Retail marketing is undergoing a reinvention. Between consumers’ growing demands and shrinking patience for brands that fail them, it’s prime season for fast-acting retailers to outperform competitors.
Discerning next steps is easier when you know what peers and competitors are doing — particularly what they’re doing well. With that in mind, Sailthru partnered with Coresight Research to release its 2022 Retail Personalization Index — a ranking system that spotlights what brands are doing, and who’s doing it best. To that end, Sailthru analyzed 500 brands and 80 brand attributes, paired with survey feedback from 5,000 customers and 260 retailers.
Four takeaways stand out as critical to retail performance in the months ahead.
Hyper-personalized experiences
Retailers are largely failing consumer expectations for personalization. According to the findings, 71% of brands think they excel in marketing personalization, while only 34% of consumers agree[1].
That’s both a big problem and a big opportunity for retailers: Nearly three in four (71%) surveyed consumers say they’ll spend more with brands that offer well-timed product/service recommendations that match their preferences[2]. These findings are consistent with independent research, which found 76% of consumers are more likely to refer friends and repeat purchases from brands that personalize[3]. It’s worth noting that companies that excel at personalization generate 40% more revenue than average players[4].
One challenge for brands is the reality that personalization hinges on personal data and consumers’ willingness to provide it. Aside from the essential information shoppers must provide when placing an order (account registration, full name, email, phone number, credit card, shipping/billing address) it’s a big ask to have them also share their birthday, product preferences, channel preferences and more, notes Laura Carrier, Retail Industry Advisor for Sailthru. Instead, Carrier advises ongoing, progressive data collection : “Retailers that implement a progressive system of asking for customer data as the relationship scales have more front-end work in determining when to ask for what data. Fortunately, retailers will find that they will end up with a larger registration completion rate and smaller unsubscribe rate,” she explains.
Take Thrive Market, for instance. “They do a great job of this, asking consumers upfront the minimum information needed to start their personalization journey, but also giving them the option to answer more questions. Customers understand that answering more questions will create a more personalized experience, but it’s their choice,” says Carrier.
DSW is another top-ranking brand that gets personalization right, using profile data to personalize welcome emails, then personalizing offers based on past purchase behavior, browsing history and abandoned carts.
“If you don’t excel in data collection, you can’t excel in personalization,” Carrier advises. “Data collection isn’t sexy and can feel scary, but retailers that focus on collecting and using consumer data are the ones that win.”
Unified omnichannel experiences
Omnichannel isn’t a bonus; it’s now a basic consumer expectation. In simple terms, we’re talking about consistent, personalized experiences across all brand channels. To that end, the Index found 80 of the 100 top-ranking retailers sync up customer login and profiles between their app and website, while only 41% of total retailers do this[5]. The point is to orchestrate all aspects of the purchase journey, creating delight and countering friction as consumers jump from one channel to another.
“It’s a frustrating experience for a customer to receive a text message about a flash sale on a product they’ve purchased that is now delayed. I know because it’s happened to me, and it was right after I had emailed and called customer service,” shares Carrier. Re-explaining a complicated return or re-entering an order number to track delivery status are other common sources of friction that can be alleviated with omnichannel integrations.
Target excels at orchestrating cross-channel experiences, notes Carrier. “Their mobile app, website and emails are synchronized and personalized based on browsing, purchasing and engagement behaviors. Target also offers multiple ways for consumers to see items they’ve expressed interest in via reorder lists, favorites, purchases and more. And they make returns super easy, especially in their app, incentivizing app downloads, so consumers can access receipts with a tap or two,” she explains. Other integrations Target employs include shared shopping carts across the app and website and displaying recently viewed items across channels.
From lukewarm to loyal
Growing a loyalty program remains one of the best ways for brands to collect data and keep customers coming back. Yet, only 58% of the 500 brands surveyed in the Index offer a loyalty program[6]. In contrast, 90 of the top 100 brands do[7].
Traditionally, loyalty programs were one-sized, designed to appeal to all customers. Instead, leading retailers report greater success with tailored loyalty programs that are specifically geared towards their most loyal customer segments in terms of model, benefits and marketing.
The Home Depot is one of those retailers, offering distinct loyalty programs for industry professionals and military. Though professionals make up only about five percent of the brand’s customer base, they drive 45% of sales[8]. At the same time, U.S. veterans and active service members are heavily represented among The Home Depot customers and associates. “Both the professional and military loyalty programs require participants to provide substantial personal data to be involved, but the rewards are high and tailored to participants,” Carrier explains.
The privacy-value exchange
Contrary to conventional assumptions, consumers don’t mind sharing personal data if there is a clear value exchange. Eight in 10 consumers will share personal data to earn loyalty benefits, and 7 in 10 will trade personal data for special discounts and offers, the survey found[9].
Those numbers are on track with additional research, which found 74% of shoppers feel sharing detailed personal preferences is helpful when used to curate personalized experiences and offers[10].
Put simply, retailers looking to capture more consumer data — the bedrock of effective personalization and loyalty — must give consumers a compelling reason to share that data.
Sephora excels at communicating and reinforcing the value exchanged for consumer data. For instance, when asking for birthdate, Carrier says “They’re clear about what they’re asking, which creates trust, and they deliver value in the form of discounts and gifts during the customer’s birthday month. Each time Sephora uses that data to personalize experiences, they are furthering that trust with customers.”
Enabling consumers to self-profile and decide how they want the brand to know them is another best practice emerging from the analysis. With Fabletics, customers are invited to choose what, when and how they want the brand to market to them.
New demands, new opportunities
Easy, personalized, integrated, valuable: It’s what consumers now expect from shopping experiences. Altogether, these expectations translate into significant advantages for retailers who move quickly to embrace personalization, omnichannel integrations, loyalty programs and generous incentives for consumer data.
In a matter of months, these capabilities will be standard retail operations. The big question for retailers: Will you get there before your competitors do?
Glean from detailed insights and see how 100 retailers stack up when you access the full 2022 Retail Personalization Index Retailer & Consumer Survey.
Sources:
1. “2022 Retail Personalization Index Retailer & Consumer Survey.” Sailthru, 2022, URL. Accessed 4, May, 2022.
2. ibid.
3. “The value of getting personalization right—or wrong—is multiplying.” McKinsey, 12 November 2021, URL. Accessed 4, May, 2022.
4. ibid.
5. “2022 Retail Personalization Index Retailer & Consumer Survey.” Sailthru, 2022, URL. Accessed 4, May, 2022.
6. ibid.
7. Ibid.
8. “Lowe's, Home Depot Court Big-Spending Pro Contractors As DIY Takes A Breather” PYMNTS.com, August, 19, 2021. URL. Accessed 9, May, 2022
9. ibid.
10. “The Retail Experience Reimagined.” Accenture. April 2021. URL. Accessed 4, May, 2022.
