REES46 Progressive Personalization Whitepaper

Progressive
Personalization
in eCommerce
WHITEPAPER
2017
Table of Contents
Progressive Personalization in eCommerce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Big Data Not for Everyone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Big Data Can Be Wrong. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
A Poor Substitution 1:1 Personalization.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Progressive Personalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Progressive Personalization in Apparel & Accessories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Progressive Personalization in Cosmetics & Beauty.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Progressive Personalization in Baby & Children Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Progressive Personalization in Pet Products.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Progressive Personalization in Home Appliances & Consumer Electronics 54
Progressive Personalization in FMCG (Fast-Moving Consumer Goods). . . . . . . . . . . 64
Progressive Personalization + Big Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
About the Authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
REES46 Technologies Progressive Personalization in eCommerce | 2

Progressive Personalization
in eCommerce
In online retail, personalization with Big Data remains the choice of retail giants.
The reason is obvious the need for heavy traffic that can create enough data
for analysis. For average businesses with the number of daily visits under
30,000, Big Data cannot produce sustainable results.
This special report is created to shed light on Progressive Personalization a

high-precision type of personalization not requiring Big Data. With Progressive
Personalization you will be able to add high-precision product recommendations
to your store without the need to employ Big Data.
Unleash the power of Big Data personaliza-

tion to increase your sales dramatically,
they said.
Year after year we hear the same idea personalization through Big Data is the
trend that will shape the future of eCommerce. It is indeed true, but with one
proviso: Big Data shows tangible results only for eCommerce giants.

Big Data Not for Everyone
Let us refresh you on the basics of Big Data-driven personalization.
With product recommendations formed by Big Data, each visitor sees

recommendations based on collective behavioral patterns of other visitors. Big
Data algorithms draw comparison between behavioral patterns of this visitor
and patterns of the crowd. In an example, it may look like this:
1. Your visitor is looking 2. 18,250 other visitors 3. 1156 of them also 4. Very probably
at the product details opened the same looked at the your visitor will
of this winter coat product page product details of also be interested
this pair of gloves in these gloves
As a result, that pair of gloves is included in the product recommendations

for this visitor. The chances are, the visitor becomes interested, clicks on the
thumbnail and, maybe, purchases the item.
There is one critical point, however, that reduces the value of this approach to
almost zero for an average online store.
For Big Data to shape product recommendations, algorithms need a lot

of data: location, gender, age, purchase and browsing history, search
history, etc.

When a customer database contains enough (thousands and more)
profiles with complete customer footprints, algorithms are able to
successfully make connections and recognise common patterns. But
until that time, nothing happens.
This is the first in a set of obvious reasons why Big Data can fail to provide
adequate performance for small and mid-sized online stores: lack of data.
Big Data Can Be Wrong

Big Data predicts the behaviour of the majority. If 70% of all your customers
bought this shampoo with that hair conditioner, every new buyer of this
shampoo will see the conditioner in their recommendations.
Whats wrong is that Big Data does not take into account a visitors current
hair condition and hair type, or brand preferences. The visitors may have had a
bad experience with this brand, and so tend to avoid it, or may have found an
alternative they like better.
Personalization based on Big Data misses out the remaining 30% of customers,
who will see recommendations irrelevant to them. For the store, it means that
the recommended product will not be bought.
Big Data can often be wrong, although its hard to see behind all the big
numbers. For a store where 50,000 recommendations generated 45,000
purchases, another failed 5,000 is an allowable loss.
This is the second reason why Big Data is not the right choice for mid-sized
retailers: When each potential online customer is important for future growth,
the store cannot afford ineffective recommendations.

A Poor Substitution 1:1 Personalization
To make up for the flaws of Big Data critical for medium-sized retailers,
professionals have come up with an alternative solution: 1:1 personalization. You
can see the mechanics in the following example:
1. Your visitor is looking 2. Your store assumes this 3. Visitor is recommended

at the product details person wants to buy a product winter coats of the
of this winter coat of this brand and color same brand or color
No complex data or a lot of calculations recommendations are based on the

first action of the visitor.
Again, it turns out to be a miss. Superficial analysis leads to random

suggestions. The fact that the visitor is looking at this winter coat doesnt
necessarily imply any liking for the brand or the colour. It doesnt even imply
that the final decision is going to be a winter coat it may very well be a winter
jacket.
In the situation where personalization through Big Data is unattainable and 1:1
personalization is ineffective, what should the online store do?

There is another solid approach Progressive Personalization technology.
Among its key features, the most important are the ease of use and its high
level of precision.
Whereas Big Data is a black box with obscure logic, Progressive

Personalization technology is precise and transparent.
Imagine a male customer comes to your online store. The customers

ultimate goal is to buy some good winter footwear, but you dont know
that yet. This person is exploring your home page. What will this person
see on the home page?
First, let us take a look at this situation from the Big Data perspective:
Home page example of recommendation block Popular Products

(Big Data)

The logic is sound these are indeed the most popular products, and have
been purchased by thousands of your customers. But the store misses a critical
parameter: this persons gender. In fact, there is much more to it than that, but
let us consider a single parameter for the sake of simplicity.
Now, this is what happens when Progressive Personalization steps in:
Home page example of recommendation block Popular Products

(Progressive Personalization)
In this example, Progressive Personalization also takes into account the

behavioural patterns of thousands of visitors. However, at the same time it
includes in the analysis small details such as, for instance, the visitors gender.
This type of data is easier to obtain and easier to use, and it gives very precise
results recommendations will only show products this visitor can buy.
Each visitor possesses a set of individual features that will define their purchase
decision. One of them we have already mentioned their gender. Big Data
ignored it, and the visitor saw irrelevant recommendations. 75% of them saw
irrelevant products.

