 food and beverage retailers had a subscription model in 2022. That is up from 27.8% a year earlier. 28% of health and beauty retailers had subscriptions in 2022, and 10.1% of specialty retailers like Bark.

During its fiscal fourth quarter 2022, Bark’s average order value increased $2. Upselling and cross selling accounted for the boost, Walloga says.

“And a huge amount of that was the increase in improving [conversion for] dental Bark Bright,” he says. Bark Bright are products like toothpaste and dental chew treats for dog teeth care.

Bark tests marketing emails for Durable Dental Chew products

In January 2023, Bark tested two marketing email campaigns for its Durable Dental Chew product launch, which is part of Bark Bright.

Bark sent the emails to its regular BarkBox subscribers. These subscribers received plush toys with treats as part of their core subscription.

The other type of subscribers are Super Chewers. These subscribers receive more durable toys in addition to treats as part of their core subscription.

The A/B split tests involved “several hundred thousand in each pool, and the A/B test was an even 50/50 split for each pool,” according to the company.

A/B testing, also known as split testing, allows Bark to test a percentage of its subscribers with two email campaigns to see which results in more opens or clicks. Bark can test different images or language and compare which ones consumers responded to more favorably.

The results showed that BarkBox subscribers were more responsive to the standalone announcement. Conversion rate was 16% higher for those BarkBox subscribers.

Meanwhile, Super Chewer subscribers were more responsive to marketing that highlighted the product collection. Conversion rate for these consumers was 30% higher.

“This was a surprising result, but this is why we test these things,” Walloga says.

Bark believes that because Super Chewer is a more specialized product, consumers liked a side-by-side comparison of original and durable products.

Bark subscribers opt in for SMS texts

There are 2 million BarkBox subscribers receiving a box every month, Walloga says. BarkBox sends subscribers products they can add onto each box. That program includes sending push notifications via SMS, he says.

“We’ve got a very aggressive push notification,” Walloga says.

SMS is an opportunity to “have worthwhile conversations with active and engaged customers,” he says. “That’s where you can apply SMS, and it doesn’t feel like a promotional campaign [to the consumer],” he says.

Bark used Simon Data to launch SMS in July 2022. It currently has 175,000 subscribers opted in to receive text messages. The opted-in base is growing by an average of 35% each quarter, according to Bark.

When customers respond to Bark SMS texts, a Bark employee responds, Walloga says.

“Our customer care team can pick up the [SMS] conversation and respond directly,” he says.

SMS subscribers receive a mix of product availability announcements. These include alerts about exclusive treats, toppers and toys they can add to their subscription box before it ships. SMS recipients also receive order status updates like shipment confirmations and account updates. They also receive marketing messages for “seasonal moments” like Cinco de Mayo or celebrating Star Wars on May 4th.

One of the most successful SMS texts reminds subscribers they have 24 hours left to add to the next box, he says.

Also, Bark is working on using its app to engage with consumers.

“We want to test pushing notifications directly to the Bark app,” Walloga says. According to Walloga, “a vast majority of our users are engaging on a mobile phone or the Bark app,” he says.

Bark adjusts email marketing strategy to retain subscribers

Bark subscribers typically commit to six- or 12-month subscription periods, Walloga says. The retailer reviews data to identify which customers are most at risk of leaving, he says.

“We’ve developed [email] outreach to those customers to remind them of the value that they saw as a Bark user,” he says.

This includes noting purchase history and favorites, he says. In addition to a personalized message, the retailer also sometimes includes incentives. This has allowed Bark to keep subscription renewal rates strong, Walloga says.

Email is still at the core of Bark’s digital marketing tools, Walloga says.

“Email is one of the fastest ways to test and iterate, and it gives you a little more real estate to have a conversation with a consumer,” he says. “But by no stretch is it the only channel we use.”

Personalized communications increases loyalty, Walloga says. Some of the tests Bark tried focused on loyalty, reminding customers of the value Bark brings them.

“If you have a very targeted, personalized conversation with the consumer or subscriber, they will respond,” he says.

Bark is No. 174 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales.

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“We needed a global overview of our entire [pool] of consumers and their interaction with the brand,” says Yoed Negri, global director of digital transformation, SodaStream.

Yoed Negri, global director of digital transformation, SodaStream International

Negri says SodaStream understands that its customers interact with the brand through more than one channel: email, SMS text and social media posts. But they weren’t sure how those interactions lead to an increase in conversion, he says.

“We understood that the current marketing infrastructure we had was not enough,” Negri says.

SodaStream’s marketing software provider, Optimove, offers artificial intelligence software. In 2022, SodaStream began using the capability in six markets, which represents about 10% of countries where SodaStream sells its products, Negri says. SodaStream products are sold in store at retail chains like Walmart Inc., Target Inc., and others, as well as online. The retailer sells directly to consumers in 20 markets online.

Test campaigns show how likely consumers are to convert

One way SodaStream engages with SodaStream drinkers is by sending recipes to customers they know like Pepsi-flavorings, diet flavorings and other options based on past orders. The retailer wanted to see how its customers responded to the recipes when received via email, SMS text or through social media posts, Negri says.

The beverage retailer declined to disclose the specific flavors presented, but Negri says the results showed that ads appealed differently to consumers depending on the channel. For example, for email campaigns, SodaStream saw a 3%-5% increase in conversion and 15% increase in average order value.

SMS text conversion rates were 10%-15% higher compared with email depending on the market, Negri says.

For social media posts, Negri says it’s important to note engagement and conversions.

“We see 7%-10% increases in engagement for personalized content and 5%-7% increase in conversions,” he says.

SodaStream conducted the tests over a period of four to eight weeks in late 2022, Negri says. Optimove’s AI software learns how consumers are responding to ads within six to eight weeks, Negri says.

