In case you hadn’t noticed, the relationship between consumers and retailers has changed. In the past, retailers always had the upper hand. They chose how much information to share, what price to set for products and where they wanted to sell. Retailers did this, rightfully so, because they could. Customers were loyal to brands regardless of these factors.
But over the past ten years or so, technology has completely changed the balance. Consumers today are in charge and more empowered than ever before. They demand information they feel entitled to know. They pay the price they want. They expect a product to be delivered to their doorstep. They aren’t loyal to brands, they’re loyal to experiences.
Why is a personalized customer experience important?
According to a recent study by Forrester, 68% of shoppers said, “I am unlikely to return to a website that doesn’t provide a satisfactory customer experience.” Shocking insights like these have prompted modern retailers to compete to provide the best customer experience possible. But every time a customer is exposed to an improved shopping experience, their expectations are reset to a new, higher level. This leaves today’s retailers in the position of always chasing the customer.
The good news for retailers is that there’s a way to get ahead of this rat race and avoid being displaced; and that is by providing a personalized customer experience. This means engaging customers as a segment of one, in real-time by listening, capturing, measuring, assessing and addressing intent across every touchpoint. This might sound like an incredibly daunting (and exhausting) task, but with the right personalization technology, it doesn’t have to be. With that in mind, here are a few ways to approach providing a personalized customer experience.
1. Identify gaps in your ability to deliver a personalized experience
Before retailers embark on the journey of providing personalized experiences, it’s important to understand that personalization is not a revolution, but rather an evolution. It is not a rip and replace solution. Personalization is an ever-evolving strategy.
The best way to deliver a seamless personalized experience is to put yourself in the customers’ shoes. Think about the gaps in their journey where your brand isn’t furthering its understanding of them as the customer. This could be something as simple as not asking for an email address at checkout or as advanced as finding all new insights by marrying product and customer data. Identifying these types of gaps in your personalization strategy will help you spot the biggest opportunities for improvement.
2. Design each digital touchpoint to enable personalization
Once you’ve identified your gaps, the next step is to make sure every digital touchpoint both collects and activates customer data. Your technology stack should be designed with the intent of continuously learning more and more about your customers and their preferences. With that in mind, when you’re evaluating technology tools, you should ask the question, “Are we going to be able to capture information about that individual customer?” If not, that solution won’t get you closer to a personalized experience — let alone one you can regularly optimize.
3. Consider every part of the customer journey
All marketers can be guilty of putting on blinders and saying, “I’m only in charge of email” or “I’m only in charge of social” or “I’m only in charge of in-store experience.” But in order to provide a cohesive customer experience, marketing organizations can’t operate in silos. Rather, they need to put their heads together to work on a single, cohesive strategy.
Your entire marketing team needs to think about how you can collaborate to create amazing experiences across channels. Implementing an approach on only one channel may seem better than nothing, but it can create a disjointed experience if the messages customers receive via email are radically different than the messages they receive on social media.
A single, unified personalization solution will help you break down these silos and create more effective campaigns. The key to delivering this type of experience is introducing a unified retail data model that allows you to bring together critical retail data on customers, behaviors and products and then activate that information seamlessly across channels from a single platform.
4. Use a Unified Retail Data Model
Retailers should use a data model that unifies customer, behavior and product data to create personalized experiences. Each type of data plays a special role in determining what motivates a specific customer to purchase a certain product:
- Customer data helps retailers determine who is taking action
- Behavioral data helps retailers understand when those customers take action
- Product data helps retailers identify what they are looking for
Product data in particular is essential, as it is the only way to provide relevant, truly personalized recommendations for each shopper. However, obtaining and analyzing product data isn’t intuitive — it often involves a deep dive into your entire product catalog to find relevant metadata.
That said, a retail-specific personalization solution that inherently uses a unified retail data model to create scalable, self-learning campaigns can ease this challenge and help deliver true 1:1 personalization. Key to this success is also the ability to continuously collect customer, behavior and product data in real-time so that the data used to power personalized campaigns accurately reflects changes in customer interests and product availability. In the end, this will help drive better performance with less effort from your marketing team.
Examples of Personalized Customer Experiences
According to Forrester, only 12% of retailers claim they are “very effective” at delivering personalized experiences to their customers. Because of this, it can be quite difficult to make heads or tails of exactly what a successful personalized campaign should look like. Let’s take a look at three retailers that have a solid retail personalization strategy.
The North Face: Confronting Gaps in Personalization
When The North Face looked at how they were interacting and engaging with shoppers, they realized that they were focusing more on the “what” instead of the “why.” For example, they would know that a person was looking to purchase a fleece jacket, but they wouldn’t know why. Were they going camping? On a ski trip? Maybe they were just looking for something warm to wear around the house?
All of these intentions were very different and for some purposes, a fleece jacket wouldn’t be the best product for that shopper. The North Face needed to reorient their strategy and pair the properties of their products with the behaviors of consumers. So, if a customer is planning a ski trip, they may be more satisfied if they purchased a warm, heavyweight jacket with wind resistant properties versus a lightweight fleece jacket. By focusing on the “why,” The North Face was better able to recommend products that were best suited for that shopper’s intent and, as a result, deliver a better customer experience.
Starbucks: Enabling Personalization Through Touchpoints
The Starbucks app provides a great example of how to enable personalization through covert touchpoints. For customers, their mobile app is an easy way to pay and earn points for free drinks. For the Starbucks marketing team, it is a data collection machine.
Through the app, Starbucks will learn which cafes or stores customers visit, when they buy products and what products they buy. They know what customers buy when they travel, what customers buy when they’re home and what discounts they need to be incentivized to buy more. Knowing all of this allows the Starbucks marketing team to deliver personalized communications to each customer. For instance, if a customer has only ever purchased coffee, they probably shouldn’t see a discount for tea. This helps Starbucks operate more efficiently as an organization and engage customers only in ways that make the most sense for them.
Sephora: Guiding the Customer’s Journey
Sephora is a retailer that strives to provide a wide range of cosmetics to a wide range of customers. They understand that makeup is inherently personal and sought to develop a behavior-based email marketing strategy that could guide customers to new favorites while solidifying their loyalty.
Sephora immediately noticed they had a number of single-category shoppers who were considerably less loyal than their multi-category shoppers. To guide these customers, Sephora implemented a predictive feature for their post-purchase emails called “Next Best Purchase.” For example, if a customer only bought foundation, they would later receive an email with several personalized recommendations for other cosmetic categories, such as pencil eyeliner, lipstick or bronzer, based on individual predicted affinities. After implementing these personalized “next best purchase” recommendations emails, Sephora reported a 6.3% increase in conversions per client.
Technology has changed the way that consumers perceive and interact with brands. Today’s consumers don’t want to have informal relationships with brands that exclusively revolve around purchasing – they want an exemplary experience that proves retailers understand their needs and preferences.
By combining the right expertise with advanced personalization capabilities, your retail marketing team can deliver the type of experience consumers crave — a quality purchasing experience that provides value for them while also solidifying their loyalty to your brand.