On the heels of launching the first-ever Retail Personalization Index, our ongoing analysis of the Sailthru 100 brands has surfaced seven significant trends affecting retailers, regardless of how successfully they’ve been investing in improvements to their customer experience and personalization to date.
Personalization and the customer experience are inextricably linked
At Sailthru, we have long believed that personalization, done well, greatly improves the customer experience. A better customer experience creates stronger customer loyalty, and in turn, higher customer lifetime value. We weren’t at all surprised that our extensive research into personalization bears this out.
Personalization isn’t just about surfacing relevant product recommendations and contextual content. It’s equally about how and when a brand engages with customers, ensuring that those communications are welcomed rather than intrusive or off-putting. A good customer experience is personalized, and a personalized customer experience is likely to be a good one.
Even the top-ranked brands aren’t that far ahead
Out of a possible perfect score of 100, no brand in our study scored more than 75. That’s generally because the brands had concentrated on one channel, providing an outstanding experience there, to the neglect of others. Even fewer brands are integrating multiple channels to produce a seamless customer experience across them.
Trend Personalization should mean different things to different retailers
Retailers are different, as are their customers. That sounds obvious. But the implications, apparently, are not quite as obvious. One big implication: Every brand should have its own personalization strategy, based upon the unique characteristics of its customers and its own unique knowledge of those customers. What works for Macy’s or Amazon is not necessarily going to be best for JustFab or Home Depot.
Foot Locker is one retailer that seems to understand this fully. One of its most passionate customer groups are sneakerheads, who eagerly collect limited, rare, or exclusive shoes. Foot Locker has built an app just for them, complete with information about new sneaker launches and locations. Customers can reserve shoes through the app without having to first show up at the store. VIP customers get priority based on their status.
Brands need a policy around data
Brands ask for a lot of data. We expected that, and we think it’s fine, so long as it benefits the customer. But too often, it doesn’t. If you tell a retailer than you’re male with a child under the age of a year, you don’t want to see lots of promotions for women’s clothes.
Misuse of data is more than an irritation. It’s bad for the customer experience, and it makes the customer think that the retailer has no idea what they’re doing, or what they’re doing with personal data. At a time when customers are increasingly aware of how their data is collected and used, retailers should be careful to only collect the data they need, and to immediately show how it provides value to the customer.
Onboarding still stinks
Onboarding provides a really important opportunity for a brand to explain its value to a customer. Onboarding can be used to encourage customers to download an app, visit a web site, or sign up for email newsletters. Yet most brands don’t seem to realize this. They either send a single onboarding message or launch the user right into the full stream of messages, without regard to user behavior.
EBay provides a powerful counterexample: A welcome stream introduces customers to the brand and walks them through the process of creating an account, buying, and selling through the marketplace.
Our research spotlights the extent to which mobile strategies and implementations are lagging when it comes to personalization. We found plenty of brands without mobile apps. A few brands had truly horrible apps, with so many ads and interstitials that they’d be better off abandoning the whole enterprise. Some apps replicate a brand’s online store, while others – mostly from fitness companies – engage the consumer with non-product information such as performance monitoring.
Only a very few brands are trying to use apps to improve the instore experience, and even fewer have found creative ways to do it. One standout is Frank + Oak, which uses its app to alert store managers when a particularly loyal customer is in the store, and should be offered a cup of freshly made coffee.
Digital and in-store experiences are not integrated
Integration between the physical and the digital worlds is the hardest part of personalization, so it’s not surprising that so few brands are succeeding at it. And brick-and-mortar retailers get some important advantages because of their real estate footprints. There are reasons, after all, that digitally native companies such as Amazon and Rent the Runway are opening physical stores.
These seven trends show that even the most digitally savvy brands have their work cut out for them when it comes to effective personalization. But the variety among even the largest retailers also points up the opportunity for other players to use personalization to distinguish themselves and become stronger competitors.