In every retail segment, there are simple little details critical to the purchase
decision:
In Apparel. Gender, clothing and shoe size, brand preferences.

In Cosmetics and Beauty. Predisposition to allergies, skin and hair type,
and current condition.
In Jewellery. Finger size, wrist size, gender.
In Pet Products. Type, breed, size and age of the pet.
In Baby & Children. Gender and age of the child.
The list goes on. However, mentioning these is enough to give a clear
understanding that personalization through Big Data misses a lot of critical
details. Progressive Personalization technology recognises and uses all these
details, and more.

Progressive
Personalization
in Apparel
& Accessories
The three critical factors for correct personalization in Apparel & Accessories are
the visitors gender, size, and brand preferences. Quite often online stores make
a blunt mistake their home page is not made to personally address the visitor.
Incorrect Personalization
Gender
One of the biggest mistakes is ignoring a visitors gender.
Chinese online retailer Wholesale Clothes Mart includes womens clothes in recommendations
even on the product pages in the Mens Clothes category. Very odd logic, dont you think?
Even if you are persistent enough to browse their product catalogue for hours,
you will never see any difference.

This type of incorrect personalization leads to almost 0% conversion for
products recommended to the male section of their audience (except, maybe,
men who aim to buy a gift for their loved ones).
In Apparel and Accessories, Progressive Personalization uses three key

parameters: gender, size, and individual brand preferences.
Gender and Brand Preferences
For instance, product recommendations for a pair womens Nike sneakers

at 6PM online store are shaped according to the visitors gender and brand
preferences:

As discussed earlier, brand preferences can be shifted, and including other
brands in recommendations is a normal practice given that these form the
minority of all product recommendations. ASOS demonstrates a good example
of this principle:
Their recommendation block contains twelve thumbnails. The first

eight thumbnails feature the same brand as the main product.

The last four can feature alternative brands given that they
are placed on the third, least-viewed, page of the image slider.
Underlying Mechanics
Unlike the Big Data approach, which needs lengthy data collection and complex
computations, the mechanics of Progressive Personalization are so clear that
they can be explained in simple Excel tables.
These examples are based on the three key parameters in Apparel and
Accessories: visitors gender, clothing and shoe size, and brand preferences.
Gender
Progressive Personalization rule: majority of all male customers buys mens

and unisex clothing, female womens and unisex. Its a rare occasion that
customers buy clothing targeted at the other gender. Recommended products
should correspond the gender.
A familiar example from the previous example: A visitor comes to

your online store for the first time and starts browsing your product
catalogue. In Apparel and Accessories, most of the items are gender-
specific, and this is going to be the marker to help you to only
recommend suitable items.

The first step is to prepare your catalogue for Progressive Personalization
mark your products according to the customers gender:
PRODUCT GENDER TARGETING
Denzil ike jacket Mens
Lenox gloves Womens
Teddy B boots Womens
Re-port T-shirt Unisex
Emeraldine bikini Womens
Chester pants Mens
The next step is to trace the visitors browsing history to determine what
product pages this person views. Tracing:
VISITOR BROWSED PRODUCTS
Mens
Womens
Mens
Mens
Womens
#001
Unisex
Mens
Mens
Mens
Unisex

Simple calculations shows that Mens 6
visitor #001 browsed 10 product Womens 2
pages, out of which 6 featured mens
products; 2, womens; and 2, unisex.
The last (unisex) is not important for
determining a visitors gender. In
summary:
Determining the visitors gender based Probability it is a man 75.00%

on their browsing history, there is 75% Probability it is a woman 25.00%
probability that this person is a man.
Gender Male
The recommended probability level for the algorithms to determine

the gender is 75%. As long as it is lower, the algorithms require more
behavioural data.
In practical terms it means that Progressive Personalization determines

the gender after the first few visitor actions, and will show suitable
recommendations right from the start.
Besides the browsing history, the pre-purchase and purchase history

are also available. This improves the model and brings a higher level of
precision.
The browsing history may not suffice in a real situation for instance, a man
could have viewed a few womens products out of mere curiosity so it is better

to rely on browsing, pre-purchase history and purchase history combined. As
the final two are closer to the purchase, it is evident that they hold more value.
Now the event map looks like this:
PRODUCT VIEW CART PURCHASE
Denzil ike coat Mens
Lenox gloves Womens
Teddy B boots Womens
WestShore purse Womens
Emeraldine bikini Womens
Chester pants Womens
Thunder Belt Mens
Sparrow hat Mens
Re-port T-shirt -
Every type of action has its own weight. In REES46, we deduced the following
correlation:
One purchase tells you more about the View 1

visitor than 9 product views. Cart 5
Let us now refresh the calculations Purchase 10
based on this correlation.
A male marker scores 2 from browsing events and 5 from pre-purchase events
(adding the hat to the cart). A female marker scores 1 from browsing events, 15
from pre-purchase events, and 10 from the purchase.

