Bluecore raises $125M to drive retail customer retention with big data
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Bluecore, a marketing technology company that helps some of world’s biggest retailers “transform casual shoppers into lifetime customers,” has raised $125 million in a series E round of funding at a $1 billion valuation.
Founded in 2013, Bluecore helps direct-to-consumer (D2C) retailers match first-party shopper data with product interactions, enabling them to design personalized mass-marketing communications through email, ecommerce platforms, and other digital ad channels. The New York-based company works with hundreds of enterprise-grade retailers, including Gap, Nike, Teleflora, Tommy Hilfiger, and CVS Pharmacy.
The problem that Bluecore is setting out to solve is the age-old conundrum of how companies and brands can improve their repeat custom metrics. Retention, ultimately, is the name of the game.
“There are a number of challenges for retail, but if you peel back the layers and look at the core, the primary issue is that 80% of customers only ever buy from a retailer once,” Bluecore CEO Fayez Mohamood told VentureBeat. “This is particularly an issue for enterprise retailers, because the larger a retailer gets, the larger the revenue potential that lies in retention is.”
While retailers of all sizes naturally want loyal customers, Mohamood argues that the stakes are higher for larger ones such as Nike, Gap, Foot Locker, Lululemon, and Jockey — brands that have stood the test of time and evolved.
“If you look at brands that have endured, you’ll realize that they’re the ones that people keep buying from,” Mohamood said. “This isn’t random — they’ve made retention and shopper loyalty a key strategy for revenue growth.”
Data: the new oil
Technology plays a major role in helping companies not only “go digital,” but scale through leveraging vast swathes of data. That is what Bluecore is all about — driving revenue by growing “purchase frequency, cart size, and conversions through personalization,” according to Mohamood, which involves meshing real-time shopper data with product data in a single system.
Bluecore captures shopper activity such as what they’re searching for, clicking on, adding to carts, abandoning, and so on, and combines this with other data such as in-store transactions. This culminates in the amalgamation of disparate data sets into a single unified view spanning shopper identity; shopper behavior; and product catalog.
“Using this data set, we can immediately automate actions across channels with the goal of continuously creating matches between each individual shoppers and the products they’ll love,” Mahmood said.
Bluecore’s platform constitutes three main elements: Bluecore Communicate, which is concerned with automating personalized customer communications; Bluecore Advertise, which uses predictive modelling to target both new and existing customer segments on paid media channels such as Facebook, Instagram, and Google Ads; and Bluecore Site, which uses predictive signals to deliver personalized marketing campaigns.
At the heart of these products is data, which has often been described as the world’s most valuable resource today — more so than oil — given the role it plays in driving all manner of business decisions.
“When traditional retailers go digital and digital brands scale, they have to focus as much on customer retention as acquisition,” Mohamood continued. “Fortunately, digital offers a data-rich environment for connecting shoppers to the next-best product that gets them to buy again and again.”
Above: Bluecore: Discount purchases over past 12 months
Show me the money
Prior to now, Bluecore had raised around $113 million, and with another $125 million in the bank from investors including Georgian, FirstMark, Norwest, and Silver Lake Waterman, the company said it’s now well-financed to invest in further ecommerce product development and in AI and analytics.
More importantly, Bluecore is also better positioned to challenge legacy marketing clouds from the likes of Oracle, Adobe, and Salesforce with a more targeted offering built specifically for direct-to-consumer (D2C) retailers.
“We built our technology for the world of online shopping — and more specifically, for the unique use cases of retail, such as the need to create repeat purchases, preserve margins and guide shoppers through product discovery,” Mohamood said.
Moreover, the global pandemic was a major driver of digital transformation, with countless traditional retailers forced into bankruptcy or downsizing their brick-and-mortar presence — it’s all about ecommerce now.
“In 2020, the whole world moved to digital shopping,” Mohamood added. “This was a major wake-up call to those omnichannel, enterprise retailers who still did the majority of their sales in-store and didn’t consider their ecommerce sites primary revenue generators.”
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