The Search for a Better and More Personalized E-Commerce Experience — Intellimize
E-commerce as a channel is massive and continues to grow at record rates. There are ~8M ecommerce retailers across the world generating $4Tn+ in annual sales and growing at a 16% CAGR. What’s more, the COVID-19 pandemic only served to accelerate that trajectory worldwide. Yet despite record growth, including over the past year, there is still much progress to be made at optimizing the experience for retailers and consumers as the overall ecommerce penetration rate of all retail sales is only ~18%.
One Size Fits All Doesn’t Actually Fit.
The goal of an e-commerce website is ultimately to convert a visitor into a purchaser. With so much web traffic, retailers must find ways to differentiate and stand out. Personalization allows them to create unique experiences but personalization of web pages is very difficult. Relevant and timely messaging is key to educating customers, minimizing friction and building confidence in brand interactions. 80% of shoppers are more likely to buy from a company that offers personalized experiences while 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience.
US internet digital ad spend will soon become 2/3 of all ad spend in the US. It is expected to grow from $215B in 2020 to $280B in 2023, while online advertising in particular will go from capturing 55% in 2020 to 64% in 2023, at a CAGR of 14.7%. Companies will need to deploy a highly personalized approach to realize conversion. At the same time, the expected crack-down on third-party cookies has the potential to lead to less effective advertising and thereby impair revenues. This puts tremendous importance on first-party personalization tools. First party data is critical to understand consumer behavior, segments and trends, ultimately delivering a more tailored and meaningful experience for customers. In a recent article, BCG noted, “an effective retail media network funds additional retailer investments in personalization, which, in turn, drives a better consumer experience, greater customer loyalty, and increased vendor and retailer sales and bottom line.”
As a result, e-commerce retailers need more tools to find ways to personalize the experience for customers and capitalize on growing traffic.
Website optimization itself isn’t a new concept. A/B testing for web design has existed for quite some time. However, how e-tailers will need to break through all the noise and create solutions that actually provide personalized and more useful results in real time if they are going to succeed as the market evolves. Traditional A/B testing, however, has a number of drawbacks:
Personalization of E-Commerce is the Answer
After identifying this problem and researching the space for some time we believed there had to be a better way. And there is.
We are excited to announce our investment in Intellimize, Inc.
Intellimize was founded in 2016 by Guy Yalif, Jin Lim and Brian Webb after spending over a decade working together at Yahoo, previously leading a 700-person team personalizing the Yahoo home page (in the 2000’s) which was, at the time, the most popular page on the Internet, generating 110M views a day, thanks to leveraging Machine Learning (ML) at scale. Today, Intellimize is a leader in AI-driven, intelligent website optimization that helps medium to enterprise scale businesses increase revenue, customers, and sales leads by using ML to tailor visitor experiences. The ML optimizes individual steps of each buyer’s journey in real-time and automatically adjusts web pages in response to behavior to deliver the experiences most likely to drive each user to convert. While competitors use data to make recommendations and people to implement them, Intellimize automatically uses the data to make decisions and optimizations in real-time. As these decisions are made, the customer experience changes from one consumer to the next based on intent and data.
We believe that every digital company operating at scale would see a significant lift in conversion thanks to Intellimize. On average, Intellimize provides a 46% lift in designated KPI conversion and is able to optimize 78M versions of a page, which would take traditional a/b testing 25 years to complete. We were equally impressed by seeing how much customers absolutely loved the product, and found it critical to their tech stack. Their customer base includes some of the largest companies in the world with Snowflake, Tableau, Sumo Logic, Unilever and others, all providing public testimonials of their experiences with the product. These large-scale customers choose Intellimize because it delivers better and faster results by dynamically changing the customer experience through automation.
At Cobalt, we believe that AI-driven personalization provides an overall better user experience, which is core for e-commerce. For all these reasons, we were excited to lead a $30M Series B for Intellimize with exceptional partners such as Addition, Amplify Partners, Precursor Ventures, Operator Partners, Homebrew, and others.
We couldn’t be more excited to partner with the entire Intellimize team as they bring a more data-driven and personalized approach to e-commerce.