Calculations tell us there is 78.79% Mens 7
probability this visitor is a woman. Womens 26
Now the algorithms will recommend
Probability it is a man 21.21%
womens products, ensuring that these
Probability it is a woman 78.79%
are going to be products the customer
Gender Female
can afford and will be interested in.
In this example we showed how Progressive Personalization can help determine

a visitors gender. In practice, though, gender is not the only key parameter in
Apparel and Accessories. It is time to discuss the next parameter: size.
Size
Progressive Personalization rule: The majority of all customers buy clothes and
shoes for personal use, and the fitting size is a key purchase factor. Recommended
products should correspond in size, and also be available in stock.
Similar mechanics are used in clothing and shoe size calculations.
In the situation where different sizes of the same model are presented in your
product catalogue as separate lots, you can simply count browsing events in
relation to each lot. However, the regular practice of using the SKU system
makes this case a very rare one. When all the sizes are presented in a drop-
down list or a tick list on the product page, tracking visitors actions is harder, as
choosing a size is logically a step towards adding the item to the cart.

In both cases mechanics can be explained by the following table:
SIZE
BROWSED PRODUCT (SHOES)
38 39 40 41.5 42 42.5
SKU #001 1 1 1
SKU #002 1 1 1
SKU #003 1 1 1 1
SKU #004 1 1 1 1
SKU #005 1 1
SKU #006 1 1
SKU #007 1 1
SKU #008 1 1 1 1
SKU #009 1 1 1
SKU #010 1 1 1
FREQUENCY OF OCCURRENCE 3 7 8 5 2 2
PROBABLE SIZE YES YES
Based on the total number of views, you are able to calculate the visitors
probable shoe size.
If available, purchasing history should also be included into the calculations, as

one purchasing event outweighs several browsing ones.
Brand Preferences
Progressive Personalization rule: A proportion of all customers form a strong

liking for a certain brand and tend to stick to it while shopping. Recommended
products should correspond to the brand preferences.

The last key parameter is brand preferences.
The most suitable mechanics are the advanced ones from the gender
recognition example. First, we calculate the number of browsing, pre-purchase
and purchase events:
ITEM BRAND VIEW CART PURCHASE
Jacket Zara 1
Jacket Zara 1
Winter coat H&M 1
Pants Zara 1
Pants TopShop 1
Now, the event-correlation scheme is EVENT SCORE
applied: Browse 1
Cart 5
Purchase 10
Based on that, you are able to deduce BRAND SCORE
probable brand preferences: Zara 16
H&M 1
Conclusion this visitor has affinity for
TopShop 1
Zara products.

Progressive
Personalization
in Cosmetics & Beauty
A distinctive feature of Cosmetics & Beauty that differentiates it from any other
retail segment is highly individual purchase decisions, which are influenced by a
great variety of factors:
Gender
Product hypoallergenic properties in cases of personal allergies.
Skin type. To be bought regularly, the product must fit the skin type.
Skin current condition. To be bought regularly, the product must also fit
the current condition of the skin.
Hair type. To be bought regularly, the product must fit hair type.
Current hair condition. To be bought regularly, the product must also fit
current condition of the hair.
Purpose of use.
Place of application. Full body, face, hair, hands, feet, private parts, etc.
Brand. Individual brand preferences.
Purchase regularity. Cosmetic products are often consumables, and so
require frequent repurchasing.
First, let us have a look at some common mistakes in targeting and

personalization in this online retail segment.
Cosmetic products are designed to take into account many various physiological
properties. This is a retail segment where one product cannot possibly fit all.
Numerous online stores repeat the same mistake: They choose to ignore
customers individual physiological properties.

Skin Type
For instance, Flipkart sells a body butter for dry skin:

Product recommendations, nevertheless include products for other skin types
sensitive, for example:
Hypoallergenic Properties
Dermstore features a line of gluten-free products for consumers allergic to
gluten.

Customers can filter out unsuitable options to see only gluten-free items.
Recommendations on the product detail page, nevertheless, can ignore
customers choice:
Not a single recommended product is gluten-free, although they still have some
very specific characteristics limiting the target group:
Given the fact that every cosmetic product is highly individual, it is obvious that
this recommendation is a simple placeholder, and has no value for the visitor.
Much the same as in Apparel and Accessories, the key factors affecting the final
purchase decision are the visitors gender and brand preferences.

Gender and Brand Preferences
The correct approach is based on including both of these in the calculations.

Let us look at the example of the David Jones multi-category store:
As you can see, product recommendations are rendered based on both the first
chosen brand and the visitors gender.

Every cosmetic product is designed for a specific place of application: face,
hands, private parts, feet, etc.
Combined with the affinity for a certain brand, this factor causes customers
to stay with one brand, buying cosmetics kits for various purposes.
Nordstrom takes this into account. When the visitor chooses a Jack Black
beard oil:

The product recommendations first feature alternative brands (as explained, the
customers opinion can be swayed by brand preferences); and then a dedicated
recommendation block with various purpose and application products of the
same brand (an antiperspirant, face scrub, cleanser, and a combined care set).
It is essential to emphasise how different Cosmetics and Beauty is from any

other retail segment, and how many various parameters should be included in
calculations to reach an adequate level of personalization. Another complication
is that products in this segment can easily cause an allergic reaction, or
otherwise negatively affect users health.

