Last updated: Personalization in retail: Laying the foundation for success

Personalization in retail: Laying the foundation for success


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The world of retail has learned so much about customers and been able to aid them at every touch point with the help of technology. Marketing intelligence and reporting features have brought retailers that much closer to their customers, even if they never step foot in a store.

The cornerstone of all this is personalization in retail: shoppers need to be catered to in order to check out more often and act as ambassadors for the brand.

But many retailers need help with setting up for success, automation, and optimizing over time. Begin with these steps:

  1. Build or buy infrastructure
  2. Unify customer data
  3. Automate and optimize

Personalization in retail: Getting started

Infrastructure comes first. A retailer needs to be able to keep track of shopper preferences in order to cater to them. This requires either building an in-house tracking capability or finding the right partner that can help.

The next step is to take action based on the data you collect, doubling down on successes and decreasing the impact of failed experiments. Many technology partners will help with automation to be able to optimize retail revenue at scale, instead of implementing a piecemeal, opportunistic system.

With the right personalization partner, retailers can deliver real-time customer engagements that drive improved business outcomes. This all rolls into a robust customer engagement strategy to help retailers understand who their customers are and provide the best possible omnichannel experience to them.

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Data-driven customer engagement 

The most important aspect of modern customer engagement strategies is unifying customer data. Having to pull and integrate data from multiple tools creates silos and costly slow-downs. You don’t need to know what add-on product to recommend six months after a purchase. You need to know right before the shopper checks out.

This on-time information, based securely on historical data and predictions driven by AI, is a must-have in the current retail landscape to create true and scalable personalization.

Customer engagement hinges upon four different kinds of data: product, customer, interaction, and any data types that are custom to the specific retailer. When a retailer has access to all these types of data, they’re able to dig into more robust metrics and become that much more customer-centric.

After all, no customer is exactly alike. Providing personalized offers across all channels allows retailers to cater to each customer’s identity and their style of interacting with the brand. At the end of the day, the whole point of setting a customer engagement strategy is to drive more intelligent omnichannel engagement.

Retail personalization: Automated, omnichannel, optimized

For personalization to work at scale, it needs to be automated and omnichannel. Retail is no longer about four walls and a roof; retailers need to show up on every channel that shoppers care about and offer a highly personalized experience to keep them engaged.

Any competitor can offer a catch-all offer on a social site, but proving that you understand the individual customer with a hyper-targeted ad is a point of differentiation that will have a much higher rate of conversion.

Another goal for retailers must center on optimization. After all, not all shoppers will covert and, in fact, some might even be weary of such a perfectly targeted ad. That’s where analytics and modelling come in.

Retailers should only double down on the segments and channels that are already effective. Throwing money at a failing channel will simply be a waste of resources. Having a finger on the pulse of customer reception to engagement strategies will enable you to allocate budget to channels and activities where purchase probability has proven higher.

The results speak for themselves

All this effort pays off. According to Google and BCG’s study, the Business Impact of Personalization in Retail, “40% of people will spend more than planned when the consumer experience is personalized.” And the 2021 Emarsys Loyalty Index found that “66% of consumers remain loyal and frequently purchase from a brand due to personalized frequent and relevant communications.”

Retailers that spend the time to find their best customers and consistently provide a fresh experience will be able to reap the benefits of such a targeted approach.

The time is now for retailers to really get to know their customers in order to cater to them best. So take the time to get your personalization program right in order to enjoy the sales bump.

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