Personalization helps retailers get closer to their customers, but how do you get started? Here are some steps for customer engagement success.
As the shopping experience continues to evolve, so do customer expectations. Personalized retail experiences are more important than ever for driving customer loyalty and brand engagement, but they’re not all that easy to deliver.
Bringing excellent, personalized retail to life, at scale, is hard.
It requires brands use customers’ personal data to learn about their preferences and priorities, and adjust their approach based on what they learn. It’s similar to how a sales associate may ask you questions in-store to help you find what you’re looking for — but across multiple channels, and with hundreds of thousands of customers at once.
What is retail personalization?
Retail personalization is the practice of tailoring products, services, and marketing for a specific shopper or consumer segment. Or, more simply, it’s providing shoppers with a personally tailored shopping experience.
From product recommendations to marketing emails, there are countless opportunities to personalize and engage shoppers one-to-one. For example:
- Amazon provides sizing recommendations based on past purchases to boost customer confidence in fit
- Loyalty-driven brands, like Fabletics, display a customer’s points balance with clear calls to action
- Curated product recommendations based on known preferences (like dietary restrictions, personal style, etc.)
These personal touches have raised the bar in retail experiences. Once huge differentiators, they’ve become table stakes. Or, as one report puts it, personalization is the “hygiene factor”: customers take it for granted, but if a retailer gets it wrong, they’ll take their business elsewhere.
Personalized retail experiences have a real impact on the bottom line:
- People are 40% more likely to spend more money on highly personalized experiences
- 71% of consumers say they’ll shop more often with companies that personalize the experience
- Companies using advanced personalization see up to a $20 return on every $1 invested
- Personalization can reduce customer acquisition costs by 50%, and increase marketing spend efficiency by up to 30%
Retailers can no longer rely on product pitches to win customers. Find out how to deliver personalized experiences that build loyalty and drive growth.
Personalized retail experiences: Examples from top brands
The latest Retail Personalization Index by Sailthru ranks the top 100 leaders in retail personalization. Here are the three brands leading the pack, and what we can learn from what they got right.
Thrive Market masters one-to-one curation
Thrive Market is a membership-based retailer of organic, healthy products. The very first time you sign up on their site, you’re asked to fill out an on-boarding quiz. The data collected there immediately starts to tailor the shopping experience.
They use dynamic web content to display products based on customer preferences. The more you shop with them, the more advanced the personalization becomes.
They’re especially popular with customers looking for healthy food options, thanks in part to how easy it is to shop by specific dietary restrictions.
Thrive scored especially high based on their intuitive mobile app and personalized email marketing. Every engagement—what promotions customers react to in emails, what content they interact with on the site, what items they search for—fuel deeper insights and more impactful retail personalization. For example, as they explained in one interview:
“Sometimes what you don’t send is just as important as what you do send. Imagine if a vegan shopper received a promotion for bone broth or beef jerky? Perfect for a paleo member, but a deal-breaker for someone that doesn’t eat meat.”
Sephora rewards loyalty, online and in-store
The best personalized retail experiences seamlessly span multiple channels. And Sephora’s industry-leading loyalty program does just that.
Loyalty programs are a great way to incentivize customers to share valuable personal data, by offering perks and benefits in exchange. Sephora has long been successful with engaging loyal customers through their program, Beauty Insider.
The program is tiered, offering higher-value rewards to higher-level members (i.e., the ones who spend the most money). And the program is front-and-center in all customer communications. Whether you land on their website or receive a promotional email, your points balance is prominently displayed.
Not just that, sales associates in-store can also see point totals, as well as your customer profile, which features in-store purchase records, online browsing patterns, and interactions with salespeople.
Their mobile app takes the cross-channel experience a step further, allowing customers to book in-store makeovers and consultations. Users can find their preferred store, check to see if items are in-stock, and book a reservation. During their appointments in-store, the makeup artist can log each product they use directly into the customer profile.
Customer loyalty programs are essential for staying ahead of the competition. Here, we look at some of the best loyalty programs around.
DSW captures attention with effective emails
The key? Talking to customers in their own language.
The DSW loyalty program snapshots give a detailed summary of their points balance, with clear CTA’s for how to redeem them. Witty subject lines address shoppers by name and showcase products based on their browsing history.
In addition to their personalized product recommendations and loyalty program, DSW’s email marketing earned them the No. 3 spot as retail personalization leader.
Customers notice when they're not valued. Retailers should focus on keeping their loyal customers by making digital a priority and delivering omnichannel, personalized customer experience.
Personalized retail experiences deliver business impact
Investing in personalized retail experiences can lead to powerful returns. Brands can increase customer lifetime value, improve loyalty, and grow their market share. But it requires a strong command of customer data.
If you’ve been waiting to kick off your own personalization program, it’s time to figure out what’s been holding you back. As the retail landscape continues to evolve, brands that fail to keep up risk losing precious ground.
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