To understand the logic behind Progressive Personalization in Cosmetics and

Beauty, let us take a look at the underlying mechanics of the calculations of each
key parameter.
Gender
Progressive Personalization rule: A lot of cosmetic products are designed

specifically for men or women. Female customers almost always shop for
themselves, and so do males. Recommended products should therefore
correspond to the gender.
In Cosmetics & Beauty, the same pattern from Apparel & Accessories is
applied for calculating visitors gender.
First step is to prepare your catalogue for Progressive Personalization mark

your products as mens or womens or unisex:
PRODUCT GENDER TARGETING
Paolo hand lotion Mens
Grapeful shampoo Unisex
Ski Race shaving gel Mens
Wish face pack Unisex
Lip Lap lipstick Womens
Chelsea Lee finishing powder Womens

The next step is to track the visitors browsing history and determine what
products are viewed most often:
VISITOR BROWSED PRODUCTS
Mens
Womens
Mens
Mens
Womens
#001
Unisex
Mens
Mens
Mens
Unisex
Unisex products are not to be included Mens 6

into further calculations: Womens 2
It is now time to calculate the gender Probability it is a man 75.00%

probability. There is 75% probability Probability it is a woman 25.00%
that this visitor is a male.
Gender Male
Our experience shows that optimal probability level is 75% and higher. If
it is less than this, the algorithms need a few more tracking records.

Progressive Personalization is designed to determine visitors gender on the go
right from the first minute.
For a more reliable result, we need to include in the calculation different

types of events: browsing, pre-purchase and purchase. All three types have a
different importance level: the lowest level a single view; the highest level a
purchase.
This type of approach allows you to avoid possible mistakes. For instance,
when a man is browsing womens products in search of a better gift idea for St.
Valentines Day.
A more detailed event map is presented below:
PRODUCT VIEW CART PURCHASE
Ski Race shaving gel Mens
Tulip nail polish Womens
Paolo hand cream Womens
Wish face pack Womens
Lip Lap lipstick Womens
Chelsea Lee finishing powder Womens
Bison deoroller Mens
Tonitros body cream Mens
Grapeful shampoo -

Every visitor action has a certain level of View 1
importance: Cart 5
Purchase 10
Then we attribute scores to each event Mens 7

and calculate the sum: Womens 26
Probability it is a man 21.21%

Conclusion the visitor is a female,
and product recommendations should Probability it is a woman 78.79%
feature womens products. Gender Female
Type, Condition and Hypoallergenic Properties
Progressive Personalization rule: A lot of cosmetic products are designed for

certain skin and hair types (and conditions). A proportion of all customers may
have an adverse reaction to certain ingredients, and for them hypoallergenic
properties are a key purchasing factor. Recommended products should
correspond to the skin and hair type and current condition, and be mostly
hypoallergenic (for customers with allergies).
Skin and hair type and current condition, as well as a predisposition to any
allergies, can also be calculated based on the browsing events.
Your store tracks the visitors browsing history. Given that all products in
the product catalogue have been marked according to the targeted gender,
hypoallergenic properties, skin and hair type and current condition, the
following table is built:

PRODUCT GENDER HYPOALLERGENIC? SKIN TYPE HAIR TYPE
Hand cream Womens Dry
Foot cream Womens Yes Normal
Body lotion Womens Yes Normal
Shampoo Womens Oily
Conditioner Womens Oily
Shower gel Unisex Normal
Shaving gel Mens Yes
Based on this data, your store calculates the visitors key properties: She is a
woman, allergic to a certain ingredient, with normal skin type, dry skin on hands
and oily hair.
PARAMETER VALUE REASON
Gender Female The majority of products are products for women
Relationship status Has a partner Shows a basic interest in products for men
Allergies Yes Some of the products are hypoallergenic
Hair type Oily hair Shampoo and hair conditioner for oily hair
Skin type Normal skin Foot and body cream for normal skin
Hand skin type Dry skin Hand cream for dry skin
The same logic is applied to other key parameters. You can introduce
more markers to your product catalogue to reach an even higher level of
personalization. The more detailed the event map, the more relevant and
individual the recommendations that will appear.

As you will have noticed, there is an extra parameter deduced in the process:
relationship status. One of the viewed items was a mens product. It also
gives the store an opportunity to include mens products into personal
recommendations for this woman before any big holidays; for instance, a
cosmetics kit for men.

Progressive
Personalization
in Baby & Children
Products
The key parameter affecting sales in Baby & Children is the childs age. To be
precise, not age per se, but age interval. This parameter is critical because of a
variety of factors:
There are products a child needs starting from a certain age (e.g., school
supplies).
There are products a child needs before reaching a certain age (e.g.,
stroller, diapers, pacifier, etc.).
A childs age defines various other parameters; for instance, shoe and
clothing size.
Educational games are often labelled according to a minimum age, and
parents tend to rely on that when choosing the game.
Growing as quickly as they do, children change physically by the month.
However, childs age is not the only parameter affecting the final purchase
decision. There are other important parameters such as childs gender, product
type, and brand. (Purchased products may be regularly bought consumables.)
First, we are going to concentrate on some negative examples showing how
online stores may hinder their own growth.
Basic rules from other segments also apply to Baby & Children: for instance,
childs age one of the most critical parameters for good sales in this retail
segment.

