Personalization in Retail

Friday 11th, December 2015

A customer does not NEED to come to a brick and mortar store. A retailer has to make him WANT to.

Today, you can buy anything online. People walk into a store or a library or a museum, not for the prices or the selections available – you can get better deals on both online – they come for the experience. Something that cannot be replicated online. And that is personalization.

Sephora has a Beauty Insider Loyalty Program – customers can save what they love and what they have bought in a ‘Beauty bag’ that is both online and in-store. It taps into a shopper’s profile to link the person’s attributes (like age and skin tone) with various products that are available in the store, which the customer can access across devices – even on iPads in the store. Customer engagement has diversified into an Omni channel network from a monochromatic single platform. A retailer can use any customer information from an online purchase to serve him at the point of sale! And the customer gets better deals and tailor-made recommendations.

Gartner says that 89% of marketing leaders say that customer experience would be the main basis for competitive differentiation by the year 2017.

Personalization in retail is gaining a lot of traction. Customer expectations have changed. Traditional retail business models are going up in smoke. The usual comfortable outbound methods are now outdated. And there is the new kid on the block – online shopping. The buzz is that Shop Direct has launched fully-personalized home pages for every single customer that signed into Very.co.uk – the retailer believes this to be a world-first. So when a customer signs in, he gets a homepage which would reflect his interests – someone who looks for a party dress will find that their preferred fashion brands are on display, while those looking to furnish their abode will see electricals and homeware offers. Shop Direct is capable of presenting some 1.2m versions of the website – complete with variations in the kind of promotional messages that are used and in what position. Apart from the kind of products they would be interested in, the page offers recommendations based on what shoppers like them have bought! And they hope to have 3.5m different versions soon.

This is the kind of thing that the offline brick and mortar retailer is up against.

Amazon.com is another giant that has changed online shopping. And as if Amazon.com was easy to compete with, customers also want the same kind of service they get there to be replicated offline. They want the retailer to know their preferences. And they’re willing to pay! A RightNow Customer Impact Report says that 86% of consumers are willing to pay even 25% more for a better customer experience. So it doesn’t matter if it is just having someone greet customers when they enter a store, or it is about sending personalized emails or making offers based on past purchases – the bottom line is that personalization promotes customer loyalty. And that is something every retailer looks for.

In many ways, personalization in retail is like going back to the time when the man in the small grocery shop around the corner knew all his customers personally and could make recommendations on what they liked or needed. Today’s customer enters the store expecting the retailer to know and understand his likes and preferences, provide relevant mobile deals to him, give him a reason to come to the store as opposed to going online, let him shop the way he wants and make a personal connection.

And big data can help achieve exactly that. It is possible to recall past shopping carts or even offer the ingredients of a recipe that was seen in a video clip by the customer. But there is a very fine line between really knowing your customers and acting like Big Brother. One bad move and you push too much or hide how you use customer data, and a negative reaction will ensue.

With the right tools and the right strategy in place, it is possible to offer a highly personalized and a totally immersive shopping experience to customers who have high expectations in the first place.

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