Using AI to anticipate conversion

When deciding which campaigns to propose to which customers, Optimove’s software uses the data it collected to determine the best campaign for each, says Pini Yakuel, CEO of Optimove.

A retailer might decide to send a marketing campaign or a promotion, such as a birthday promotion, via email, SMS or a combination of both methods. Optimove’s AI determines the best combination for each customer base, Yakuel says.

Digital marketers also use Optimove’s analytics for the following:

• The likelihood to convert.
• The likelihood of becoming a top spender.
• The risk of churn (the measure of how many customers stop using a product).
• Likelihood of reactivating (also known as re-engagement, where retailers reach out to people who have previously expressed interest or engaged but have since disengaged with communications).

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Jason Hein

As B2B distributors have moved further into the digital world, they’ve centered their commerce experience primarily around one critical element: product data.

This strategy makes sense, of course. If you’re trying to recreate the physical buying experience in a digital setting, you need a digital equivalent to the physical features buyers use to make choices — and those features must be explicit. In a store, buyers can pick up an item to feel how heavy it is. Online, you need a field called “weight,” and that field needs to be populated with a logical value.

Ecommerce data

So the past few years have seen B2B distributors (and manufacturers, to an extent) highly focused on creating successful customer experiences through clear, complete, consistent and correct product data. They assumed that if their product data were in good shape, then site search, SEO, and the links between products would remain consistent and minimal problems would arise. Over time, though, it became clear this wasn’t the case. Yet simple as it may seem, getting a handle on product data is much more complicated than many companies initially realized.

For one, the product catalog constantly changes. Distributors often bring in new products or push out others — maintaining an accurate view of the product catalog requires hyper-vigilance. It’s also challenging to keep product information consistent as the business grows or evolves. Consider, for example, a company acquisition or movement into a new vertical. Both instances can substantially change the product catalog, and it may take quite some time to understand the implications of those changes. It’s genuinely difficult to stay on top of a product catalog in a digital environment.

Yet many B2B distributors have remained laser-focused on the perfection of product data as their top digital priority. And while it’s true that product data is important, that single-minded focus comes at the expense of the most valuable data source to B2B companies: the behavioral data of customers.

Most online companies already have this ecommerce data source — they just tend to ignore or delete it. But ecommerce data tells a critical story: how the buyer ended up at their purchase — the entire journey, not just its end point.  How customers engage with your product data can offer incredible insights into user intent and process. What terms are they using to search? What products do they look at after searching for a particular term?

A better way to recommend products

For example, complementary products historically have had to be linked to each other manually, either through hard coding in the site design or via a connection/relationship established in the PIM. But this approach requires significant manual labor to keep all product relationships current, and it sometimes makes inaccurate assumptions about buyer needs and use cases.

It’s much easier today to manage recommendations of compatible products by aggregating buyer behavioral data. (E.g., “Customers who bought also bought” or “Customers who viewed also viewed” recommendation widgets.) And distributors can increase the recommendations’ innovation by shifting them depending on the user’s role/persona/industry in addition to the product alone. It’s more of an “actions of the customer” than a “voice of the customer” approach, because what customers actually do is often more accurate than what they say they do.

This composite approach to ecommerce data is critical to building a differentiated customer experience. More importantly, incorporating behavioral data into the experience design is something the vast majority of distributors don’t do now. It represents a path to measurable and genuine innovation.

The positive impact of ecommerce on B2B is undeniable. But businesses cannot grow complacent with where they are today. Digital customers are telling you what they want. They’re showing you how they shop. Embrace and use that customer data to power better digital experiences — the kind that leap ahead of competitors.

About the author

Jason Hein is Principal Strategist for B2B at Bloomreach. Bloomreach provides “commerce experience” products and services designed to help online B2B and retail companies engage their customers. He has spent the past six years consulting for B2B manufacturers and distributors across a range of industry verticals. Prior to consulting, Jason spent five years at Amazon.com launching what is now Amazon Business. Before Amazon, he worked in merchandising for industrial distributor McMaster-Carr. He managed product presentation and differentiation across a wide range of B2B product categories.

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Klaus Werner, senior vice president and chief marketing officer, Global Industrial Co.

Ecommerce accounts for more than 50% of all sales transactions at Global Industrial Co., a maintenance, repair and operations (MRO) distributor  with more than $1 billion in annual sales. Here, senior vice president and chief marketing officer Klaus Werner provides insights about digital expansion and personalizing the online purchasing experience.

Werner will speak during the June 20 “Build Customer Loyalty” panel and workshop session and give a featured presentation June 21 on “Driving B2B Success With a B2C Twist” at the EnvisionB2B 2023 Conference & Exhibition in Chicago.

DC 360: What is driving B2B companies like Global Industrial to expand online?

Werner: The increase in B2B ecommerce continues to reflect changes in the market and customer digital trends. Ecommerce remains a strong and growing component of the B2B market. Global Industrial has a long history of ecommerce leadership and a dedicated one-to-one sales team. This combination provides a very compelling and value-additive omnichannel experience to our customers.

DC 360: What are your biggest internal or and external barriers?

Werner: Businesses have faced some challenging external forces the past couple of years, from economic headwinds to inflation and supply chain disruptions. Global Industrial’s ability to navigate these challenges and deliver operational excellence has made it a stronger and more flexible organization. Internally, our daily focus is on delivering an exceptional customer experience and driving continuous innovation. These are the keys to long-term success and allow you to stay ahead of the competition.

DC 360: What are the chief gains you’re realizing?

Werner: We are delivering a fully integrated brand marketing campaign that is enhancing awareness of Global Industrial across industries and activating our “We Can Supply That” tagline with customers. This is allowing us to provide customers with the right solutions to help them address challenges and be successful. We believe this positions us to capture market share through customer acquisition and retention while deepening existing relationships.

DC 360: What is the most valuable piece of advice you have on how to launch online B2B sales or increase them?

