Personal Commerce: The Retail Marketer’s Guide for 2023 & Beyond
The COVID-19 pandemic shook the world of retail in 2020, causing consumers to stay at home to keep themselves and their communities safe. While some retailers have characterized this event as a significant – but temporary – disruptor, the reality is that 2020 only accelerated the approach of a paradigm shift in retail. Consumers will no longer look at a retailer’s online store as a supplement to a brick-and-mortar location: Rather, shopping online will become the default.
Over the course of the pandemic, eCommerce consumer spending ballooned from 13% to 30%, and research found that 80% of all transactions during the 2020 holiday season took place online. Since many consumers are now accustomed to shopping online and intend to continue shopping online in the future, retailers must plan their strategy accordingly.
Many retailers have recognized this and have started to optimize their online shopping experience to recover from lost in-store sales while positioning themselves as leaders in the growing realm of digital retail. This shift in shopping habits presented them with a chance to re-examine their understanding of consumer behavior and revolutionize how they respond to it.
These new market conditions have ushered in a new era of retail where brands must think beyond a transactional mindset and bring their in-store experience to the online realm. This new state of retail is defined by personal commerce.
What is Personal Commerce?
Personal commerce is an approach to retail profitability defined by authentic, always-on experiences that meet shoppers on their own terms, turf and timeline. By adopting a personal commerce approach, retailers will cultivate informed shoppers who regularly engage with the brand, purchase products at full price and contribute to brand equity. Informed shoppers don’t need deep discounts or free shipping to see the value in your products – they know your products have value because they come from your brand.
This is opposed to a traditional, transactional approach where customer relationships are more fleeting and only exist to drive the next sale. In the coming years, this approach will only attract promotion-driven shoppers who happily hop from retailer to retailer, eventually purchasing from the brand who cuts them the best deal – even if they’re only saving a dollar and change.
Today, many retail brands are unintentionally attracting promotion-driven shoppers. They do this by thinking of their brick-and-mortar stores as the truest expression of their brand, while their online store is merely a vehicle for purchasing. Any information collected about online customers is used to herd them toward their next purchase and is rarely used in a way that focuses on building loyalty and ensuring retention.
This perspective may have been effective in previous years, but recent trends in retail suggest that online shopping will become the standard for many consumers. If you’re still leaning heavily on growing personal connections solely within your physical stores, you’re bound to fall behind. Let’s take a closer look at how the shift to personal commerce will shape the retail landscape.
5 Personal Commerce Trends to Expect in 2021
When handling the ongoing disruption caused by COVID-19, retailers can’t settle for adapting to change as it occurs: They need to transform their strategy to get ahead of the curve and keep pace with upcoming trends. Below are five influential trends taking place during this transformational shift from transactional commerce to personal commerce.
1. A shift from in-store to digital
In the past, a retailer’s online store played a supporting role to their brick-and-mortar store. However, with the increasing popularity of online shopping, the roles are likely to be reversed.
In 2011, Forrester estimated that eCommerce accounted for 7% of retail sales. In the midst of the COVID-19 pandemic, the US Department of Commerce found that 16% of all retail sales took place online. As digital capabilities continue to expand by leaps and bounds, it’s likely that this number will continue to grow.
Retailers that want a slice of growing online sales must start curating their digital experiences in a way that inspires loyalty and shows that they know each individual shopper. The best way to do this is by responding to the needs and preferences of shoppers in real-time through AI-driven technologies. Then, ensure that responsiveness has been integrated into every corner of your online retailing strategy. This will give you a head start in the era of personal commerce.
2. The need for customer-centric personalization
As personalization becomes more commonplace in marketing, retailers can no longer settle for marketing outreach that is fueled by segmentation. Instead, invest in technology and processes that will enable customer-centric, 1:1 personalization. This type of personalization keeps a customer’s identity, experience and buying context top-of-mind during all marketing outreach.
Attaining 1:1 personalization requires a retail marketing solution that can collect and analyze customer and behavior data, then layer it with product data from your catalog. This will provide an in-depth understanding of how a customer’s identity and actions contribute to sales. Then, use a mixture of predictive analytics, artificial intelligence and machine learning to automatically send relevant, personalized outreach at the moment a shopper needs to see it. When done correctly, you’ll improve the relevance of your outreach, build loyalty and secure more sales over time.
3. A focus on value-driven marketing strategies
Perpetually chasing the next sale is tiring. Offering your customers short-term incentives will help you quickly secure a sale, but it actively damages your brand equity. Whittling away your equity can have long-term consequences: Customers won’t see the inherent value in your brand, and they’re unlikely to convert without receiving another incentive, which damages margins significantly.
Instead, work with your existing customers by developing a value-based relationship with them. To get started, focus on understanding how you can offer a specific shopper additional value without adjusting prices. For instance, some customers find value in rewards programs and companion content, while others prefer ultra-relevant outreach with personalized product recommendations.
The quickest way to gain this understanding is with a retail-specific marketing platform that provides an in-depth analysis of how your customers’ identities and behaviors relate to offerings in your product catalog. Once you’re armed with this information, it’s simple to show customers that you know them and what they love.
