Michele Nemschoff, Persado Senior Vice President of Marketing, recently interviewed Amanda Bopp, Vice President North America Marketing & eCommerce at Kate Spade, during the CommerceNext 2023 Ecommerce Growth Show in New York City. The breakout session, How Generative AI Enhances Retention and Loyalty at Kate Spade, focused on the advantages of increasing customer retention and loyalty with Generative AI.
Known for chic clothing, shoes, jewelry, home decor, and tech accessories, Kate Spade is a sub-brand of Tapestry, a global luxury house of brands, with sales of $600 billion a year. Led by Amanda and in collaboration with Tapestry’s Digital Center of Excellence, Kate Spade New York’s marketing team relies on Generative AI to optimize language across touchpoints. AI-generated language helps the brand create more joyful customer experiences, while boosting revenue and customer loyalty.
Here, we offer a recap of the discussion framed around the questions that Amanda answered during the session.
How did the digital transformation at Kate Spade begin?
In 2020, Kate Spade kicked off an enterprise-wide transformation based on three core tenets: 1) Sharpening our focus on the consumer; 2) Better leveraging data and embracing the digital mindset; and 3) Creating a newer and more responsive organization.
However, the digital transformation began in 2019 when the Kate Spade marketing team began experimenting with email subject lines through the Persado Motivation AI Platform. It was an exciting time of testing, learning, and evaluation that resulted in double-digit increases in all of the email engagement KPIs.
How has Generative AI provided the insights, data, and the personalized language to help Kate Spade on this customer loyalty journey?
We started with the basics by looking at the email subject lines. When the language became more relevant to the consumer, it encouraged engagement, such as opening an email. The program expanded because of its initial success. In the process, a variety of different touch points across the target ecosystem came into play. Not only did we identify words that resonate with the consumer, we also synchronized these words with emotions.
This dynamic remains important for all brands, particularly those in the fashion and accessory space, since most of these sales are based on emotion.
No one needs a $400 handbag. Brands that rely too much on function actually miss some of the magic needed to complete a purchase. In our work with Persado and leveraging customer retention and loyalty with Generative AI, we balance not just the words but the emotion. The more testing that the Kate Spade team did across all of the market touch points, the smarter we got about the language, as well as the sentiment behind it, to help us better connect with customers.
Can you provide a specific example of improving retention and loyalty with Generative AI?
Kate Spade customers went crazy over a shaggy dog handbag, Kate Spade Showdog Fringed 3D Dog Crossbody bag, which sold very well. The right language communicates why this bag is so exciting for customers. That became a critical factor in creating an emotional sentiment.
The team also leveraged one of the better-performing tactics. This involves ads on Meta in collaboration with dark-dynamic ads on Meta, where the Persado AI-driven language helps connect the right sentiment and right words with the right audience.
Persado also discovered that the Kate Spade shopper really loves an emoji. This handbag is one example of how we can take a product that’s super emotional and leverage science to help us determine the best way to present it to a customer.
Do you think the Kate Spade brand voice is affected by Generative AI?
The Kate Spade New York brand voice remains very precious, since it’s something that our customer knows and recognizes. At Tapestry, these discussions revolve around magic and logic. With Persado, we take the brand guidelines and leverage them with Generative AI to create a Tapestry-specific algorithm that everyone is comfortable with and which also accurately reflects our brand voice.
Through our partnership with Persado, we learned that our customer responds well to Gratitude and Intimacy language (these are emotions tagged within Persado’s knowledge base).
Before adopting Generative AI in 2019, our internal team developed messaging that wasn’t as optimistic as some of the language we use now. (Think: This sale is ending soon.) By trying to create a sense of urgency, we may have initiated a tone that was potentially more aggressive than intended.
The team learned from Persado that the Kate Spade customer really responds to messaging that’s a bit softer and feels more upbeat, which remains consistent with our brand.
What else did you learn?
Evaluating data collected by Persado, we learned that Kate Spade customers respond better to holidays, which isn’t surprising since we are a celebration brand. For example, consumer-driven holiday messaging such as, This is the best gift for Valentine’s Day works very well as opposed to typical seasonal language. We’re also encouraging our shoppers to indulge. Persado discovered the right language that motivates the shopper to purchase a luxury item.
How do you empower your marketing team?
In a digital business and digital ecosystem, there are so many levers to pull, different campaigns to run, and data to ingest. The best outcomes occur when the team feels empowered to own and drive their particular slice of the business within the context of the broader brand standards. For example, our email marketing team clearly understands their traffic conversion and demand goals. Because they are accountable, this team enjoys Amanda’s full support to experiment and push forward with ideas that help move the needle and drive Kate Spade in a brand-safe way. Promoting accountability of the business metrics actually boosts creativity.
AI has become sort of a buzzword. For digital leaders, marketers, and brand managers, it’s about deciding what we control versus where do you let the machine and the science take over. Watch the full breakout session here.
What to learn more about the Persado Motivation AI Platform and how to enhance customer retention and loyalty with Generative AI? Request a demo.
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