Werner: Put the customer at the center of everything you do. Be an excellent listener and execute flawlessly.

DC 360: Looking back over the past few years, is there anything you wish you had done differently in ecommerce?

Werner: I wish we were quicker in driving a personalized ecommerce experience. In our one-to-one sales organization, personal touch comes through a direct relationship, but in a digital world that connection can be lost. The innovative new digital platform we launched last year, which includes enhanced personalization and resources to shop by your industry, significantly strengthens our capabilities. It’s an area where we will continue to be a leader and look forward to bringing further innovation.

DC 360: What excites you the most in new digital commerce technology?

Werner: ChatGPT—it accelerates product descriptions; it will completely transform customer service, and the opportunities are endless.

DC 360: Going forward, what do you see as the most significant commerce challenges and opportunities? 

Werner: Challenge: Driving continuous innovation throughout the organization and continuing to differentiate our brand, products, and value in the market. Opportunity: Enhance Global Industrial’s brand recognition and the market’s understanding of the wealth of services and products we provide. Continuing to grow the customer base, expand our Global Industrial Exclusive Brands product line, and deliver an innovative and personalized ecommerce experience.

Jim Daly is a Mount Prospect, Illinois-based freelance journalist covering business and technology.   

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Notably, only 14% of online shoppers mentioned finding limited promotions. One in four shoppers had general economic concerns. Of course, free shipping remained a draw for 35% of respondents. Retailers continue to grapple with how best to profitably extend this benefit.

Personal circumstances may be playing an oversized role now more than ever, especially finances. Some of those who gave “other” as an answer included limited money or not being interested in buying unnecessary items.

Other inhibitors included inventory, with 25% citing out-of-stock products, and slower deliveries for 21%. Both were factors throughout 2022 and may continue to challenge retailers into 2023.

Fundamentals are most likely to drive conversion

We asked what website features or attributes should be in place to drive conversion, and we are compelled to start with money-oriented conditions. Topping the list were free shipping (69%) and the right price (66%). We all know promotions beyond free shipping can tempt online shoppers, and that was a factor for 36% of survey respondents. 13% cited the ability to finance orders, paying in installments. Depending on economic factors, that could grow in importance.

Product

Product rules, and that starts with product selection at 47%. Close behind (45%) is having that product available when you decide to buy. Shoppers seek information to make the best decisions for themselves. That includes the right quality and quantity of product reviews for 39%, along with ample product information and imagery for 28%. 13% noted videos, including product demonstrations. The preference for video tends to be category-driven.

Trust

Trust in the brand is central to conversion and, while a given, its high 46% penetration coupled with a prior purchase or subscription by 43% also are central to buying. When shoppers become members of loyalty programs, this also speaks to a greater likelihood to convert for 28%. Though smaller in number, the support of causes from social to political was noted by 12% of respondents. We will likely see incremental growth in the coming years.

User experience

The overall user experience is core to conversion, as 40% noted. Shoppers embrace speed. A fast checkout was a must for 32% and a fast-loading site for 21%. Finding what you need is critical to a successful shopping experience as 24% cited site search that returns relevant results. Shoppers often need more information, and that’s when easy access to on-site customer service can be invaluable, suggested by 21%. Online shoppers (19%) now want the ability to contact customer service in multiple ways, including text and social. This is likely greater for younger consumers. Personalized experiences based on behavior were also integral to driving conversion for 11%, while interactive tools (at 9%) saw limited value.

Fast shipping, free return shipping top list of initiatives that drive conversion

Online shoppers expect fast shipping (61%) and desire guaranteed delivery times (39%), and both impact conversion. Shoppers have long memories, and past experiences with retailers are important, as 45% of survey respondents shared. To drive conversion, the quality of customer interactions count toward subsequent conversion (24%), as do interactions with customer service reps (16%) and virtual appointments (8%).

When it comes to returns, shopper preference is:

• Free return shipping (55%)
• A straightforward/easy return policy (42%)
• Physical store return options either beyond the retailer (36%) or via the retailer’s store (32%)

Online shoppers can also be enticed with a promotional email, particularly when it speaks to an abandoned product (17%). Conveniences include a quality mobile app option (18%) and easy reorder functionality (21%). Both intend to save shoppers time.

A look at advertising finds that two in three online shoppers don’t care where they see an online ad when making a purchase.

What they do care about is the location. Digging into locations that resonate with shoppers that lead them to click and ultimately make a purchase, can help retailers prioritize how they spend their marketing budget. Facebook is the powerhouse in terms of converting orders, with Instagram and Amazon also effective.

Social media stacks up as follows:

• Facebook: 36%
• Instagram: 26%
• YouTube: 22%
• TikTok: 14%
• Twitter: 12%
• Pinterest: 6%
• Social media ad that features products of interest: 4%
• Influencer on any platform: 3%
• LinkedIn: 2%

General advertising success begins with Amazon, including sponsored ads for 26%. The next significant location is far behind, with display ads on websites at 5%. Email still captures shopper attention and drives conversion, though the promotions offered matter. Those with an offer find traction among 22%, while emails with new items and/or trends but no offer only resonate among 8% of those surveyed. TV advertising remains relevant with 18%. SMS/text messaging will be one to watch as well, though today it only has 4% penetration.

Shopping carts play into conversion in different ways

Shopping carts serve many purposes for shoppers where the intention to buy may not be immediate. That might include wanting to save a cart for later (32%) or getting distracted and forgetting (17%). The cart is a holding pen for 19% who added items to the cart to compare prices (19%).

Alternatively, cart abandonment is money-related. 35% of shoppers indicate they will abandon if shipping costs make the total cost of the order more than expected. Along the same lines, 29% will do so if they don’t qualify for free shipping. Unexpected additional expenses (tax, white glove, delivery) are a factor for 18%. Of course the same percentage abandoned carts when the site would not accept their coupon code.

