Skechers has been at the forefront of the e-commerce industry, focusing on hyperpersonalized experiences to meet customer expectations better. Following significant growth during the pandemic, Skechers embarked on a modern digital transformation to centralize their data sources and create connected profiles for a deeper understanding of customer relationships. The brand aimed to create granular audiences for targeted recommendations that drive conversions in a resource-efficient manner. By integrating ActionIQ’s Customer Data Platform with the Databricks Data Intelligence Platform, Skechers empowered their marketers with data and artificial intelligence, resulting in a 324% increase in click-through rate and a 68% reduction in acquisition costs.
Laying the building blocks for a modern digital transformation
Redefining the footwear landscape has been essential to Skechers’ success. With innovative designs and a customer-centric approach, Skechers views personalization as crucial to meeting the evolving demands of today’s consumers. During a rapid expansion at the pandemic’s onset, Skechers saw an opportunity to optimize their tech stack and the accessibility of customer data across various systems — e-commerce, point of service, operations, inventory and more. Managing international data across 180+ countries, Skechers shifted from a channel-centric to a customer-centric approach, aiming to provide marketers with the right insights to meet customers across both digital and in-store experiences. This digital transformation was expected to boost revenue, increase average order values and optimize marketing spend.
By unifying their data ecosystem, the team planned to unlock significant process efficiency for the marketing team regarding campaign execution. There was a lot of opportunity to improve velocity and implement more sophisticated omnichannel use cases — like real-time personalization and automated campaigns — to provide a seamless shopping experience across all channels. Since Skechers’ prior legacy data warehousing environment was not designed for its newfound scale, managing the vast volumes of data in real time became increasingly challenging.
In response, Skechers invested in the Databricks Data Intelligence Platform for its unifying lakehouse architecture that brings together data, analytics and AI. A centralized data lakehouse was not enough though, as they also needed a comprehensive customer data platform (CDP) to empower their marketers to build data-driven campaigns. The objective of these investments was to establish a holistic view of the customer that would enable them to democratize insights and support Skechers in their goal to reduce customer acquisition costs and increase customer lifetime value through targeted, omnichannel marketing strategies.
Todd Harrison, Senior Vice President of Digital Marketing at Skechers, explained, “Once our customer data was all in one place, we needed a robust solution that could unlock that intelligence to our marketers quickly, enabling them to activate and orchestrate personalized experiences in the right channels at the right time. ActionIQ’s composable Customer Data Platform was that solution for us. It didn’t just accelerate campaign deployment, it also helped us optimize our marketing spend.”
Unifying and democratizing insights to craft personalized shopping journeys
Databricks has been a perfect fit for Skechers, as they have served as the connective tissue between Skechers’ data and their efforts to engage customers. With Databricks as the foundation for ActionIQ’s Customer Data Platform, Skechers has made significant strides in refining their data management and analytics capabilities with a future-proof platform built for scale.
Choosing to build ActionIQ’s Customer Data Platform on Databricks presented another compelling advantage for Skechers. It paved the way for the unification of diverse data sources — whether through batch processing or real-time streaming — using technologies like Kafka to bring data into a manageable ecosystem, which allowed the data to flow through the lakehouse architecture. In other words, Skechers could leverage the Customer Data Platform’s 360-degree view of the customer, which was powered by the data stored in the Databricks Data Intelligence Platform. “Since the customer journey is inherently more complex nowadays,” said Manish Agarwal, Vice President of Data, Analytics and Insights at Skechers, “the integration helps us better understand the many customer touchpoints, test various audiences to orchestrate sophisticated omnichannel journeys and deliver the right product recommendations and incentives to the right customer at the right time.” Plus, the ability to further operationalize ActionIQ with Databricks increased Skechers’ desire to build an integrated tech stack, where each solution they used would be best of breed.
“Previously our sole focus was on a marketing cloud. With ActionIQ at the center of our stack, we can now unify data from numerous sources in Databricks and enable marketers to access it to create audiences and omnichannel journeys themselves. We’re excited to move toward an integrated model soon,” said Agarwal.
With Delta Lake, the Databricks data management layer, Skechers addressed issues like upserts (i.e., a database operation that merges the processes of updating and inserting customer profiles). They also benefited from higher performance and more reliable pipelines for downstream analytics. In turn, Skechers can now manage their customer data more efficiently, enjoying lower compute costs and more precise insights for targeted marketing strategies. This was a pivotal development, as managing upserts effectively is crucial for maintaining a dynamic and accurate view of customer interactions across multiple touchpoints. Now, the shoe retailer can harness a more nuanced understanding of customer behavior and preferences, translating into more personalized customer journeys, smarter audience segmentation and improved compliance. Agarwal elaborated, “If an audience list is being built for the U.S. customer, we don’t want to target shoppers in Europe because of the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Databricks, along with ActionIQ, has enabled us to maintain that governance and segregate our user base, so we’re targeting the right people.”
Improving marketing efficiency to boost return on investment
The strategic integration of Databricks into Skechers’ data management infrastructure has marked a significant milestone in the company’s quest for data-driven excellence. ActionIQ also played a crucial role in refining audience segmentation, recommendations and overall marketing strategies. This partnership has enabled Skechers to not only optimize their data architecture for accessibility and scalability but also to ensure data quality and valuable insights for a potent marketing approach.
The advanced data processing and analytics capabilities provided by Databricks — combined with the sophisticated audience segmentation and targeting tools from ActionIQ — have led to remarkable outcomes. These include a decrease in campaign lead time from 2–8 weeks to 4–10 days. With their live campaigns, they’ve seen a 324% increase in click-through rate for ActionIQ audiences compared to Skechers’ first-party audience lists, a 68% reduction in cost per click and a 28% improvement in return on ad spend targeting Skechers Plus members and previous purchasers. As highlighted by Agarwal, “Right now, 80% of the data that we need to execute any machine learning use case is located in Delta Lake. This helped us fast-track our Customer Data Platform adoption and start delivering value for our marketing initiatives in six to nine months.”
To assess and segment customers based on their predicted future value and activity levels, Skechers leveraged customer lifetime value and activity ratio scoring — pivotal in their efforts to revamp their “Lapsed Customer” email campaign. With ActionIQ Customer Data Platform, an AI-powered marketing continuous testing platform, they can more efficiently target at-risk customers via email to increase repeat purchases and engagement. Measuring performance for online transactions, the ActionIQ “At-Risk” campaign saw measurable improvements: a 65% increase in conversion rate, a 65% lift in click-through rate and a 55% boost in revenue per mille (thousand views). Additionally, revenue and online orders increased across all three email touches. As a result, Skechers will implement the At-Risk campaign as their control moving forward and plans to test different offers (i.e., % off vs. $ off) during its next iteration.
Looking ahead, Databricks and ActionIQ are poised to propel Skechers into the future of near real-time customer data activation as they venture beyond the initial low-hanging fruit of marketing wins. This forward-thinking approach aims to drive more business growth, operational efficiencies and better customer engagement. Skechers’ commitment to leveraging these technologies underscores their commitment to reshaping the company’s strategic direction in e-commerce, with Databricks sophisticated data and artificial intelligence capabilities at the heart of this transformative journey.
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