Childs Age
A common mistake is showing product recommendations that are not based on

the childs age.
An example of this bad practice can be seen in The Childrens Place fashion
store. Selected size is for babies of 6-9 months, but recommendations on this
product page ignore this:
During the first months, babies undergo rapid physiological changes, and an item that
fits a 3-month-old baby wouldnt fit a 6-month-old one. If a visitor chooses a particular
size, it is an obvious sign that this person is shopping for a baby of a particular age.

When the visitor chooses the size and adds the item to the cart, this person also
sees the following product recommendations:
Not all of them, though are available in the same size as the main product.
These product recommendations are being simple placeholders and have

almost no relevance to the current visitor. They will not generate a purchase.

Childs Gender
Another example is the Mattel toy store. Their recommendations concentrate

on the products from the same brand, but dont take into account childs
gender.
In the products recommended along with Monster High dolls (adored by the
majority of girls), a visitor can see toys from the same brand and, surprisingly,
Hot Wheels car models. Car models are widely adored by boys.
These product recommendations do not perform well, as the algorithms are

missing a very critical parameter.

Childs Age
Here is an example of correct personalization for a toy store.
Fishpond does not specialise in toys per se, but has a wide range of toys for
children of different ages. Its product recommendations rely heavily on the
childs age:
Lego Duplo Workshop 10607 is targeted at the children of 2-5 years. Product
recommendations on the product page feature lots targeted at exactly the same
age it is a starting point for correct personalization in this retail segment.

Each recommended item falls into category For kids of 2 to 4 years, and corresponds
to the main product age bracket. This type of recommendation will work.
Another side of this situation is that often Baby & Children is de facto a sub-
category in online stores, and rules from other categories also apply to it.
For instance, in clothes for kids, cosmetics for kids, and food for kids, the parent
rules of the retail category also apply to the sub-categories; so remember that
if you operate in this retail segment. For the rules of other retail segments, refer
to the corresponding parts of this White Paper.
Gender and Age
Progressive Personalization rule: in Baby & Children, clothing and shoe size
directly depends on the childs age. Some items are bought for boys more often
than for girls, and vice versa. Recommended products should correspond to the
gender and age.

Childs gender and age, in this case, should be deduced together.
First step, as before, is marking your products according to specific gender and
age.
PRODUCT GENDER TARGETING AGE
SKU #001 Boys 1
SKU #002 Boys 3
SKU #003 Girls 3
SKU #004 Boys 1
SKU #005 Girls 3
SKU #006 Girls 3
SKU #007 Girls 3
SKU #008 Boys 1
After collecting sufficient data, you can group and rate views according to the
group. The probability is calculated based on the correlation of the total score to
the groups.
GENDER AGE SCORES PROBABILITY
Male 1 3 37.50%
Male 3 1 12.50%
Female 3 4 50.00%
In this example there is no clear leader. It means that the visitor probably has
two kids of different age and gender. From the table, you can conclude it is a
boy of 1 year and a girl of 3 years old.
Based on this probability, your store can show products targeted at both
children, and be sure that these recommendations will be effective for
generating sales.

Progressive
Personalization
in Pet Products
Pet owners are often very particular about food and toys for their little friends,
and this obliges a store to have very precise high-level personalization in this
retail segment.
The list of key parameters affecting a consumers final purchase decision

includes the following:
Pet type. Many products for dogs are not suitable for cats, and vice versa.
Given that there are also many other types of popular pets, its critical to
know the pet type.
Pet breed. Food formula for Labradors, for instance, is not suitable for
Dachshunds, and vice versa.
Pet size. This parameter affects not only pet apparel size or pet carrier size,
but also the amount of purchased food: A Saint Bernard needs a bigger
serving; a miniature Pinscher, a smaller one.
Pet age. A product for aged dogs will not suit a puppy. This basic rule
applies to all pet types.
Brand preferences. Owners tend to follow experts advice, and are very
meticulous about the chosen brand of food, vitamins and pet products
in general. In this category, the customer is not easily swayed to another
brand, but typically sticks to a single brand for a long time.
First, let us take a look at common mistakes in personalization in this online

retail segment.

Commonly enough, online stores specialising in pet supplies, food and products
ignore basic rules of effective personalization, and, as a result, choose to show
irrelevant recommendations.
In the screenshot of one of the Pet Shop USA pages, you can see a pack of food
mix for smaller birds.

The recommendation block You May Also Like provided at the bottom of the
page includes only three products:
This store chose a very simple advertising tactic to recommend only

discounted products. The problem is that all three products are dog food. This
fact renders recommendations useless for a bird owner. (Otherwise, why would
a visitor come to a product page with bird food?)
Pet Type
Pet type, as mentioned earlier, is a critical parameter influencing the customers

purchase decision.