The out-of-stock factor drives abandonment as well for 22% of participants. Delivery is less of a concern, but when it did not meet shoppers’ needs (18%) or there was no guaranteed delivery date, 12% left their carts behind.

From a convenience standpoint, 15% decided to purchase at the store and 8% simply didn’t trust the seller.

The user experience of the cart — including speed, errors, transparency to payment choice and polices — also can lead to cart abandonment. Though not as significant as many of the other issues, it’s still instructive to be aware of the following:

• Preferred pay option not available: 15%
• Checkout page returned an error/glitched: 12%
• Checkout process too long: 10%
• Loaded too slowly: 9%
• Return policy was not clear: 8%
• Financing was not available: 8%
• Would not accept gift cards: 8%
• Could not remember username/password: 6%

81% of surveyed shoppers had an online customer service interaction

Sometimes information is not forthcoming or a shopper has a question that they need answered to make an educated purchase decision. Retailers must offer an array of communication touchpoints, though not all deliver the same conversion rates. Topping the list of customer service interactions that drive conversion are email (40%) and live chat (human) interactions (37%), while their bot counterparts are quite a bit lower at 14%. Phone calls came in at 26% and close behind was text at 21%. Interestingly, interaction via social media was low at 12%, though likely to grow and be more important for certain audiences. Appointments/store-related options have seen a lot of variances over the past few years.

Their likelihood to convert was as follows:

• In-store interaction: 18%
• Virtual appointment: 10%
• In-store appointment with associate: 6%

Mobile accounted for 41.6% of online shopping in 2022, according to eMarketer, suggesting that much is working well. But not all shoppers wish to complete their shopping on a smartphone, so abandonment rates shown may not factor in this dynamic. Sometimes retailers don’t have an optimized mobile app, and 17% faced that. It’s also important to remember that some folks simply don’t own or choose to use a smartphone to shop, according to 5%.

Mobile phone users require efficient shopping experiences that take into account the unique user experience (UX) needs of the device. Saving time has always been important to the shopper, and 28% indicated they can get their shopping done easier and faster on the desktop, keeping them from going mobile. From a usability standpoint, there are numerous challenges including being hard to go back and forth when comparing products (26%), too much scrolling (25%), slow load times (24%) or too many steps (17%). And when questions arose, not being able to quickly find a retailer’s phone number was in play for 10%.

From a UX point of view, there is plenty to be concerned about. 20% cited cumbersome navigation, while adding a promotion code or redeeming points was difficult. Often, imagery does not render well or is too small (18%), or there is a difficult checkout (17%). Mobile design can be challenging and information shown is poorly laid out for 17%, or that content does not appear properly (15%). Lastly, the navigational button size might not work as was the case for 10% of those surveyed.

When it comes to personalization, search results and the homepage are star performers

Personalizing the site experience should be a priority given its potential to drive conversion. Locations where personalization converts best include personalized search results (32%), the homepage presentation (28%) and the welcome message (16%).

The product page is an important decision-making location, and recommendations based on prior buying (24%) and browsing behavior (22%) can be productive as well. The shopping cart appears to have a less significant role where recommendations based on prior browsing (17%) and buying behavior (15%) are less likely to convert.

Cart abandonment emails should be activated given their ability to remind shoppers of past browsing. They resonate with 20% of respondents, while post-order emails based on prior behavior see traction among 11% of those surveyed.

It is important to note that some online shoppers have no interest (22%) or don’t like personalization (12%), which retailers should consider.

Product availability and conveniences drive omnichannel purchasing

In order to place an order for store pickup, the product must be in stock. It tops the list at 47%, followed closely by the shopper’s proximity to the store location (43%). The type of pickup location was a purchase driver for only 20%, while the number of designated parking spaces was even less important to 12%.

Incentivizing shoppers to use the store to pick up orders is seen as favorable to making a purchase. Money talks, and 42% of shoppers appreciate the discounts extended for shopping in this channel.

The retailer’s ability to quickly turn around orders is critical. 41% cited the time when one’s order can be ready for pickup while the number of stores that had inventory resonated with 25%. Communication capabilities with the retailer are important. 19% appreciated the option to notify the store that you’re on your way, while 12% cited geolocation technology that detects you are close.

We have already spoken about positive experiences with retailers, and it similarly resonates with omnichannel shoppers as 30% highlighted it, while 16% mentioned the sophistication of the retailer’s app.

Retailers have work to do to ensure conversion rates remain strong

While retailers can’t control the economy and the high prices from inflation, they know it requires diligence to achieve high conversion rates with optimized shopping from the desktop to mobile devices. Retailers must be cognizant of price and should monitor fundamentals including products, stock and delivery. With those well executed, shoppers will continue to expect the process to be fast from the user experience through delivery time. And free is always a welcome shopper favorite. It’s a job that never ends, but the dividends pay off.

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By the end of November, the web-only merchant that specializes in personalized gifts is operating at its peak to create 40,000 personalized ornaments and tens of thousands of other personalized stockings, blankets, mugs, cutting boards, champagne flutes and other gifts per day.

Personalization Mall’s 365,000-square-foot facility in Bolingbrook, Ill.

November and December bring in roughly 35-40% of all Personalization Mall’s annual revenue, says Dan Grebel, vice president of operations at PersonalizationMall.com. The rest of the year, the facility has a 10th of the employees — 400 — who can handle the production volume during the 10-month offseason.

Personalization Mall’s history and business model

Personalization Mall launched in 1998 as an online “mall” where consumers could choose from 20 different items to personalize. Today, the brand offers 2,000 unique “blank items” that shoppers can have personalized with one of 14 different methods, such as laser engraving, embroidery, glass printing, 3D printing, sandblasting and others, plus variations within each method. In total, the merchant now offers 40,000 different product designs, with new designs created each year.

