Retailers Get Personal With Consumers – And It’s Paying Off

Personalisation pays. Boston Consulting Group found brands creating personalised experiences are seeing revenue increase two-to-three times faster than those that don’t. Gartner predicts a 15% profit boost by 2020 for brands that successfully personalise e-Commerce. And a Google exec speaking at Shop.org predicted that over the next few years, $800 billion in sales will shift toward e-retailers that use site personalisation — and away from those that don’t.

Measures of customer attitudes toward personalisation make it clear that preference for a more bespoke relationship with retailers and products will only increase.

• 79% of consumers said personalised service from a sales associate is an important factor in determining where to shop, according to BRP.
• 41% of consumers switched companies last year over a lack of trust and poor personalisation, costing businesses $756 billion, per research from Accenture.

The personalisation trend can be seen across the retail spectrum, from monogramming at the Polo Ralph Lauren on Regent Street to fast fashion retailer Missguided’s personalised app experiences, credited with increasing conversion rates by 34%. Retailers effectively leveraging these capabilities are increasingly delivering personalisation in real time, developing automated capabilities to collect and instantly act on data to deliver personalised experiences.

To achieve those results, retailers must identify the personalisation strategies that work best for their brand, assortments and customers, and keep several important lessons in mind.

Getting Personal

Personalisation takes many forms. What retailers typically call personalisation involves tailoring sales and marketing communications and shopping experiences to a shopper’s individual tastes and preferences. Customisation often speaks to the ability for a customer to specify or configure the characteristics or design of a product, like a monogram or a bespoke athletic shoe design. Curation often refers to presenting an assortment of products selected to suit the tastes of a specific consumer.

Successfully implementing these experiences often requires an investment in an array of data collection, customer identification/stitching, CRM, analytics and sales and marketing applications or services. It also means heeding these lessons:

• Be cognisant of privacy (and don’t be creepy). Consumers vary in their willingness to trade personal data for a personalised experience, often along generational lines. According to Forrester, 17%of consumers still aren’t willing to share data at all. More than half (52%) of shoppers are concerned about retailers knowing too much about them, and that percentage jumps to 59% for higher-earning households. Similarly, 46% of consumers are uncomfortable with the amount of information that retailers can collect about them, while 53% of higher-earning households agree. Retailers must obey GDPR and other privacy and security regulations, and gain permissions where needed.
• Consider production and logistics, including reverse logistics. Consumers still want products fast, even if they’re being produced just for them. Makers of manufacturing equipment are working to find solutions: Opening Ceremony and Christopher Ræburn use industrial knitting machines from London-based manufacturing platform Unmade to produce custom knitwear within hours. U.S. designer brand Eileen Fisher co-developed a 3-D knitting machine with Shima Seiki that creates a bespoke garment in 45 minutes, according to Wired, which also reports that Amazon received a patent for an on-demand manufacturing system that produces goods in batches based on factors such as the customer’s shipping address. Retailers must consider the impact on shipping timeframes in formulating their own fast production processes. That includes reverse logistics since bespoke products that don’t meet customer expectations will require special handling and likely, discounting.

Personalisation strategies must be tailored to the individual needs of each retail brand. Click To Tweet

• Leverage location data. Catering an offer based on a shopper’s location can be extremely powerful; a coupon delivered as the customer passes by a store is much more valued — and redeemed — than one delivered randomly. According to IHL, location-based marketing is getting the biggest share of retailers’ emerging tech budgets in 2019.
• Ensure omnichannel communication. Consumers seeking personalised experiences and custom products bring those same expectations to communications with a retail brand. Retailers must be prepared to access a customer’s individual history, preferences, loyalty status, promotion eligibility and more in real time, via whichever channel the consumer chooses. To deliver satisfying customer contact, agents must be able to see orders related to custom products and the same curated assortments the customer is viewing. It’s essential to integrate customer contact centre software into the tech stack that supports personalisation.
• Consider Creating Videos for Your Audience. Perhaps you decided to create a video to boost your content marketing strategy and engage with consumers. When you think about communicating through video, it’s no longer about having an ad that captivates others. It’s about having a video that is entertaining and engaging to watch. As well, having content that competes with other big brands who are bringing in consumers. But, you need to put in the time and stay focused on executing it, or it won’t be successful.

Personalisation is hot, with a growing list of success stories feeding retail enthusiasm for gathering and leveraging data on individual shoppers. But just as with the shopper, personalisation strategies must be tailored to the individual needs of each retail brand. With a well-conceived approach, retailers can deliver dynamic, real-time personalisation at scale to drive higher conversion rates and a healthy bottom line.