A CX Dilemma: Why THE YES Struggled to Select a Segment

If you’re an avid Pinterest user, you might have noticed that over the years, their algorithm for personalizing users’ feeds has become more and more precise, making it all the more addicting. You probably wouldn’t have guessed that you have THE YES, an AI-powered shopping app, to thank for these improvements.

In 2022, Pinterest acquired THE YES, but before this acquisition, THE YES was on its way to revolutionizing the average shopper’s customer journey and experience. But turns out — making a perfectly personalized shopping experience for every single user was no easy feat. So let’s break down one particular challenge they faced getting their platform off the ground.

Segmentation X Customer Experience

THE YES was an innovative shopping app developed in 2020, meant to create a personalized, interactive, gamified shopping experience for its users. The app utilized an AI-driven algorithm that honed in on individual users’ initial quiz-based preferences and gradual shopping behavior, so that over time, their feeds would become more and more personalized to their exact desires and needs. Think Tiktok, Hinge, or Tinder, but for shopping.

But obviously, creating an app entirely focused on CX wouldn’t be easy. And soon enough, they ran into their first dilemma.

It’s true that THE YES should be able to personalize itself to any user, but every good company still needs a specific target market.

In the beginning, their goal was simply to reach an audience of avid fashion shoppers/lovers, but over time, they realized that this market could be split into many different segments with different traits. In the end, they had to choose between two segments:

The “Fashionista”

• Knows exactly what they want and are looking for
• Prioritizes freshness in product assortment and a personalized experience
• Doesn’t see shopping as a social experience
• Average budget is $250-500 for tops, >$500 for dresses

The “Fashion Follower”

• Prefers breadth of product offerings
• Prioritizes price, opinions of fashion influencers, and ease of discovery and  a larger product mix
• Views shopping as a social experience
• Average budget is $75-150 for tops, $150-250 for dresses

Clearly, there were contradictions between these two segments. And trying to appeal to both would be too costly.

This is exactly why, especially in the beta testing stage, an automated segmentation tool is essential not only for figuring out which distinct segments your business appeal to most, but also for looking at:

a) Which segment you can derive the most monetary value from

b) Which segment makes up the majority of your customer base, and

c) Which segment is more sustainable in the long run

Figuring out your one broader target segment, and breaking that down into even deeper, smaller segments, offers up tons of information about how to formulate the best overall customer experience. It’s only after doing this when you can utilize algorithms and AI-powered models to figure out how to customize customer experiences on a more individual level.

For example, THE YES’s entire business model revolves around providing a personalized experience for each user. However, this doesn’t mean they shouldn’t have a broader customer experience strategy.

Including interactive, gamified elements or a fashion influencer program might be an excellent addition to the customer experience for the “Fashion Follower” segment, but not so much so for the “Fashionista” segment.

The same logic applies when we think about product assortment. Too broad an assortment of clothing and price ranges might give the app a department store feel that the average “Fashionista” might hate, but that a “Fashion Follower” would love.

So, they had to pick ONE segment in order to stay consistent — and I’ll leave it to you to figure out which one they chose.

So What?

Just because companies can now personalize customers’ experiences using different AI-driven tools and models, doesn’t mean you can forget about the rest of the customer journey.

If your broader target market values convenience, prioritize investing in optimizing search functions, delivery, and speed — many AI-powered tools exist for these very purposes.

If your broader target market values luxury or exclusivity, differentiate your customer experience strategy from the typical retailer or department store — this could mean investing in self-checkout systems, enhancing virtual experiences, or making personalized product recommendations and accommodations for customers based on individual-level data.

Companies (like Cotera) are living proof that AI can be applied in tons of various areas ranging from segmentation, to marketing, to customer experience — all of which you’ll find are deeply intertwined, as is also conveyed by THE YES.