New for this year is an agreement with The Elf on The Shelf. Shoppers can personalize apparel for their elves or purchase personalized items with the The Elf on the Shelf image on it.

Vice president of operations Dan Grebel provides a media tour of Personalization Mall’s production facility.

Bed Bath & Beyond acquired Personalization Mall in 2016 for $190 million. In 2020, the web-only merchant again changed hands and 1-800-Flowers.com (No. 53 in the Digital Commerce 360’s Top 1000 database) bought Personalization Mall for $252 million from Bed Bath & Beyond Inc. (No. 31).

1-800-Flowers.com Inc. owns 17 gifting brands, including Harry & David and Cheryl’s Cookies. The Personalization Mall logo and link to its site is included in the banner of brands that runs across each of these merchants’ websites. The parent company is still working on integrating Personalization Mall’s items into its other brands, such as offering a personalized Easter basket with Harry & David goodies instead.

Personalization Mall’s Bolingbrook, Illinois, facility opened in 2019. It includes a second 100,000-square-foot building for administration and warehousing, giving the online retailer 465,000 square feet of space. This is an 86% increase from its previous facilities that totaled 250,000 square feet.

During a media tour, the merchant showcased its facility as it geared up for Black Friday and the 2022 holiday season, and the process a product goes through from purchase to creation to shipping.

How a blank item becomes personalized at Personalization Mall

After a shopper clicks buy on PersonalizationMall.com, that item is placed in a queue for employees to pick at the warehouse. The warehouse runs four major waves of picks a day, in which employees select all the blank products for the most recent orders. It takes about two hours to pick the roughly 40,000 products in each wave, Grebel says. About 10% of orders during the holiday season have some level of rush shipping, Grebel says. Those orders are picked in smaller waves throughout the day to ensure they are shipping to the customer on time.

Personalization Mall’s warehouse is filled with blank items, which are then picked to be personalized in its attached facility.

Once the items are picked, employees bring them to various areas where they are personalized. Some items, like a name on a stocking, can be personalized right away in the embroidery area. On a screen, the employee can see exactly what the customer saw on her computer screen when she approved the order. When the shopper designed the order on her own computer, she was interacting directly with the software that the machines use, Grebel says. This means the employee doesn’t have to reenter any information, as the software already knows the letters it needs.

The associate then lines up the stocking underneath the machine and hits Enter. The machine gives an estimate of how long the embroidery will take, typically four to six minutes for a stocking, and then goes to work.

Each associate is manning three machines at a time — typically two smaller items, like stockings, and a more time-intensive item, such as a skirt for a Christmas tree, which could take 17 minutes. Each employee typically can embroider 12 to 13 items per hour, Grebel says.

Other items are more complex, such as certain ornaments and personalized blankets that require a two-step process with a heat transfer. About 50% of Personalization Mall’s products require a heat transfer, which is when the image the customer selected is first printed and then transferred onto the item using heat.

Personalization Mall has about 40 printers for this process, all housed in a pressurized part of the facility with temperate and humidity control. Those printers continuously spit out images that are applied to the final product within hours.

Quality assurance for each item is paramount at PersonalizationMall.com

Upon creating an item, employees attach a barcode to it and send the product to quality assurance. Employees scan each item, and an employee compares the final product against the proof image the customer approved on its website to ensure it matches.

“When we’re producing items, we understand that peoples’ expectations with gifting in general is usually a little higher than their own standards because they want to wow their recipient,” says Jeff Chun, vice president of marketing at PersonalizationMall.com.

Not only is the employee checking to make sure the personalization is correct, but also that the presentation looks good and the product is suitable to give as a gift. For example, Personalization Mall will remake an item if it is slightly off center or the product is even slightly damaged, Chun says.

“We view it as much healthier as a business to absorb that and just make a new product that will wow them, than to send something that’s subpar to our customers because long-term, we want those customers to come back, and so we want to present them with the best possible option,” he says.

Repeat orders are a key part of its business, representing roughly 50% of sales, Chun says.

Personalization Mall’s 4,000 employees produce 150,000 items per day during the holiday season.

Associates ship completed items within one to two days. In total, it takes about five business days for the product to be created and then landed on the shopper’s door.

If, for some reason, a product is damaged during transit, the merchant will remake the product.

Because each product is unique to each shopper, customer service is an important part of PersonalizationMall.com. The merchant employs 40 agents year-round, and that swells to about 100 agents during the holiday season. During the holiday season, call volume can be about 400% higher than during the summer.

These agents work in the production facility, so they can walk over to where that consumer’s product is if needed to resolve an issue, Chun says. Shoppers call with questions before, during and after placing an order.

Customer service agents require more training compared with seasonal warehouse workers, Chun says. And so Personalization Mall hires agents in the summer to start training for the holiday season, whereas it onboards the bulk of its seasonal workers in November.

Chun says finding labor has not been an issue for the retailer this year, unlike in 2021, when it was harder to attract good-quality candidates, he says.

2022 holiday season goals for Personalization Mall

With surging sales during 2020 and 2021, Personalization Mall is looking to match 2021’s holiday sales figures for the 2022 season, Chun says.

“The last two years have been exceptional for us,” Chun says. “We’ve had record demand and we’re seeing good engagement with the consumer right now. Our expectation is to be on par with last year.”

PersonalizationMall.com’s online sales grew more than 50% in its 2021 fiscal second quarter ended Dec. 27, 2020, which includes holiday sales during the first year of the pandemic. Plus, it grew sales 4% in its 2022 fiscal second quarter ended Dec. 26, 2021.

Chun says even though the 2022 shopper is dealing with inflation and is being more careful with dollars, the retailer still expects a strong holiday season.

“Even when the customer is a little bit more selective with how they are spending their dollar, personalization is a way where you don’t have to spend a lot to say a lot,” Chun says.

