KELLNER: Web buying to become closer to real shopping

By Mark A. Kellner | Monday, July 28, 2008

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The faint stirrings of direct marketing that saw 19th-century railroad clerk Aaron Montgomery Ward sending out circulars advertising watches and other trinkets have grown into Amazon.com, but if you regard the Web site as the ne plus ultra of personalized online commerce, you might want to reconsider. There's much more to come.

RichRelevance.com, a San Francisco-based firm headed by the man who refined Amazon's product recommendation system, is moving to make your shopping experience even more personal, while not compromising your privacy. The goal is admittedly commercial; the firm wants to help online marketers sell more products. At the same time, they hope to make your shopping experience a bit more life-like.

"The real power in shopping for a consumer is [in] 'turning my shopping experience into something I enjoy,'" said David Selinger, founder and chief executive of the firm.

A Stanford University computer-science graduate, Mr. Selinger led the team that boosted Amazon.com's profits to more than$50 million in 2003 through enhancing the way recommendations are generated for online shoppers. He later went to Overstock.com and has continued to refine the process there and elsewhere. Now, RichRelevance is serving companies that generateat least $10 million a year in online sales. Interestingly, the one client he's willing to name is Sears, thenamesake of the early mail-order catalog pioneers who followed Montgomery Ward in creating an industry.

Making online shopping more enjoyable involves more than a little science. Anyone can click on a Web site's catalog listing and, presumably, find an item and buy it. But, in real world stores and malls, few shoppers are merely linear beings who make a beeline for an item. When we go to a Barnes & Noble outlet, for example, we'll look at a Harry Potter volume, then check out a cookbook or the music section. Mr. Selinger argues that, online, we should be steered toward doing the same thing.

A word about privacy is in order here: RichRelevance will help track what you look at and where you are computing from - Are you logging in from McLean or Marlow Heights? - but the firm's software observes privacy laws: the tracking and analysis is to guide you toward products, not to poke around your life. With such parameters, I have no problem in accepting online recommendations.

"We bring to the table a scientific approach to 'how do we find products that would be relevant to the customer?' " Mr. Selinger explained. The RichRelevance software and proprietary algorithms are paired with the knowledge an online seller already has. If, for example, Sears notes that customers looking at refrigerators online will also likely buy baby stuff - growing families may well need a new icebox, after all - then that inside knowledge is linked to the formula.

"That knowledge lives in the merchandising group," Mr. Selinger said of a client such as Sears. In designing services for the online marketer, he believes he is "bringing the art and the science together, the science being the algorithms in the software and the art being the merchandising knowledge."

Write to Mark Kellner.