Data provides the building blocks for personalisation, but effective strategies must be built from the ground up.
In the new tech-driven world of retail, one commodity has become more valuable than anything else to business leaders: data. Mary Turner, chief executive of Indian etailer Koovs, told Drapers earlier this year: “Data is now like water: abundant and vital. But brands need to be smarter in using it to serve customers better.”
For some retailers, the challenge of introducing personalisation can be “daunting”, as Monetate chief executive Lucinda Duncalfe acknowledges, but she insists it is a goal worth pursuing.
“Personalisation drives business results – from both immediate-term sales and enhanced customer relationships,” she says.
Retailers should also remember that the use of data to tailor the customer experience is not new. Paul Kendrick, managing director of online department-store brand Express Gifts, notes that for former catalogue retailers such as his business, the use of data to drive a degree of personalisation is a continuation of how things were done before.
“We have always run segmentation models to ensure that we are targeting customers with the most relevant offers,” he says.
“Historically, this was sending different catalogues to different customer segments. Now, with digital techniques available to us, we can use even more data to inform targeting, and have more responsive ways in which to offer personalised offers and messages to customers.
“Email activity is increasingly targeted, based on customer interests, their historic trading activity, as well as web-browsing insights. On the site itself, we utilise data and have online tools that allow us to personalise the promotions offered to the customer.”
As Duncalfe says, starting the personalisation journey can be daunting when faced with talk of one-to-one personalisation and artificial intelligence. But Monetate senior vice president Maribeth Ross points out that one-to-one personalisation is a journey. She uses the phrase “personalisation pyramid” to describe three distinct layers in the delivery of personalised experiences.
She says the base of the pyramid begins with optimisation, the process of testing approaches to find out what works and then optimising experiences based on those learnings. Many retailers perform tests on their website, tweaking elements and monitoring the effect on conversion before rolling them out more widely.
“There can be excellent gains from leveraging tests to learn,” says Ross.
The next layer in the personalisation pyramid is segmentation, which involves breaking your audience into smaller groups for the purpose of targeting them with a particular message. Ross says this method is particularly useful when retailers have defined audiences, such as loyalty club members, that should be shown specific content or offers.
“Many brands optimise for their segments by testing what works for these smaller segments and leveraging that optimised experience targeted to the segment,” says Ross. “This typically provides a better experience for consumers and better results for the brand because the experience presented is more relevant.”
One-to-one personalisation sits at the top of the personalisation pyramid, which needs to be powered by artificial intelligence to be delivered at scale.
Regardless of the approach adopted, customer data is key and online shopping is providing more information on how consumers shop than ever.
“We have always collected customer contact data and built up a history based on their trading history and credit account behaviour,” says Express Gifts’ Kendrick. “And we now have even more data available, especially on what they look at on our website, which gives even greater insight into their interests and needs.
“By joining up this data, it allows us to make the customer journey even more relevant, and when they contact us, we can offer customers improved levels of service.”
Retailers should harness data from all channels – online, contact centres, social and in-store – and combine it to provide a fuller picture of their customers. Despite more than 80% of retail sales still taking place in stores, as the Office for National Statistics reports, many retailers have struggled to link online and offline behaviour.
Loyalty cards have proved a vital tool in achieving this goal, while retailers such as Mothercare and Monsoon Accessorize have adopted digital receipts to link in-store purchases to online shoppers through their email address.
Thomas Tregelles, senior digital marketing manager at Orlebar Brown, says data collection across all channels is a big focus for the swimwear specialist: “There are some quick wins like e-receipts, wi-fi and joining up with Facebook.”
Kendrick adds that customers are happy to share data with retailers if they get more targeted offers and better service, but the key is to keep collection quick and easy.
“We make sure that the data collected is relevant and captured simply,” he says.
When you are dealing with more than 1.6 million customers and real-time interactions, technology is required
Paul Kendrick, Express Gifts
The next step is analysing this data to pick out patterns of behaviour and working out how to act on it. Data scientists look for patterns that show where a brand is performing particularly well or badly, identify why that is and build upon it. They can also develop algorithms to solve common customer problems.
In light of this, data scientists are becoming highly sought after, not just in retail, but across all industries – so recruiting people with these skills is becoming a widespread challenge. Kendrick, who has developed a data-intelligence team at Express Gifts, admits bringing in the right people is “not necessarily easy”.
However, it is not just about having the skills to decipher the data, but also having the technology to take action on that data.
“We use tech that allows us to select which mailings are sent to whom, and online we have tools that optimise the website experience in real time using available data,” says Kendrick.
He adds: “When you are dealing with more than 1.6 million customers and real-time interactions, then technology is required and we are constantly looking at developments to decide how best to improve our customer experience.”
Duncalfe says retail’s business leaders should find out what technology is available to deliver the personalised experiences that customers crave: “I believe that we are at a point where customers expect more from their shopping experience than they ever have before. Given this, CEOs must understand the differences between the various technologies available to them and when it makes sense to implement each.”
Being agile and responsive is fundamental in this brave new data-dominated world – and only those that move quickly will keep up with today’s fast-changing consumer.