Personalisation – Retail’s friend or foe?
Retailers continue to struggle to achieve a balance where personalisation adds real value to the customer, whilst also delivering a financial benefit to the business. Connecting with customers on a one-to-one basis is not new nor is it just a ‘trend’; consumers expect retailers to anticipate their needs, understand those needs and fulfil them. Otherwise, they will simply lose out Alka Gandhi, head of Berwick Partners’ Retail and Leisure practice, speaks with a range of retailers to understand their key considerations.
Many retailers remain sceptical about the ROI from investment in personalisation tools and technology, but the proof of success lies in those businesses that have understood its power and realised a commercial value. Successful brands have increased conversion, loyalty and, most importantly, trust – with the latter becoming progressively more critical in the retailer and consumer relationship. The retail landscape has changed enormously over the last five years and continues to change at an unprecedented pace, requiring organisations to keep up with how consumers’ lifestyles are changing too.
The importance of striking a balance
Cross a line and personalisation can appear to be creepy or intrusive. In a data driven world, customers are becoming increasingly concerned about the ‘big brother effect’, which is particularly relevant in data rich subscription businesses. If customers share too much data, there is a danger of being in receipt of too much content or multiple promotions (relevant or not) to the point that it becomes white noise, or worse, an annoyance. For example, a vegetarian customer registered to a food recipe delivery site is unlikely to have any interest in meat recipes or offers; continuous content relating to this could result in a lost or frustrated customer. Conversely, Birchbox, the beauty subscription brand, is often cited as an example of delivering good personalised promotional offers to its customers based on effective use of their historic data purchases. This data allows Birchbox to go beyond just fulfilling a need; data used correctly can allow the brand to create a need that previously did not exist.
In a competitive market, retailers must ensure that their content remains relevant, solves a problem or truly serves an individual customer need – converting a browser into a purchaser. Monitoring this carefully will highlight if the activity makes very little difference to sales, in which case retailers must cease or risk diluting their brand by deafening the customer with unwanted and meaningless noise. US styling brand, Stitchfix, is a great example of effective personalisation at scale; it combines choice, convenience and a stylist, whilst providing flexibility around frequency of delivery.
Finding the right technology
Personalisation offers an opportunity to deliver more than a mere transaction. The right technology should create an experience that leaves the customer surprised or delighted.
Many retailers, irrespective of size or business model, recognise the need to continuously invest and upgrade their technology and processes in order to remain competitive, although many are unsure as to the depth of those investments.
Dreams is a shining example of a retailer who has bucked the trend in a competitive marketplace by focusing its culture and processes on being truly customer-centric and using technology to fulfil a need. One of Dreams’ largest technology investments is the installation of the ‘sleep match machine’. This piece of technology connects with the customer individually, providing a personalised prescription via a 3D mapping of the customer’s body, which can then be used to guide them in finding the right mattress fit. Mike Logue, CEO of Dreams, explains the benefits: “For us, technology has been instrumental in helping to build customer confidence versus confusion in their decision-making process.” This confidence has led to a higher level of conversion and, ultimately, increased sales. But Dreams recognises that its communication and personalised offering needs to evolve to meet the lifestyle priorities of its future customers – millennials.
The key is listening to your customer and establishing what it is that really matters. Any form of personalisation activity must be part of a seamless customer journey, one that does not appear forced or disingenuous. This should not be underestimated.
Offer a real benefit
Jill Easterbrook, CEO of Boden, also believes that personalisation and technology need to offer more than just a sense of familiarity: “At Boden, convenience and speed are important to our customers. We have recognised that consumers’ lives are becoming fuller, busier and their disposable time is shrinking.’’ As such, Boden is focusing on areas such as pre-populating of information for customers ordering via the website, taking unnecessary and repetitive steps out of the buying journey whilst making customers’ lives easier.
The Co-op has recognised this and recently introduced an app as part of its digital offering that enables its members to track their balances and select offers before visiting the store; allowing them to save time and money whilst creating loyalty.
Consumers continue to be time conscious. This has been supported by recent figures from the John Lewis website, where night-time shopping is up by 23% in the last year alone – with online shopping between midnight and 6.00am now accounting for 1 in 15 purchases. Women accounted for 66% of purchases. Technology is changing the patterns of shopping behaviours. Laptops and tablets still dominate in the evenings, with smartphones dominating daytime shopping. John Lewis has invested in providing a seamless customer journey experience across multiple devices, leading to a need for a service support structure to meet the 24/7 business model and consumer lifestyle shift.
Many retailers view themselves as ‘customer-centric’, but deeper discussions demonstrated that, for many, only pockets of the business are truly customer focused. A breakdown of functional silos and improved sharing of data is required to remove barriers and deliver a truly personalised experience.
Catherine Nunn, CEO of Lakeland, believes that “For ‘good personalisation’ to be achieved, a business must be truly customer-centric, both through its culture and its structure. It’s important for personalisation to be genuinely personal and meaningful if it is to create a connection with the customer – something technology alone cannot achieve. At Lakeland, we continue to work hard to truly understand the customers at the heart of our business, and it’s clear the important role personalised contact has to play in delivering exceptional customer service.” Focusing on its customers in this way has resulted in Lakeland being rated first for retail customer service experience, and second overall in the Which 2019 Customer Service survey.
Not every business has deep pockets, so understanding where you can gain short-term wins is as important as the long-term ones. Personalisation is more than just a marketing tool. In a data rich world, it provides a genuine opportunity to connect with your customer and offer a unique brand experience.
- Be relevant for your market:
Ensure any personalisation is authentic, discrete and resonates naturally with your customer.
- Focus on fulfilling a need:
Personalisation needs to make the shopping experience easy, convenient and painless across all touch points.
- Invest in your ability to interpret data to ensure it is meaningful:
This will lead to actionable insight; personalisation should not be just a marketing gimmick – done right, it can be a game changer for your business.
For more information, please contact Alka Gandhi, Head of the Retail & Leisure practice across our offices in Manchester, London and Birmingham. She specialises in leadership appointments partnering with businesses led by transformation, turnaround or investment growth strategies. Her clients include blue-chip, family owned, private equity and SME’s.Her functional experience extends across commercial, marketing, e- commerce, B&M and operations.