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EXCLUSIVE: Rugs Direct personalizes online customer experience with AI

Sharon Gautschi
Sharon Gautschi, chief merchandising officer, Rugs Direct

A specialty online retailer of decorative area rugs is utilizing artificial intelligence to better tailor search and discovery on its e-commerce site.

Rugs Direct carries a broad assortment of products and has a varied customer base including consumers, professional designers and commercial customers throughout the U.S. and Canada.

Chain Store Age recently spoke with Sharon Gautschi, chief merchandising officer of Rugs Direct, about how the retailer leverages the Constructor AI-based product discovery platform to help shoppers find the products that best fit their specific needs.

What merchandising issues was Rugs Direct facing?

We carry more than 20,000 items and 130,000 SKUs in our product catalog across 11 categories. With such a large product catalog of rugs and complementary décor, such as pillows, throws and wall art, we cater to shoppers with many different needs, interests and aesthetics. 

It’s important to make it easy for everyone on our site to find what they love for their design and decorating projects. Our site merchandising approach is to guide the customer through education and inspiration. 

Inspiration often encompasses showing individuals attractive products and design ideas that spark excitement and connections. And we can educate our customers through our content, technology-guided experiences and even product attributes.

Rugs Direct had a legacy search and product discovery solution that wasn’t supporting our ‘education and inspiration’ approach. As we grew, it wasn’t able to grow with us. 

For example, the legacy solution didn’t effectively support sorting products, such as based on popularity, newness, or a shopper’s history. Our internal technology team had to bring a lot of firepower to the tool, and that’s not where we wanted to focus our efforts. 

How and why did you select and implement the Constructor solution?

We were nearing the end of our contract with the legacy provider and had been evaluating other vendors at the time but found they couldn’t handle our product catalog well. We merchandise based on a parent level as well as a SKU level, and the other platforms we looked at were going to have to process our data in a more clumsy, roundabout way. Constructor had no trouble with this, though. 

We use Constructor across the Rugs Direct site to power product search functionality including autosuggest, filtering and sorting the search results shoppers see; as well as browse experiences and landing pages. Constructor enables visitors on our site to see attractive products and results that match their intent.

I also appreciate how Constructor gives us the ability to ‘boost’ and ‘bury’ products based on attributes like brand and construction type across search, browse and autosuggest. 

Before Constructor, I could only slot them, so the experience was much more static. The sort was driven by a formula that we wrote and were feeding to the tool. Now, I can better align what gets displayed to attributes such as promotional strategies, inventory management, seasonal trends, and shopper preferences.

Constructor’s "Collections" functionality, especially, has changed the game for us and driven great engagement. This lets us bring product collections to life with tailored and dynamically curated landing pages. We often assemble seasonal collections based on trends and ‘editor’s picks’ collections, as well assortments designed to appeal to niches, like durable outdoor and RV rugs.

Our vendors do photo shoots to highlight these trends, and with Constructor, we can build a cohesive experience around the products to tell a story. We use Constructor to set parameters for the products to display on our landing pages, and Constructor’s AI and automatic rules help determine the best products (and the order of them) to show individuals. 

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What have the results been?

Constructor’s platform lets us optimize experiences for e-commerce metrics that matter to us, like average order value and conversion. Using Constructor on the Rugs Direct site drove a 13.5% lift in revenue per visitor, as well as a 16.5% lift in average order value.

Are there any future plans for the technology or merchandising you can discuss?

We’re always looking to enhance the customer experience based on our ‘education and inspiration’ merchandising approach. 

One new capability from Constructor that we’re really excited to take advantage of from a merchandising perspective is their attribute-based slotting. With traditional product slotting, on a product listing page, you slot which products go in which positions. 

You could create a rule, for example, that you want one particular new item to show up in position 3 for the next couple weeks so it’s highly visible. Constructor’s attribute-based slotting gives us a lot more flexibility.  So if  I’m merchandising a "blue rugs" page, I can specify that I want any blue item with the new attribute to appear, while letting Constructor determine which new item to show each shopper based on his or her affinities. 

I can do the same thing when I slot vendors in various positions, letting Constructor decide on the item from each vendor based on what the shopper likes, as well as our inventory and metrics we want to optimize for. This approach also makes sure that our slotted products won’t get stale. 

[Read more: Authentic Brands Group optimizes online customer experience with AI]

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