In the wake of Black Friday and Cyber Monday, speculation has begun about the winners and losers. Early signs are showing that consumers are using their fingers on keyboards and screens to do the walking – or perhaps we should say “shopping”, fueling opinion that the future for brick and mortar stores is not bright.
Of course, with the continuing rise in the popularity of online shopping comes a corresponding rise in competition, which is why it's critical that retailers implement practices to generate an engaging and seamless shopping experience for transient customers. The customer journey is considered to be of utmost importance in order to maintain and grow loyalty, trust and spending - and retailers are investing heavily in tech like AR, VR and even AI which offer a creative, unique and immersive experience to today’s tech-savvy shoppers.
But, beyond the technology headlines; the virtual fitting rooms and the human-like chatbots, a fundamental truth in retail remains. Retailers that really know their customers —including their interests, and the things they’re most likely to spend money on—will be in a better position to drive more sales than those who are just guessing. According to Forrester Research, 62% of online shoppers have chosen, recommended, or paid more for a brand that provides a personalised service or experience. And 75% of e-commerce leaders surveyed by Forrester listed “personalisation capabilities” as a top priority.
Retailers know that there are a number of questions they must be able to answer about their customers - from likes and dislikes - to past shopping habits - in order to deliver a truly personal service. But it’s no easy feat, and many need help to get there.
Data analysis - the needle in the haystack
When it comes to providing a more personalised customer experience, analysts and retailers alike agree that ‘it’s all about data’, and we now see very sophisticated adoption of analytics in retail. Used in the correct way, data can help retailers understand shoppers’ behaviours, which products are being consumed - and where and when shoppers are most engaged. Harnessing data allows stores to personalise shopping experiences and demonstrate added value which can protect entrenched positions and see off competition.
But, the fact that there is more data in the world today than there has ever been may actually do more to hamper customer understanding than it does to encourage it. More data available to retailers logically means more irrelevant data: the larger the haystack gets, the more difficult it becomes to find the needles you’re looking for. What’s really important is not what data you can collect, but how it gets used.
Indeed, an enthusiastic embrace of data by the industry must not mean an inflexible reliance on metrics; which uses data in a passive way to predict success. True success will rely on how retailers harness data for good and turn information into actionable insights - from targeted marketing and timely customer communications, to suggestion engines - and even for product development. Data has to be collected, used in a dynamic way - applied in real time - in order to meet the demands of a fast paced market where customers can easily defect to other brands.
So, personalisation is all about providing the right message to the right customer at the right time. Once the retailer has the data they need, they must be able to analyse and apply it quickly in order to ensure that the output of the right data actually helps consumers gain confidence, eliminate uncertainty, or discover new items that they may not have even known about. All of this, of course, leads to better retail results – lower return rates and increased sales.
The benefits for retailers - and where to start
When you break it down, there are three main ways that personalisation can help retailers achieve better results: helping customers feel confident about their purchase, helping customers discover the right products to purchase, and sending timely, relevant customer offers.
Retailers that can help their customers eliminate guesswork and shop with confidence by providing personalised advice will gain a disproportionate share of the fastest growing digital consumer category, as the nearly $2 trillion global apparel and footwear category continues to convert to digital at upwards of 11% per year(CAGR), according to Forrester.
But personalisation is a broad church - and with an abundance of data comes an abundance of possibilities - which sometimes leads to confusion. Add to this privacy concerns - and the need to assure consumers that the data they give to retailers is stored safely and used wisely - and it’s perhaps no surprise that many organisations don't’ know where to start.
The journey to real personalisation, and using data more effectively, is littered with challenges. Organisations like Levi’s, House of Fraser and many more generate more targeted engagement strategies. House of Fraser, once best known for its high street presence, has managed to stay ahead of the curve. Whilst news outlets focused on brick and mortar store closings impacting bottom lines, this retail giant turned its fortunes on its head by leveraging technology and delivering a personalised, data driven, online shopping experience.
In a recent case study, House of Fraser turned to True Fit, a data-driven personalisation platform for footwear and apparel retailers, to achieve this goal by developing a platform for shoppers to create individual profiles about their prefered styles, fits and sizes, directly from the company’s website. They indexed the measurement, style and fit of more than 95 per cent of its apparel sold online - both from internal and external brands. By combining both the customer and apparel data, they were able to make instant and personalised recommendations for online shoppers - all from within the main website.
Here is a good starting point for retailers who want to personalise consumer experiences – they should be able to answer the following tough questions about each customer:
- What do they dislike?
- What’s important to them when they make an online purchase?
- What are the characteristics of the products that will likely result in a successful purchase?
- What are their specific wants and needs?
- What sort of specific characteristics are unique to them as an individual?
- What kind of purchases have they made in the past?
- What will they be looking for when they make a purchase in the true?
This is just a starting point - but it’s an important step towards success. And a vital one, because it’s only the companies who get this right who will ultimately succeed in a fiercely competitive, fast moving, retail environment.
Iain Masson, VP of EMEA at True Fit
Image Credit: Jirsak / Shutterstock