E-Commerce Firm Dearduck Uses A.I. in the Hunt for the Perfect Gift

Xconomy Texas — 

Houston—Knowledge is power, but too much of a good thing can render data meaningless.

That’s the struggle many retailers have in an age of data analytics. Think about the retailer e-mails we receive daily or the ads that appear on Google or our social media sites. Though based on our Web searches, those ads don’t necessarily represent what we would like to buy.

“Retailers are not only wasting so much money targeting us with bad data, consumers get frustrated,” says Katy Aucoin, founder and CEO of Dearduck, a Houston e-commerce data startup. “Retailers end up distancing themselves from customers when they’re spending money trying to strengthen those relationships.”

Dearduck uses artificial intelligence and analytics software to upgrade from the days when people shared Amazon Wish Lists in order to help inform others about what would make the perfect gift. The company is part of a recent wave of startups using A.I.-related technologies to try to personalize shopping experiences, whether we’re buying for ourselves or others.

Dearduck offers quizzes that tap into consumer preferences like “Foodie Faves” or “Pamper Your Pup” that will give others insight, say, that not only do you enjoy wine but a specific type of French rosé. At the end of the quiz, Dearduck offers product recommendations.

Aucoin says based on more than 100,000 quizzes taken, she found that no two people had the same set of preferences, which she says points to the need for individualization—particularly when it comes to gifts. “Eighty percent of consumers are buying for someone else,” she says. “People love knowing other people and what they would like.”

For brands and retailers, such a service could be a way to help make the online purchasing experience more personalized. Even as shoppers purchase more online—global e-commerce sales exceeded $2 trillion in 2017, and are on pace to more than double by 2021—average online conversion rates remain low, according to Statista data cited by the Harvard Business Review. Fewer than 4 percent of buyers on desktop browsers complete a purchase, and the rates for tablet and smartphone users —3 percent and 1 percent, respectively—are even lower. Store conversion rates are between 20 percent and 40 percent, the publication reported.

Since its founding in April of last year, Dearduck worked with the Circular Board virtual accelerator (now known as Alice) and became part of the RealCo accelerator program in San Antonio last year. The company started as a consumer-facing firm, targeting individuals as customers. But, in December, following the raise of a $1 million seed round from investors such as Alice, RealCo, and angels in Houston and Austin, Aucoin says, she made a pivot with Dearduck to concentrate on working with brands and retailers that want to better target their customers by white-labeling Dearduck’s service. The startup is currently doing pilot programs with retailers such as Mouth, PupJoy, and WinkyLux.

For example, Aucoin says, a retailer like Kendra Scott could offer Dearduck quizzes created for the jewelry maker. “Then you type in a name, and [the e-commerce site] filters that website based on that person,” she says. “We can power the right recommendations to the right people at the right time.”