Overall, Chun predicts the sales pattern of the holiday season will look more like pre-pandemic 2019, unlike 2020 and 2021, when shoppers started purchasing much earlier in the season to ensure they could find the items they wanted at a time when supply chain issues prevented retailers from getting all the merchandise they ordered.

While some retailers started promoting the holidays before Halloween, and many released promotions and marketing materials during Amazon’s Early Access Sale Oct. 12-13, Personalization Mall did not see any impact or notable pull forward of holiday sales because of this event, Chun says.

How Personalization Mall views Amazon and its competitors

Plus, as a maker of personalized goods, Personalization Mall is one of the few merchants that doesn’t count the web’s largest merchant — Amazon.com Inc. — as a direct competitor, Chun says.

“Fortunately, personalization is a very specialized industry and so a lot of the big retailers can’t do it and they don’t want to, necessarily, and that’s where our expertise is. That’s where our strengths lie and it’s given us an advantage that we’ve been able to stand out among some of these well-known retailers,” Chun says.

Amazon has not done personalization on a major scale that the retailer is aware of, Chun says.

“We’ve been fortunate to be somewhat insulated from that effect,” he says. “It’s a great boon for the consumer to have a lot of choice in digital shopping, but for retailers, it puts pressure on the retailer for how they can differentiate themselves. But being in personalization, we’ve stood out.”

The retailer does, however, have a number of online competitors that also offer personalized products. They include Shutterfly Inc. and Walgreen Co., which offers personalized stationery and home décor products. Chun says Personalization Mall stands out from them with its large assortment and 14 different ways to personalize products.

Within the Digital Commerce 360 rankings of top online retailers, 260 merchants offer product customization in some way, such as engravings on jewelry, a specific color combination on sneakers or tailored specifications on furniture. But, when looking at retailers that specialized in this area, only six Top 1000 retailers are in the custom merchandise subcategory and only five retailers are in the greeting card category that also offer a number personalized products.

These 11 merchants lag behind the larger Top 1000 merchants, with a collective five-year compound annual growth rate of 8.9% compared with 22.4% for the larger Top 1000. But for 2022, Digital Commerce 360 projects this group to grow 11.5% year over year compared with a projected collective growth of the Top 1000 at 4.2% year over year.

The final few weeks of year are paramount for Personalization Mall. Cyber Monday is the merchant’s top day but its facility will continue to operate all day and night until the final few days of the season.

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Justin Racine

There’s no doubt you’ve heard the whispers, the murmurs, the rumors — headless commerce is a buzzworthy topic among business and technology professionals alike. The promise of agility and flexibility by leveraging multiple APIs to extend commerce experiences in a way that’s intuitive for technology teams to deliver.

But is it really that easy? Is this a strategy that you should consider? And, most important – does this headless approach make sense within your B2B vision?

In short – yes, but with many, many caveats.

First, let’s discuss some key points of what headless commerce actually is, and what it isn’t.

Headless commerce is a way to de-couple the front-end presentation layers (and other components) of your ecommerce experience to leverage the best-in-class content management system (CMS), site search, shopping cart, personalization, etc.

Headless commerce is not an end all cure-all to pain that you may be having in your business today.

Headless commerce is a great approach to keep up with the ever-changing customer experience expectations by creating paths to agility and customizations that create personalized purchasing experiences.

Headless commerce is not something that will likely deliver business value quickly to your organization. Moving down a headless strategic approach requires investment, time, and, most importantly, employees familiar with working in this type of development approach (especially IT professionals).

So, what should you do? Should you make this extensive investment in a new architecture and development approach? Should you stay within the traditional “platform” model?

The right answer to these questions really depends on the maturity of your organization and, moreover, where you’re looking to take it strategically. In that spirit, here are three areas to consider if you’re contemplating leveraging headless commerce within your B2B organization.

1-Investment, Time, and Employees

The investment and time needed to move to this type of headless framework will be extensive. So, when contemplating if you should walk this path or not, try to think about issues around your current existing platform. Is it stable enough to last through the time needed to move to headless? If your technology team focuses on developing a new headless approach, will your customers complain if you aren’t building new extensions or features they desire on your current platform? It’s essential to be transparent with your customers here, and you may be able to leverage this change as an opportunity to “sell” your future vision.

But in this early stage of considering headless,  your employees may be even more critical than your customers to your plans. Moving to this framework will no doubt require employee training and new ways of working. In fact, you may even need to hire new team members to support the headless approach. This will be a massive change for your IT organization and how it operates. Having employees onboard and comfortable with this technology approach will be essential for success.

2-Market Needs and Expectations

The buzz around topics like headless commerce always creates a vacuum of interest from folks. But you need to assess your current B2B market and your customers’ needs and expectations before going down the headless path – if you catch my drift, there’s no point using an elephant gun for an ant hole. If your business is still maturing or your customers don’t require massive levels of personalization, deploying headless technology just doesn’t make sense currently.

The return on your investment won’t be large enough to justify the need. However, if you have complex products, with longer buying journeys and customers who are used to purchasing your products through exceptional experiences, it may make sense to move to headless. Even more so, if you aspire to build DTC (direct-to-customer) streams as part of your future business strategic approach, it makes even more sense to assess headless commerce as a viable option.

3-Business Commitment

The investment in headless commerce isn’t just monetary, it hits the business as well. Many business teams struggle to gain tangible value quickly from headless buildouts – after all, it does take time to build and leverage this framework. There needs to be commitment and transparency from business team members that moving down a headless path will take time. The good news is that you should still be able to use the existing platform before the headless framework is completed, but the business teams may have to wait on new feature developments in some areas while this new framework is built out.

B2B organizations looking to move down this headless path is nowhere near as common as B2C brands. That being said, it doesn’t mean it can’t and won’t work for your business. The secret sauce here is really focusing on your customer needs. Who are the businesses buying from you? What experiences do they desire? Is your current platform supporting these expectations? Where is your business looking to go?

