Retailers are delving deep into consumer data to provide a more personalised experience and make customers feel valued.
The vast amount of data the average person leaves in their wake every day means that brands and tech companies will soon know us better than we know ourselves. Intelligence gleaned from consumers’ online activity, revealing everything from their political persuasion to their favourite TV shows, is being used by brands and retailers in a bid to connect with them more deeply and, ultimately, boost sales.
Music streaming service Spotify, for example, pinpoints the emotional state its users are in based on the sort of music they are listening to, and where and when they are listening to it. Its user-data analytics are used by marketers on the platform targeting listeners, but economists at the Bank of England have also suggested they could be used to gauge the public mood. Spotify also uses data analytics to inform its advertising – one campaign poked affectionate fun at a listener who created an “I Love Gingers” playlist for Ed Sheeran songs.
These more sophisticated data analytics make the demographic profiling that brands have traditionally used to target people – such as age, gender and socio-economic status – look increasingly outdated. Brands are now looking to peoples’ lifestyles, habits, interests and attitudes to understand what they will spend their money on. For example, a 2017 study by creative communications agency Krow in partnership with YouGov, showed that parents’ purchasing decisions are influenced more by attitudes towards parenting and household management than by income, geography, family make-up or age.
H&M group is among the fashion retailers using a more tailored, data-driven approach.
“Every day, we are all exposed to a constant stream of messaging, and we have noticed a clear trend that consumers are tired of mass communication,” an H&M spokesperson says. “By collecting data from our operations within the group, we can analyse how our customers feel about the products and what they are most inspired and excited about. Thus, we can adjust the styles we make and the quantities we order to fit their needs. Every customer is unique, and we want our communication to be tailored to reflect this.”
Connecting with people’s interests and passions is not only changing how fashion retailers target their customers – it is reshaping their businesses.
Gucci rebuilt its brand over the past few years in part by tuning into millennials’ passions. The fashion house’s recent decision to go fur-free was a direct appeal to younger consumers, who are more likely to be vegan or passionate about animal rights. Eco-friendly brands such as outdoorwear label Patagonia and H&M’s Conscious Collection sub-brand are also targeting the growing swathe of consumers interested in sustainability.
Others, such as yogawear brand Lululemon and cycling label Rapha, have positioned themselves as community hubs orientated around fitness for like-minded customers.
Marketers are also segmenting people according to their tribe, or common interest, such as “health advocates” or “tech heads”.
Tammy Einav is joint chief executive of advertising agency Adam & Eve DDB, whose clients include John Lewis and H&M. She says that, rather than ditching demographics, brands can combine them with data analytics for more effective targeting.
Focusing on people’s life-stage is another way brands are tailoring their approach, Einav explains: “If a customer is happy to share data that they are expecting a baby with John Lewis for example, [the brand] will serve them relevant content through the journey – from maternitywear during pregnancy to clothing for children.”
Follow the leader
Analysis of data, such as a customer’s purchase behaviour or who they follow on social media, can be used to both adapt and create advertising campaigns.
Mark Halliday, chief data and digital officer at media agency Manning Gottlieb OMD, explains: “We might find that people who have clicked on ads and made a purchase also follow certain actresses on social media or have a passion for cinema. We’d then use this data to purchase posters near cinemas or [to devise] a data strategy around movie enthusiasts.”
Dictating a specific product is for someone of a certain age feels a little bit dated
Tammy Einav, Adam & Eve DDB
Targeting audiences around passion points also helps brands to avoid the trap of stereotyping consumers. A survey from parenting site Mumsnet and sister site Gransnet, taken in September 2018, showed 78% of its users aged 50 or over feel misrepresented by advertisers who use their age rather than lifestyle or attitude to market to them. Some retailers are aware of this danger – in 2016, to help turn around its ailing fashion business, Marks & Spencer announced it would focus on attitude, not age.
“Dictating a specific product is for someone of a certain age feels a little bit dated as a way of approaching targeted communications,” Einav says. “I don’t think anyone in a particular age group wants to feel they’re being marketed to for that age group.”
The shift away from relying solely on demographics is also driven by brands wanting to provide a more personalised experience. Research by Boston Consulting in 2017 found that personalisation can boost businesses’ revenues by 6% to 10%.
Tayyaba Malik, head of ecommerce at accessories brand Lulu Guinness, sees personalisation as a way for fashion brands to appear more inclusive and accessible to customers: “Personalisation, to a degree, is still relevant because it is important for the customer to see that they exist and matter from [the perspective of] a brand they admire.”
Sportswear brands such as Nike and Under Armour use apps to source large amounts of data that then inform their approach to everything from marketing to product design. Under Armour acquired fitness apps MapMyFitness, MyFitnessPal and Endomondo to help it build the largest digital fitness community in the world. Through the apps, Under Armour can find out how often a user is working out, where the workout took place and how that person performed.
Cate Trotter, head of trends at retail futures agency Insider Trends, says this sort of insight helps to de-risk business decisions. “[Under Armour] knows the most popular month for a run and, based on that, they know when to start marketing running gear. They also know how running shoes compare with other [styles], and can put that into product development.”
Fashion tech start-ups such as Stitch Fix, which makes recommendations to customers and delivers clothes based on those recommendations; Thread, a menswear platform offering personal styling; and fashion rental subscription service Armoir, take personalisation further.
We want to ensure that the conversations we strike up with our customers are relevant and timely
Aron Cody, Seasalt
Tim Grimsditch, chief marketing officer at Thread, points out the distinction between segmenting an audience and creating a truly personalised experience through artificial intelligence: “When you’re segmenting, you’re trying to slice down the population into steadily smaller pieces until you get a match. We don’t look at it that way. Thread has a unique style profile that we build up based on what people tell us when they register and what we learn about them as we browse the site. It’s properly one-to-one versus trying to guess what a tenth of the people on the site might be interested in.”
Keep it relevant
Along with making shoppers’ experience more personalised, ensuring your messaging is relevant to them is crucial.
Aron Cody is director of omnichannel insight and development at lifestyle retailer Seasalt. He says: “The ability to talk to customers during moments in their day is a privilege and we want to ensure that the conversations we strike up with our customers are relevant and timely.”
But messaging does not have to be hyper-personal to be relevant, and highly personalised communications should work alongside mass marketing rather than replace it, says Adam & Eve’s Einav: “There are channels where personalisation is key. But there’s still a place for broadcast media and for brands to tell a story and talk about their point of view of the world.”
Ultimately, the retailers that will succeed will be the ones that stay closest to their customers’ individual needs, passions and desires, says Insider Trends’ Trotter: “It’s about seeing your customer as an individual and tailoring everything around that. The relationship with the customer comes first and that relationship comes from understanding the customer. Once you understand the customer, everything you do, all the experiences, communications and products, flow from that.”