Zooplus is a good example of Progressive Personalization approach. New
visitors see recommendations with products for cats and dogs (statistically most
popular pets).
Later, recommendations change depending on the type of pet the browsed

products are targeted at. For instance the visitor adds a food mix for cats to the
cart:

Starting from this point, recommendations features only products for cats:
Pet Breed
Another example can be seen in Chewy dog and cat food, treats and supplies
store.
It features more than 500 different brands. One of those is Natural Balance. In
this product page screenshot you can see one of their food formulas (for dogs of
all breeds):

Recommendations for this product show that Chewy chose the strategy based
on customers brand affinity. The majority of the recommended products are of
the same brand:
Chewy also chose to customise recommendations based on the breed you will
not find food formulas for big dogs while browsing formulas for smaller dogs.

Pet Age
Petsmart sells a milk replacer for newborn kittens up to 6 weeks old, and for
pregnant and lactating cats:
The correct conclusion drawn the product details is that this person owns a cat
that has recently delivered a litter of cute kittens, or is about to.

Because of that, the recommended products are those fitting both adult cats
and newborn kittens:
Using this principle, the store is covering both options, and recognises the
individual properties of the customer. This type of recommendation will almost
certainly work.
When generating recommendations for stores in Pet Products, its critical to

understand that pet owners are often meticulous about their purchases, and
either heavily rely on experts opinion or are very competent themselves a
random product will just not work.
Just as in any other retail segment, the first step is to properly mark your
products. The number of additional properties is limited only by the number of
product properties your store keeps on a regular basis: pet type, product type,
pet breed, size, age, customers brand preferences, etc.

Pet Type, Breed and Size
Progressive Personalization rule: As a rule, purchased products are always

designed for the corresponding pet type, and often, the pet breed. Less critical,
but still important, parameters are pet size, age and brand preferences.
Recommended products should correspond to all of the above.
For the sake of simplicity, we limited parameters in the following table to two
pet types and three breeds:
PRODUCT PET TYPE BREED
SKU #001 Dog Whippet
SKU #003 Dog Terrier
SKU #004 Cat Bobtail
SKU #005 Cat Bobtail
SKU #006 Dog Terrier
The next step is to track visitors browsing history to calculate the pet type
probability. In Pet Products, there is a certain possibility of an accidental
view when a visitor clicked on a small display ad but later found out that the
advertised product does not meet the expectations or is not suitable for the pet.

It is then time to calculate the pet type and breed probability:
TYPE BREED SCORES PROBABILITY
Dog Whippet 4 50%
Dog Terrier 2 25%
Cat Bobtail 2 25%
Already, after the eighth browsing event, a store with Progressive

Personalization knows that there is 50% probability the visitor owns a whippet
and is looking for products designed for this breed
More browsing will narrow down the probability, and product recommendations
will progressively improve in relevance, to the benefit of both the customer and
seller.

Progressive
Personalization
in Home Appliances
& Consumer Electronics
The Home Appliances and Consumer Electronics niche has very specific
requirements for product recommendations each product has tens of
particular characteristics. Every purchase in this category is backed up by very
thorough research.
In this retail segment, product recommendations have two main functions:
Cross selling enticing the customer to buy complementary products

(consumables, accessories).
Presenting alternatives enticing customer to choose an alternative
option with characteristics similar to, or better than, the main product.
Product recommendation in this segment should take into account the following
two critical parameters:
Brand preferences. Each customer has individual brand preferences

influenced either by commercials or by prior experience and research. In
Home Appliances, and even more so in Consumer Electronics, individual
brand preferences heavily influence the final purchase decision.
Price. Home Appliances and Consumer Electronics present the customer
with a wide choice in every price segment. Stores should not base their
strategy on a single buy: If a customer buys an iPhone 7 for $700, it does
not necessarily mean that this person should be recommended a $1,500
fridge.
Online stores often make a big mistake by ignoring these two parameters in
their calculations.

Price Preferences
Ignoring individual price preferences is a regular mistake of many online

retailers.
A very typical example is Costco, where product recommendations do not

correlate with the chosen price range:
This vacuum cleaner is from the low price segment (the lowest in fact).

Recommendations, however, choose to ignore this fact, and do not correlate
with the customers possible financial potential:
These are all premium segment goods, including the TV its official
price is over $8,000 and the Dyson Ball Complete ($450), and are
likely to be dismissed by the customer as highly overpriced.
Progressive Personalization in Home Appliances & Consumer Electronics

includes in its calculations the two above-mentioned key parameters: price
preferences and brand preferences.

Brand Preferences
Browsing a particular brand in BrandsMart USA, the visitor will see brand-
dependent recommendation:
Three out of five recommended products are of the same brand as the main
one, which increases the probability of a successful purchase.

Price Preferences
The second key parameter affecting the final purchase decision in this segment
is price preferences.
As mentioned before, if the customer bought a premium segment product, it

doesnt mean this person is ready to stay in the same price range in the other
product categories it may have been a single occasion.
The recommendation block on this product page includes items from other
product categories, and these are average-priced affordable products.