Answering these questions will help determine the path you should take. Stay tuned for my next Digital Commerce 360 article where I will discuss some specific B2B headless features that will change your business and customer experience for the better, forever.

Until then, remember what “The Office” character Dwight Schrute once said: “I’m ready to face any challenge that might be foolish enough to face me.” To be sure, headless commerce is daunting and hard to harness, but you and the business you run can make it work if it suits your growth plans. Don’t run from challenge — face it, embrace it, and use it to define your B2B brand’s future.

Justin Racine is director, commerce strategy, at Perficient, a digital technology and services agency focused on digital transformation. He is a former director of ecommerce and marketing at distributor Geriatric Medical and Surgical Supply Inc. Follow him on LinkedIn.

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John Strawn, chief marketing officer, Kele

And it’s gotten more difficult during the pandemic, when supply chain disruptions mean some products inevitably will be out of stock at any time, says John Strawn, Kele’s chief marketing officer.

What’s more, increasingly Kele must make the right recommendations to customers it’s never spoken with, potential buyers who are visiting Kele.com rather than calling a sales rep.

“The shift to digital is prominent,” Strawn says. “While the phone channel has remained consistent, all the major growth has been in the web channel.” He says ecommerce sales grew 30% from 2020 to 2021 and are up another 60% this year.

Kele expects revenue to exceed $250 million this year, with 55% coming from self-service electronic channels. Of that, 75% comes from Kele.com and the rest from custom integrations with large customers’ internal ordering systems that allow buyers to punch out to Kele.com or transmit orders via EDI.

To sustain growth, Kele is building an automated system designed to make the best recommendation to a customer instantly, whether that buyer is on Kele.com, the distributor’s ecommerce site, looking at email or on the phone with a sales representative. To do that, Kele is enriching its customer data, marrying that data with product information and inventory status, and layering on artificial intelligence capabilities that can make automated recommendations.

proof-of-concept in recent months has produced conversion rates ranging from 40-60% for AI-driven recommendations based on customer behavior data. With that success in hand, Strawn says, Kele is preparing to embark on a larger project that will draw in additional customer data along with information about previous transactions and interactions on the phone and via live chat, email and text.

The aim is to provide even more personalized content by identifying unknown visitors and creating a rich customer file for all customers and prospects. “What we’re doing is to not just turning unknowns to knowns, but turning legacy knowns to really known customers.”

B2B personalization is more complex than B2C

Among the data that Kele plans to incorporate into the expanded customer file is information about the role of the buying group the visitor is part of and that individual’s role within that group.

“They could be a building automation controls contractor on a site trying to estimate a project or looking for the right part,” Strawn says. “Or it may be a project administrator who places the order. It’s a little different experience. One is more informative and one more transactional.”

Understanding the specific role of the website visitor is more important in B2B ecommerce, where many people may be involved in a buying decision, than in B2C, where typically consumers make their selections on their own.

Jessie Johnson, principal analyst, Forrester Research

In B2B ecommerce, “the optimized customer experience isn’t just personal — it’s contextual,” says Jessie Johnson, a principal analyst at Forrester Research Inc. who specializes in digital interactions with customers. “In B2B, that context comes from the added complexity of the decision-making process, where that individual on the website is actually playing a role inside a buying group with members that need to move together through the customer lifecycle, from discovery and evaluation to purchase, renewal, and even advocacy.”

“In addition to product interest, companies like Kele need to know or infer—in the moment—whether that website visitor is an engineer or architect, or contractor or supplier to better understand that individual’s role in the buying group, their information requirements, and when they’re most likely to be engaged.”

Identifying the website visitor is the first step

Kele, which was acquired by investment firm The Stephens Group LLC in 2020, aims to achieve that level of sophistication. But first it had to find a way to track website visitors who do not identify themselves and have not purchased before or created accounts.

Before starting this project early this year, Kele could not identify 80% of the visitors to its website, Strawn says. He says the distributor was already personalizing content for the 20% it could identify, segmenting them into 866 distinct buckets. But it was unable to tailor content for the four in five visitors it did not recognize.

To remedy that, Kele.com began assigning a unique identifier to each unrecognized user, and building what it calls a “customer contact card” for that individual. That’s a file that tracks what the individual searches for and clicks on, how long they spend on the site, how frequently they visit, the product categories and manufacturers that interest them, and more.

If a person registers for an account or purchases, the system captures their name, email address and company. Strawn says the site also pops up offers designed to capture email addresses. That can help Kele identify the company the visitor works for and in some cases identify the individual based on in-house customer information or data from outside sources. All that information goes into the individual’s contact file.

Knowing the branch of a large company where the customer works also helps Kele customize site content and recommendations. One branch may specialize in providing control systems for hospitals,  another for data centers and a third for service industries. Knowing the branch’s specialty enables Kele to fine-tune what it shows each customer.

Identifying the visitor’s sales region also enables the system to add in the name of the Kele salesperson who handles that account, giving that rep more information about the customer. Plus, identifying a visitor’s location can immediately enable Kele to market across channels its promise to deliver within two days to 74% of the U.S.

AI-driven recommendations boost conversion rates

In the testing phase this year, Kele has stored those customer files within Salesforce Personalization (formerly called Interaction Studio) from Salesforce Inc., whose software Kele also uses for customer relationship management and other applications. It’s also added into that software product information, such as which items often are purchased together, and which ones may be delayed by supply chain issues.

As an example, Strawn says, “most of our customers are working a job and need parts fast despite the global supply challenge, so when they view an out-of-stock SKU, we fly a placement that shows an in-stock alternative that can get to them in two days or less.”

The personalization system also makes up-sell and cross-sell recommendations based on the product being purchased, and these recommendations are producing conversion rates well above the strong 4.25% average for Kele.com. When the system recommends additional products typically required with the purchased item, the conversion rate is 62%, and it’s 42% for related products, Strawn says.

