Personalisation spells revenue for brands

Today’s consumers view the traditional retail experience as impersonal, time-consuming and inconvenient. According to the Accenture Strategy Global Consumer Pulse Research, 41% of US consumers said they left a brand because they failed to deliver relevant personalised experiences. This translated to $756 billion in lost retail sales in the US, and $2.5 trillion globally.

There is no doubt we need to redefine the shopping experience and personalisation is a key strategy for building customer engagement and loyalty.

Why it’s important

The reason why a personalised experience has become this important for customers has a lot to do with our digital experiences. E-commerce is often cited as a threat to traditional retail because its superior convenience is eating into profit margins. However, there is another, perhaps more important, structural change that the digital revolution has brought: personalisation is now expected.

Everything we do online produces data which is captured to build a digital profile. This is what enables companies, services, advertising and applications to provide a personalised experience at all times. As we increasingly live our lives online, and bring our devices everywhere we go, we expect the offline world to deliver that same type of personalisation.

As brands continue to blur the lines between online and offline, personalisation is critical in creating a seamless and single brand experience across every channel. It’s the connecting thread between online browsing and offline shopping and it will enable them to stay relevant into the future.

Let’s see how it’s done.

Personalised service & products

Stitch Fix is a great example of a retail brand that is delivering a personalised service successfully and as a result is going against the trend of declining sales in the fashion industry. Four years ago, the online personal stylist brand had a customer count of 216,000 with a total revenue of $73 million. In 2017, both accounts jumped more than 10 times with a customer count of 2.19 million and nearly $1 billion in revenue. Data collection and the personalised services it supports played a central role in Stitch Fix’s growth.

The fashion company collects over 85 data points that their customers provide voluntarily. The data collected covers information such as size, price preference, style, social media accounts, common fitting challenges and even which parts of their bodies customers would like to cover up or flaunt. Algorithms analyse the data and provide a large team of stylists the information they need to offer personalised fashion choices and styling advice to their clients.

Unspun is another great example of a tech-led fashion brand that is using technology to deliver personalised products. In this case, perfectly fitting jeans. They recently opened a pop-up store in Hong Kong, where they showcased their 3D imaging technology and proprietary fit algorithms. After the 30 second body scan, customers explore different fabrics and fit options for perfectly fitting jeans that are only produced once purchased. This way, the brand reduces its environmental footprint as a “no-inventory” retailer. Something that resonates with their key customer demographic.

Personalised in-store experience

The same data collected for online services can be used to create personalised in-store experiences in the offline world. A single brand can have very different customers coming into the store looking for different products. The goal is to predict what each customer is looking for and present them with relevant products at the right time.

Behavioural data needs to be collected to answer questions like “What have our customers bought before? What are they browsing now? What are they looking for?” Some of the technologies and tools to collect that data include POS data/purchase history, payment data, cookies/browser history, social listening, in-store device tracking and facial recognition.

Most in-store sales staff use mobile devices to deliver a better service, yet a lot of potential is left on the table. According to the Tulip Store Associate Survey in 2017, 71% of in-store staff use mobile devices to access the product catalogue while only 13% said they use it to learn more about customers and their purchases.

Instead, with the right data and smarts to use it effectively global brands can deliver a targeted service to customers based on individual behaviour. When a customer walks into the store, staff can let them know if there are new arrivals from a particular line or designer that this customer prefers. Based on similar customer profiles, staff could show customers other related items. Frequently bought items could be given as a relevant complementary gift.

With the right data, the options are endless.

Building trust is essential

On a final note, curated experiences require input and investment from customers.

Brands that want to deliver on this promise need to be transparent and clarify why they need certain data and reward customers for collaborating. The 85 data points that Stitch Fix collects are provided by customers on a voluntary basis. Transparency is key to building the level of trust it takes for customers to do that.

Brands that explain their data collection and collaborate with customers will see that personalisation spells revenue.