There is little doubt that personalisation is one of the buzzwords du jour in the world of fashion retail. What is less clear is the right way to approach personalisation, what the objectives should be and what those goals should be measured against. In Drapers’ first personalisation report, we aim to shed some light on these areas.
Fashion retailers and brands are at various stages of personalisation, but benchmarking yourself against them can help to inform your strategy. Here we bring you the findings from Monetate’s survey of more than 100 retailers.
Retailers of all shapes and sizes are embarking upon personalisation strategies, so with this in mind Drapers brings you the findings from Monetate’s survey of more than 100 retailers to allow you to benchmark your efforts against your peers.
The survey confirms that customers are increasingly demanding a more personalised approach – almost all respondents (92%) agreed that this was the case. Traditionally, retailer and brands perception of what personalisation means is tailored product recommendations based on past browsing and purchase history. This still seems to be the case, as 62% of respondents perform this form of personalisation, but interestingly, nearly as many – 61% – are providing other personalised website content. Significant numbers are making use of personalised content in emails (47%) and personalised product badging at (25%).
The data shows that although most retailers (92%) are good at personalising for desktop, this drops to 68% for mobile websites, to 62% for email, and to just 13% for mobile apps. Given the explosion in m-commerce and apps, these are likely to become key focus areas over the next 18 months. A significant number – 40% – are also still unable to synchronise experiences across devices/channels. Mike Harris, Monetate vice president, Europe, the Middle East and Africa, says: “Shoppers use multiple devices and channels in their path to purchase. With the intent and behaviour changing with the customer’s context and device, it is crucial that brands synchronise the experience across channels to ensure consistency and relevance.”
One of the challenges many fashion retailers face is knowing how to structure their business and which department should be in charge of the personalisation strategy. The Monetate retailer survey found the ecommerce department has responsibility in the majority of cases at 66%, followed by marketing at 27% and then IT at just 6%. However, when Drapers and Monetate brought together a panel of retailers for a roundtable earlier this year, the overwhelming message was that this strategy must be driven from the top at board level down.
Alex Henry, Monetate senior director, global solutions, said: “There is no silver bullet. It’s a big business transformation, but it’s starting to put the customer in the middle and look at their lifetime value.”
Another key debate is what the objectives should be. When Monetate asked retailers what the most important they used to track the success of their personalisation programme were, it found that more than half (53%) focus on short-term conversion. Fewe retailers rated customer retention (24%) and customer lifetime value (just 20%) as a number-one priority.
For those that are performing personalisation, nearly 50% are seeing a one to five times estimated return on investment (ROI). Notably, 8% expect to see more than 10 times ROI.
The challenge, however, is people-power and skills. As many as 68% of respondents said they lacked the human resources, while 27% said there was a lack of knowledge on personalisation strategy and tactics in their business. Alongside this, systems capabilities present another issue. Some 50% said they have an inflexible content management system or ecommerce platform, and 25% have the data to personalise, but it is siloed and not easily accessible by the personalisation team.
Crucially, when asked about future success in personalisation, 51% expect it to be machine-driven for scale, but augmented by the marketer or merchandiser. This is a striking comparison to the 27% of respondents who expect future success to be driven by marketers and merchandisers alone.
Retailers still have a lot of work to do before they fully embrace personalisation, but the potential rewards, in both the short term and the long term, are huge.