4. The rise of always-on marketing
If a customer is shopping for a new laptop at 1 am on a Saturday, you need to have relevant outreach ready at that moment – if you wait too long, you’re giving another retailer a prime opportunity to capture their attention. That’s why always-on marketing is taking hold in almost every industry, and retail is no exception. By implementing the processes and technology required to automate your workflows, you can create an optimized response to customer activity 24 hours a day, 7 days a week.
Advancing an always-on mindset in your organization will require an increased focus on automation as well as predictive analytics. This will allow you to predict when a customer is likely to purchase by reading their behavioral signals. You can do this by setting inputs, goals and constraints into your always-on solution, allowing it to automatically determine the optimal time to send outreach to the shopper. From there, automated processes will ensure they are sent at the ideal moment, even if nobody is in your office. This will make your brand more conspicuous to shoppers, and help you get your foot in the door at any hour of the day.
5. Multichannel will be imperative
Did you know that multichannel shoppers spend 500% more than single-channel shoppers? They will engage with your brand more often, are more likely to become loyal buyers and have a greater customer lifetime value. This is because retailers that engage in multichannel marketing are focused on meeting consumers where they are actively engaging.
Today, consumers are digital-first, engage on multiple devices and use both online and offline mediums to discover, evaluate and eventually purchase products. A multichannel marketing approach takes this into account by telling a consistent story to shoppers across a variety of promotional channels, based primarily on their stage in the customer journey.
The multichannel approach can be further optimized by enabling 1:1 personalization that considers a customer’s identity and behaviors combined with the attributes of products in your catalog. This is best accomplished through access to your store’s data combined with advanced, retail-specific marketing technology.
Ensure your personal commerce strategy accounts for these five trends before you start investing in the people, processes or technology required to support your initiative. It may also help to assess the success of early adopters that have successfully transitioned to personal commerce.
3 Brands that Made a Personal Commerce Transformation
While personal commerce is relatively new to retail, several successful brands have already integrated this approach into their marketing strategy. Let’s take a closer look at how three brands shifted away from transactional experiences and made way for high-value customer relationships powered by personalization.
ModCloth
When COVID-19 disrupted the retail landscape, ModCloth wasn’t worried about reduced foot traffic to their stores – after all, they were an online-only fashion retailer. Still, they found a way to re-engage their audience in a new way.
Their goal was to take a customer-first approach to personalization using dynamic product logic in campaigns, personalized on-site campaigns and A/B testing for their creative assets. They started by studying customer data, behavior data and product data to find product and messaging affinities, allowing them to adapt their marketing style and tone of voice to match the products and messages that customers preferred.After taking this approach using data and predictive affinities, ModCloth was able to re-engage loyal customers while discovering new audiences. This resulted in a sizable boost in email performance and allowed them to sow the seeds for greater customer loyalty down the line.
GreaterGood.com
GreaterGood.com is an online retailer that strives to make a customer’s retail experience work toward a greater purpose. Whenever someone purchases a product through GreaterGood’s online stores, they fund initiatives to help almost a dozen causes centered around people, pets and the planet. This makes them uniquely placed to promote both eCommerce sales and donations toward nonprofits.
When GreaterGood.com noticed they had an undue amount of technology redundancies and unintuitive data stores, they found a solution in taking a personal commerce approach. Due to their intricate structure, they didn’t shoulder the entire responsibility of this initiative on their marketing team – they also worked with the design team, data analysts and QA engineers to gain complete control over their data using a retail-specific technology.
Once they had a solid grip on data and analytics, they created a variety of interconnected, multichannel personalized campaigns that included batch send emails, triggered emails and onsite personalization. This allowed them to reach customers on their preferred channel, recommend products they’d like, and ensure those products align with each customer’s favorite cause.
Express
Express is a well-known fashion-forward retailer with a sizable brick-and-mortar presence, and a longstanding online store. When the COVID-19 pandemic prompted many customers to start shopping for apparel online, their leadership and marketing teams knew it was time to revamp their approach to eCommerce.
Right away, their email and CRM teams combined forces in an initiative called the “Path to 50% Personalization,” where they aimed to personalize 500 million email sends to solidify their loyalty with their audience. To ensure the initiative was a success, they collected and analyzed in-depth sets of customer, behavior and product data, matched the subsequent insights to creative assets and began to intelligently automate the email distribution process.
The outcome of this was highly relevant, scalable email campaigns that could be designed and deployed with little to no intervention from the marketing team. Then, they adjusted and replicated this successful campaign framework for their onsite experience. This thoughtful approach to online retail won’t only help Express stay competitive through COVID – it will position them for continued success in the years to come.
Conclusion
2021 marks the beginning of a transformational time in retail due to a massive shift in consumer behavior and business priorities. Now more than ever, retailers need to eschew their transactional traditions and fully adopt a perspective that focuses on personalization and lifetime value. The best way to gain that perspective is through the tenets of personal commerce.
By adopting personal commerce, your retail brand will enjoy healthy margins, predictable revenue growth and improved brand equity. Best of all, you’ll be able to cultivate long-term customer relationships that will allow your brand to keep growing and stay competitive.