The role of a customer data platform in B2B ecommerce

That success has convinced Kele to move forward with a more ambitious project that will allow it to incorporate more information about each customer and to provide recommendations to sales reps and anyone else who interacts with that individual.

Kele is currently with vendors of customer data platform software that would house first-, second-, and third-party customer information that can be paired with cross-channel intent signals. Kele will use this CDP to recommend the best product or action for the customer to take next, based on the channel they’re interacting with. Strawn says he plans to have the new application up and running by the second quarter of 2023.

Where the customer files in Salesforce Personalization store about 100 attributes of each individual, the CDP will be far more robust, enabling Kele to collect considerably more data points about each individual, Strawn says.

It will also enable Kele to collect information about recent interactions, such as if a customer raised an issue with a delivery in a recent phone call or on-site live chat. In that case, Strawn says, a scheduled marketing email may be replaced with one that offers the customer help in resolving the current problem.

Once the personalization system is operational for the building-automation side of Kele, Strawn says it will be extended to industrial control systems. In recent years, Kele has made two acquisitions of companies that provide industrial controls.

Enabling sales reps to help customers more effectively

The overall aim, Strawn says, is to help customers find just what they need as quickly as possible. One way Kele plans to do that is to add a click-to-call button to Kele.com so that a customer struggling to find something can be immediately connected to their Kele sales rep, who will have access to the customer’s data and be able to see where the person is on the website.

“We’re looking at more real-time integration with our phone system so the customer can click to call, and the rep can see where they are in the session while the AI and machine learning spits out recommendations,” he says. “The rep can lead with that, as opposed to spending five minutes figuring out where they’re at and what the problem is.”

The goal, Strawn says, is to enable Kele’s sales reps to provide a more real-time, relevant recommendation to the customer, no matter what channel they start and finish in.

“This is about creating a customer-centric experience that is highly personalized based on all the data we have available to us and passing the next best action or offer into whatever channel the customer prefers to use,” Strawn says.

“That could be Kele.com, so we will surface personalized recommendations at key points in their shopping experience. It could be calling into our sales team, so we will pass that data to the sales rep so they can have an informed conversation with the customer and get them what they want faster, or it could be an email if they abandon the shopping experience in order to pull them back into the funnel.”

Business buyers increasingly expect such intelligent recommendations and digital content tailored to their interests, says Forrester’s Johnson.

“From their experiences as consumers, B2B buyers and customers are already accustomed to receiving relevant content and product recommendations curated by algorithms and delivered at the right time and in their preferred channels and formats,” she says. “B2B organizations are finding new ways to leverage AI and automation to better understand, engage, and enable their buyers through more personalized and connected interactions.”

Kele already is seeing the benefits of its personalization efforts in higher conversion rates. And it hopes to see even better results across more channels as it builds a system with more data about its interactions with customers and prospects.

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Niels Stenfeldt, CEO, inriver

Niels Stenfeldt, a former CEO of data management company Stibo Systems, took over as inriver’s CEO on Sept. 1, succeeding Thomas Zanzinger.

“An experienced chief executive with deep domain and industry expertise in product data technologies, Stenfeldt will lead inriver in its next phase of global growth and capture the significant market opportunity for the PIM industry as a whole,” inriver said in announcing Stenfeldt’s appointment.

A surging PIM market

Inriver serves more than 700 customers involved in B2B and retail digital commerce, including cable manufacturer Prysmian Group and consumer brand New Balance. The global market for PIM software will nearly double to $23.8 billion from $12.2 billion in 2022, according to a forecast by research firm MarketandMarkets Inc.

In an interview, Stenfeldt said he sees growth ahead for inriver as it helps manufacturers and other businesses manage product information across complex global markets and analyze how targeted customers are responding to that content and generating revenue.

Companies “need to be able to articulate what their product is all about” as they push product data through different channels and as the amount of product attributes continues to grow through customization, he said. “As you enrich your product with more customization … you need to create a digital twin of that manufactured product.”

He adds that selling through multiple channels also requires companies to accommodate data formats that can vary among channels.

“You need to be able to watch the content out in the right channel with the right format with the right story,” he said.

Managing data across complex supply chains

Moreover, he said, as new industries emerge with complex supply chains — such as electric vehicles and other “environmentally friendly” products, which will come with new standardized data taxonomies — PIM technology will play a crucial role in ensuring that accurate data useful for commerce extends through supply chains.

Stenfeldt is taking the top job at inriver shortly after the company secured a capital investment valued at about $400 million from private equity firm Thomas H. Lee Partners, or THL. Inriver says it will use those funds to continue developing its PIM products and expand its market presence in North America and Europe.

Early last year, inriver acquired Detail Online, a provider of technology designed to help companies distribute online content that fosters commerce, and incorporated it into inriver’s software suite.

Stenfeldt declined to comment on any additional acquisitions that might be in inriver’s future, but added: “Generally, I would say I’m always looking at how I can increase my technology footprint.”

“Niels brings valuable understanding of customer needs and go-to-market strategies, and I have the highest confidence that he will help drive the company to new levels of success, accelerating growth globally while continuing to provide excellent software and services to our customers and external partners,” says Zanzinger, who remains as a senior advisor to inriver and its boards of directors.

Stenfeldt most recently was CEO of Stibo Systems, a provider of master data management technology to the global market. Prior to Stibo, Stenfeldt led a global growth strategy as the head of worldwide sales and services for Esko, a provider of software for designing commercial packaging and marketing content. He has also been an executive at business software companies including Oracle Corp., SAP SE, OpenText, and Evenex. (Evenex has since been acquired by HighJump Software, which is now part of supply chain software company Korber AG.) Stenfeldt currently serves as chairman of the board of directors for Boyum IT Solutions and has been a member of inriver’s board since July.

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