Relying on these two key parameters is critical for correct personalization in this
retail segment.
For high-level personalization in product recommendations, your store should

have relevant customer data.
Given that product in your store have appropriate markers, here is the logic
behind the calculations:
Brand Preferences
Progressive Personalization rule: Consumers often develop a strong liking for

a certain brand, and tend to stick to it while shopping (especially in Consumer
Electronics). Recommended products should correspond the brand preferences.

The event map for this example is presented in the following table:
PRODUCT BRAND VIEW CART PURCHASE
Juicer Ninja 1
Coffee machine Ninja 1
TV Philips 1
Blender Ninja 1
Fitness tracker FitBit 1
Each visitor action has a certain value,

EVENT SCORES
as the visitor may be curious about
View 1
some product but then purchase
Cart 5
different ones. The correlation is shown
in the following table: Purchase 10
Based on all of this, you are able to BRAND SCORES
calculate the scores: Ninja 16
Philips 1
The visitor has a liking for Ninja products,
and should therefore be recommended FitBit 1
products from the same brand.

Price Preferences
Progressive Personalization: A proportion of all consumers tend to make

purchases outside their budget. These products are often meant to enhance
their public image, and are bought very rarely, and on credit. Recommendations
should not be formed based on a single purchase and by showing a customer only
premium-segment products.
All products can be divided into three main price segments: low price, mid-price,
and premium segment.
Progressive personalization helps answering two main questions:
1. What price segment should products be recommended from?

2. What price segment will suit the customer?
To determine the answers, we build the following table:
PRODUCT BRAND CATEGORY PRICE
Juicer Ninja Kitchen Appliances $100
TV Philips TV & Video $300
Coffee machine Ninja Kitchen Appliances $110
Headphones Koss Headphones $600
Fitness tracker FitBit Health & Personal Care $700
Blender Ninja Kitchen Appliances $130
TV LG TV & Video $312
DVD player Sony TV & Video $330

All viewed products are grouped by the price segment you pre-set in your store
low price, mid-price and premium segment.
After that, we are able to calculate the average price, and determine the price
segment suitable for the given visitor in each category:
CATEGORY PRICE PREFERENCES
Kitchen Appliances $113
TV & Video $314
Headphones $600
Health & Personal Care $700
Based on these calculations, the store can shape correct recommendations

showing only products from the determined price range, and dynamically
change the range based on the browsing history.

Progressive
Personalization
in FMCG
(Fast-Moving Consumer Goods)
Fast-moving defines the way stores operate in the retail segment consumers
regularly buy products from this retail segment, and the role of a store is to
not only recommend goods, but also to remind customers about upcoming
shopping events.
With the above in mind, the main tools in this retail segment are trigger emails,
which serve as a reminder and help customers to both shop on time and plan
ahead.
Consumables being a wide retail segment, it is important to remember that

it also includes cosmetics, and widely includes food and drinks as well. That
dictates the two key parameters to rely on for recommending products:
hypoallergenic properties, and type of the product.
Combining Progressive Personalization with trigger emails, stores can calculate

their potential revenue from these regular purchases, and stimulate them by
reminding forgetful customers about upcoming purchases.
Big Data performs very poorly in this retail segment for an obvious reason: It
ignores regularly purchased products. Instead, it predicts what other products
will be interesting to the person who bought a particular product.
Big Data will recommend a durum wheat pasta to the customer, who purchases
artisan vegetables every week, just because another 10,000 customers did the
same. That, instead of simply reminding the customer to shop for vegetables.

This is the main reason for applying Progressive Personalization for fast-moving
goods.
Purchase Regularity Analysis

The logic is very simple. Your store keeps records of products purchased by each
customer. It takes the complete purchase history for each customer for the last
month. Upon that, it filters out products that were purchased more than once,
and groups the rest:
PRODUCT WEEK 1 WEEK 2 WEEK 3 WEEK 4
Liquid soap 1 1
Bread 1 1 1
Toilet paper 1 1
Washing detergent 1 1
Batteries 1 1
Based on that, the store can predict the upcoming months purchases. The logic
would be the same, and so is the table.

Progressive Personalization and Effective
Email Marketing in FMCG
The following advice will help your store raise the quality of service, and
effectively control sales flow in FMCG.
Trigger emails for every regularly purchased product. Your store can have
various email templates to remind the customer about an upcoming purchase a
couple of days ahead of the predicted event.
This strategy works well for loyal customers with long time spans between their
purchases, or who buy a very limited number of goods. Otherwise, its easy to
annoy the customer and lose out on future sales.
Trigger emails for groups of regularly purchased products. You store

analyses a customers behavior and optimises the purchase plan to make one
purchase once a month instead of several micro-ones, and buy every one, or the
majority of regularly purchased products.
PRODUCT WEEK 1 WEEK 2 WEEK 3 WEEK 4
Liquid soap 2
Bread 2
Toilet paper 2
Washing detergent 2
Batteries 2
The customer is notified what products, and in what amount, an upcoming

purchase contains, and is advised to purchase all of them at once.

One of the advantages of this scenario is that the store forms a ready-to-buy
cart with the deduced products beforehand, and contacts the customer with a
reminder email. The customer has only to click the link, go to the cart, and finish
the checkout.
It is important to enhance a trigger email with personalized product

recommendations. In this way, trigger emails not only help the store steady the
sales flow, but also raise the
Product recommendations, based on the full set of acquired data about the
customer (including browsing, pre-purchase and purchase history telling about
preferences for products, customers age, gender, possible allergies, price
preferences, etc.), meaningfully increase the value of trigger emails.

