Blending Marketing and CX Delivers a 91% Repeat Customer Rate for etailer zulily

By Ginger Conlon | 5.25.18

What marketer doesn’t dream of sky-high retention rates? For zulily’s Erica Yamamoto and her team, a 91% repeat customer rate is a reality — one brought about by the etailer’s commitment to creating a unique, personalized, and entertaining experience for every one of its 6.1 million active customers.


One way zulily accomplishes this is by blending elements of marketing and customer experience (CX). Yamamoto, director of lifecycle marketing and customer experience, steers that blended approach. She and her team oversee cross-channel marketing (including in-app experience, notifications, and email), engagement programs, and testing and launching new customer programs, such as zulily’s private label credit card. “We’re a combined team focused on building long-term relationships with our customers,” Yamamoto says.


In a conversation with MKTGinsight, Yamamoto explains how combining specific elements of marketing and CX over the past year and a half have helped zulily reach a record number of active customers and an exceptionally high repeat-customer rate.  

The zulily shopping experience is all about discovery. Every day the etailer launches about 9,000 new products across a broad range of categories, curated into “events” (i.e., limited time sales that typically run for 72 hours). Launched as a daily-deal site for moms, babies, and kids just over eight years ago, the etailer now sells everything from apparel and beauty, to home furnishings and décor, to pet supplies. “Over time we tested things like women’s fashion, home products, beauty, electronics,” Yamamoto says. “We find that if there's value and if it's a great product and a brand that she's interested in, she'll buy it. Our customers love shopping and browsing and love the thrill of finding a great bargain.”


That many products could be overwhelming to even the most avid shopper. So, zulily uses personalization to tailor each visitor’s experience. The data science team built a personalization recommendation engine powered by machine learning and eight years of customers’ behavior data, such as what a shopper is clicking on, how previous visitors have behaved relative to that shopper, what platform she’s coming in from, and how much time she’s spending on the site. “Hundreds of different inputs drive this engine,” Yamamoto says. “So, even if you only spend a minute with us on the site, we can engage you as quickly as possible…and tailor the whole experience for you.”


Zulily listens and responds to customers in other ways, as well. For example, Yamamoto and her new-programs team tested and launch the etailer’s first-ever returns program and its first private-label credit card based on customer feedback. (The etailer has already secured more than 160,000 accounts for the credit card since its launch in Q317.) “The program managers are testing, iterating, launching these new programs based on the feedback we’re getting, and then they partner with our channel specialists,” Yamamoto explains. “The channel managers then brand and tailor content about the programs in a way that makes sense for their channel — whether that's email, push notifications, in app experience, etc.”


From insight to action

Yamamoto is a big fan of testing, so her team has been using it to optimize response to the credit card program. Since zulily launched the program last September, with the goal of driving loyalty, Yamamoto and her team have tested areas such as discounts (e.g. $15 off your first purchase as a card holder), interest-free payment plans (i.e., Smart-Pay), and other financing options to encourage initial applications and ongoing use. “We'll say, for example, “You can get two Smart-Pays over $49,” or “Spend $75 on the card and get four free tickets on Fandango,” and see what happens to basket sizes and new customer conversion,” Yamamoto says. “We learned a lot from that, so we were confident when we launched the card that it would add a lot of value. And we've seen that proved out in the numbers: More than 100,000 customers signed up by the end of Q4 2017 and we're continuing to see those customers spend so much more by having that option.”


Yamamoto’s affinity for a test-and-learn approach extends to optimizing channels, as well. A big part of zulily’s marketing strategy is “thinking about how we tailor the content and our personalization data based on the channel you're on,” she says. “Email is a great example. It’s one of the strongest channels we have. We’re lucky because every day we have something new to talk about. Most other retailers don’t.”


Until recently, zulily launched all its events at 6 a.m. PT each day. “We wanted that initial frenzy in the morning to drive a lot of traffic and get people excited; get them shopping on our site as they're drinking their coffee,” Yamamoto says. “But we found that our super loyal customers were coming back multiple times throughout the day and we didn't have anything new for them.”


That prompted the etailer to launch a daypart strategy about six months ago, which it uses in addition to its 6 a.m. PT event launches. “So, now every afternoon we have fresh content — whether it's a Deal of the Day product that we showcase at a super discount or our Flash Finds, where every hour for 12 hours we'll launch something new,” Yamamoto adds. “Having that fresh content is like visiting a new site, motivating customers to come back. That's what we want. That's the typical engagement we're trying to drive.”


