Nosto gets personal about e-commerce
Ever wondered how an online store chooses the products it recommends to you? Nosto has the answer. In four years, the Finnish company has grown into a veritable e-commerce giant with customers in 167 countries.
Online shopping is a huge business with an estimated global value of 1.86 trillion US dollars. No wonder retailers are constantly searching for ways to make the digital experience smoother, more engaging and personalised. This is where Nosto and its self-titled product steps in. In 2013 it became the first company in the world to launch a platform-independent e-commerce personalisation tool.
“We thought online stores should be inspiring places where you can find relevant products, instead of just scrolling through an online catalogue,” says Juha Valvanne, Nosto’s co-founder. “What we today offer is a personalised shopping experience across several different channels and devices.”
This is provided by Nosto’s cloud-based software. An online retailer can easily set up the software themselves and use it to automate personalised recommendations across all their channels from the web and mobile sites to Facebook and Instagram. The more data Nosto’s algorithms collect on shoppers’ behaviour, the better its recommendations get.
Hunt for a super seller
The idea for Nosto came from Valvanne’s own experiences in e-commerce. After founding several successful online stores and advising others, he grew increasingly frustrated with the existing marketing tools.
“If you had a good salesperson in a physical store, they could easily identify a customer’s needs and recommend products, but this wasn’t possible online,” Valvanne recalls. “We started to think how this ‘super salesman’ could be transferred into the online world.”
When Valvanne speaks of ‘we’ he is referring to Nosto’s co-founders Antti Pöyhönen and Jani Luostarinen. The trio found a way to use customer data to automate product recommendations, but problems arose when they wanted to make their product platform-independent and easy to implement.
“We wanted to make it work with any technology your online store is built upon,” Valvanne explains. “But it was quite a challenge. We built the product in seven different ways before we got there. We felt we had achieved something really cool.”
This feeling solidified after the trio commissioned research on not breaching patents. The findings? They had an unique technology on their hands. Nosto was founded soon afterwards, in mid-2011, to develop the technology further.
Today Nosto’s technology is protected with two patents and holds the largest market share in personalisation globally. The company is also the ‘preferred partner’ of some of the biggest e-commerce platforms in the world, including Shopify Plus and Magento, and in April it was made an official marketing partner by Facebook.
Global markets were Nosto’s target from the start. It quickly expanded from its headquarters in Helsinki to London, Berlin, Stockholm and New York and is opening its second US office soon. Valvanne believes physical presence is crucial even in today’s digital markets.
“Internationalisation takes a lot of footwork,” he explains. “To succeed in different markets, you really have to be able to live and breath those markets.”
Nosto already has users around the globe, but in future it hopes to invest more in Asia, Latin America and the US. An extra boost for these plans came in June, when the European Investment Bank (EIB) granted the company 15 million euros in loan-based funding. This is earmarked for market expansion, product development and growing its 100-strong team.
“The way consumers meet and engage with brands and buy products is changing fast,” Valvanne says. “If we play our cards right, we can build very interesting solutions on top of our current product and data.”