Progressive Personalization + Big Data
Personalization based on Big Data is a powerful but imprecise marketing tool.

Big Data doesnt use a customers individual properties, and also requires a
significant amount of time as well as traffic for analysis and calculation.
All of these downsides can be compensated by employing Progressive

Personalization technology, which has been successfully implemented in mid-
sized as well as large online stores.
Key features of this type of personalization include the following:
Progressive Personalization doesnt require high traffic (suitable for stores

with daily traffic of under 30,000 unique visitors).
Progressive Personalization starts working after a mere two clicks from a
visitor.
Progressive Personalization relies on the individual properties of each
visitor (incl. gender, age, income level, relationship status, number of
children, brand preferences, etc.)
Progressive Personalization is designed to take into account the specifics of
the given retail segment.
This technology is designed to give high results and adequate performance,

whether employed separately or combined with Big Data. In both cases,
Progressive Personalization will account for visible growth, better conversion,
higher revenue per paying user, and other KPIs in your store.
All mechanics described in this report can be realised independently by your

store, or employed via a ready-to-use Progressive Personalization solution.

About the Authors
Since 2013 REES46 Technologies has been working with Progressive
Personalization technology in the following retail segments:
Apparel & Accessories Baby & Children
Cosmetics & Beauty Pet Products
FMCG Construction & Repair
Jewellery
Our team focuses on providing online stores with full set of marketing tools
effectively employing Progressive Personalization.
REES46 is a marketing suite with all features essential for growth in eCommerce:
High-Level Targeting Personalized Product

& Advertising Recommendations
Search Trigger Emails

Personalization & Web Push Notifications
Marketing Emails & Promo Effective Feedback Service

Web Push notifications with Customer Reviews
eCommerce Analytics
& Customer Segmentation
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Progressive

Progressive Personalization in eCommerce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Big Data Not for Everyone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Big Data Can Be Wrong. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

A Poor Substitution 1:1 Personalization.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Progressive Personalization in Apparel & Accessories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Progressive Personalization in Cosmetics & Beauty.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Progressive Personalization in Baby & Children Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Progressive Personalization in Pet Products.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Progressive Personalization in Home Appliances & Consumer Electronics 54

Progressive Personalization in FMCG (Fast-Moving Consumer Goods). . . . . . . . . . . 64

Progressive Personalization + Big Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

About the Authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

REES46 Technologies Progressive Personalization in eCommerce | 2

This special report is created to shed light on Progressive Personalization a

Unleash the power of Big Data personaliza-

REES46 Technologies Progressive Personalization in eCommerce | 3

With product recommendations formed by Big Data, each visitor sees

As a result, that pair of gloves is included in the product recommendations

For Big Data to shape product recommendations, algorithms need a lot

REES46 Technologies Progressive Personalization in eCommerce | 4

Big Data Can Be Wrong

REES46 Technologies Progressive Personalization in eCommerce | 5

1. Your visitor is looking 2. Your store assumes this 3. Visitor is recommended

No complex data or a lot of calculations recommendations are based on the

Again, it turns out to be a miss. Superficial analysis leads to random

REES46 Technologies Progressive Personalization in eCommerce | 6

Whereas Big Data is a black box with obscure logic, Progressive

Imagine a male customer comes to your online store. The customers

Home page example of recommendation block Popular Products

REES46 Technologies Progressive Personalization in eCommerce | 7

Now, this is what happens when Progressive Personalization steps in:

Home page example of recommendation block Popular Products

In this example, Progressive Personalization also takes into account the

REES46 Technologies Progressive Personalization in eCommerce | 8

In Apparel. Gender, clothing and shoe size, brand preferences.

In Baby & Children. Gender and age of the child.

REES46 Technologies Progressive Personalization in eCommerce | 9

REES46 Technologies Progressive Personalization in eCommerce | 11

In Apparel and Accessories, Progressive Personalization uses three key

Gender and Brand Preferences

For instance, product recommendations for a pair womens Nike sneakers

REES46 Technologies Progressive Personalization in eCommerce | 12

Their recommendation block contains twelve thumbnails. The first

REES46 Technologies Progressive Personalization in eCommerce | 13

Progressive Personalization rule: majority of all male customers buys mens

A familiar example from the previous example: A visitor comes to

REES46 Technologies Progressive Personalization in eCommerce | 14

PRODUCT GENDER TARGETING

Denzil ike jacket Mens

Lenox gloves Womens

Teddy B boots Womens

Re-port T-shirt Unisex

Emeraldine bikini Womens

Chester pants Mens

VISITOR BROWSED PRODUCTS

REES46 Technologies Progressive Personalization in eCommerce | 15

Determining the visitors gender based Probability it is a man 75.00%

The recommended probability level for the algorithms to determine

In practical terms it means that Progressive Personalization determines

Besides the browsing history, the pre-purchase and purchase history

REES46 Technologies Progressive Personalization in eCommerce | 16

Now the event map looks like this:

PRODUCT VIEW CART PURCHASE