How AI boosted LeSportsac’s sales by 12 percent

After pulling out of its wholesale retail partnerships last year, LeSportsac is seeing direct e-commerce sales spike thanks to an artificial intelligence-powered personalization strategy.

The accessories brand, which was founded in 1974 and was acquired by Japanese holding company Itochu in 2011, relaunched its website in January of this year, overhauling the experience alongside the brand’s motions to boost direct sales. It worked with AI firm Nosto to build out a real-time data feed with insights into customers’ site behavior and demographics, which is informing email marketing and social media advertisement strategies, as well as design and collaboration decisions. LeSportsac also added a few table-stake features to the website with the relaunch that were previously missing, like free shipping and returns.

LeSportsac’s AI strategy has driven e-commerce sales up by 12 percent, with an average order value increase of 10 percent. Website click-through from email has increased by 30,000 per month since launch. (Itochu doesn’t break out brand-specific sales figures.) The current site only ships in the U.S., but is being looked at as an e-commerce blueprint, which can be adopted by other regions, namely Japan and China, which are two of its biggest markets.

“What we wanted to see was what type of customer was coming to the site, from age group, gender, location — we didn’t have that customer information previously,” said Berly Isaak, LeSportsac’s senior director of global marketing. “We were able to see in real time what their search and purchase patterns were, which helped us figure out the psyche of our customers as they shop us.”

Owning customer data, and being able to understand and act upon it, has become a top-of-mind priority for brands that have traditionally sold through wholesale partners. LeSportsac, is following in the footsteps of other brands and retailers that have used AI to make data processing easier and customer segmentation smarter, including luggage brand Tumi and lingerie brand Adore Me.

“When you’re dealing with millions of customers, you can’t decipher cognitive behavior at scale,” said Omer Artun, the CEO and founder of AI platform AgilOne. “AI changes the rules of business by recognizing a pattern and providing context around not only what people are buying and why, but what they’re not buying and why.”

The new site sends real-time customer behavior data to LeSportsac’s marketing, merchandising and design teams, which can then monitor trends and react to them much faster than before. While the brand still designs collections about a year in advance, it can immediately act upon trends shown in the data, like what add-on products (like a cosmetics or garment bag) people are most likely to buy with the purchase of a bag due to recommendations, and what’s performing. For instance, LeSportsac releases one to two collaborations per season, and with early customer behavior insights, it learned that novelty items (a bag shaped like a Gameboy, for instance, which was released with a Nintendo collaboration) sell out first, and so it can promote them correctly. Isaak said she regularly meets with Lesportsac’s creative director and design team in order to confer on trends and double down on high-performing products. All bags are designed through the in-house design studio, and Isaak said the goal is to be able to get items from conception to market in a shorter time frame, based on customer data.

“Now we’re getting real-time information, which is invaluable,” said Isaak. “We’ll be able to use this data for upcoming collections. As we think about the future, we should tailor our design in a specific way that reflects this customer. They should feel like they’re part of the brand.”

The new data strategy is also informing the brand’s email marketing and social media strategies, thanks to better targeted messaging based on customer segmentation. With insight on how many customers purchase from the brand at least once per month, for example, the brand is building out a VIP program that will send exclusive offers and early access to new collections via email.

Since LeSportsac eliminated its wholesale network, the pressure is on to successfully parse the data and improve sales. It’s a risky move that other wholesale brands hoping to increase direct sales have largely avoided, as cutting off all wholesale business at once can kill a majority of sales. To supplant the loss of third-party sales, LeSportsac has focused on expansion in Japan and China, where it has separately owned e-commerce sites and sales on platforms like Tmall and JD.com, and the brand also has continued selling as a vendor on Amazon.

For now, as the brand uses the U.S. site’s performance as a testing ground for future global expansion, it’s seeing potential.

“The beauty is that there’s so much opportunity. We’re just now starting to push all traffic to our e-commerce site, and now, with the AI investment, I can look back on something like a collaboration and tell our parent company how and why a partnership was successful. That type of measurement makes a huge difference,” said Isaak.

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