And if email isn’t a customer’s channel of choice in the afternoon, zulily will try mobile. “We look at engagement holistically,” Yamamoto says. “If she's not engaging with email, is she engaging with our app? When are we sending her notifications that she engages with?” For example, if customers haven't engaged with an email or notification in the morning, zulily will send a push notification in the afternoon with new content in the recipient’s local time. “We've found this optimal time where people are typically engaging on mobile, so we're trying to tailor when we're sending those notifications,” she adds.


Change happens...if you make it

Responding to customer actions is in zulily’s DNA. That’s evident in the etailer having combined the customer experience and lifecycle channels teams. “It's been powerful to have both teams together,” Yamamoto says. “It’s a fundamental change.”


It’s also evident in the etailer’s focus on analytics. Along with having a large, centralized team of data scientists and analysts, zulily has invested in making sure that each function is empowered to self-serve their own data. “We have an analytics team within marketing,” Yamamoto says. “But on top of that we empower and train our marketers to be able to self-serve and act on data day to day. Every specialist on my team knows how to use SQL.”


The reality is that all companies face infrastructure and capacity constraints. So, Yamamoto explains, the idea is to work with data scientists and analysts where it matters the most; for instance, with real-time data. Is the website running? Are orders being placed? Are visitors able to log in? And, when it comes to campaigns and programs, marketing specialists can self-serve because they don't need everything in real time.  


Zulily is constantly evolves its technology to respond to customers, as well. For example, the etailer developed a homegrown tool that Yamamoto’s team uses to decide how to reach out to customers, on what channel, and how frequently. “I actually have a tech team of six engineers that supports our lifecycle tools,” she says. “We work closely to ensure that we’re building the tools in a way that makes sense for our business…and optimizes every single dollar that we're using in digital marketing.”


Yamamoto and her team also have been testing video on content pages over the page six months or so. In most cases, images are sufficient, she points out. “I know what Legos are. I know what Spanx are. I don't need a full video to explain them,” she says. Then there are products like The Tucker. In a photo it just looks like a $12.99 dustpan, but the video shows how it tucks in the corners of bedsheets. “So, video is definitely a capability we are investing more in to on the front end.”


Zulily has been using an AI chatbot on Facebook, primarily for order status and tracking, but it's also a way for customers to communicate with customer service. It’s gone so well that the etailer is now doing some marketing on the platform, as well. Much of that is announcing when items are coming back in stock. In addition, zulily launches new content daily on Facebook Live. “It's been great way to engage with our customers and to get real-time feedback,” Yamamoto says. “If you watch the comments, some customers have favorite hosts, which is funny because the hosts are our employees: buyers and people in marketing who want to have some fun.” That real-time feedback has been invaluable in enabling zulily to work with vendors to increase inventory availability on items getting a great deal of positive feedback or going viral — and increase sales and customer satisfaction in the process.


Marketing and CX add up

The marketing-CX marriage exemplifies zulily’s mission of ensuring that each customer has fun, unique, and relevant experience. And it works so well because relevance is central across all of zulily. Says Yamamoto: “We use personalization and data in every aspect of our business.”


Combining marketing and customer experience has helped zulily achieve some stunning results as of Q1 2018:  


  • 6.1 million active customers; active customers grew 24%

  • Over 160,000 zulily-branded credit card accounts opened since the card's launch in September 2017; more than 50K new branded credit card accounts during Q1 2018

  • 70% of orders came from mobile devices

  • 91% of orders came from repeat customers

  • Over 100 new sales and 9,000 products typically launch each day

  • Net Sales for Q1 2018 was $419 million; zulily revenue grew 17%

  • Net Sales for Full Year 2017: $1.6 billion (FY17)

  • Over 5 million fans on social media across Facebook, Instagram, Pinterest, and Twitter; from 2016 to 2017 Facebook Messenger alone grew YOY by 57% and now engages with more than half of zulily’s active customers

About the Author

Ginger Conlon, chief editor and marketing alchemist at MKTGinsight, catalyzes change in marketing organizations. She is a frequent speaker on marketing and customer experience, and serves in advisory or leadership roles for several industry organizations. Ginger was honored with a Silver Apple lifetime achievement award for her contributions to the marketing industry.

Find her at @customeralchemy and on LinkedIn.