Before the days of supermarkets and megastores – and long before the internet, shopping was almost always a personalised experience. It would not have been unusual for the grocer, butcher or draper to greet customers by name and give individual recommendations based on what they had bought previously.
How retail has changed. Paradoxically, it is now online retailers that are able to offer personalised products and offers using data analytics and artificial intelligence. Now brick and mortar stores simply don’t know their customers as well as e-retailers do.
Yet the idea of personalisation remains key to future, sustainable success. Brand loyalty is largely an emotional matter. If a customer feels a retail brand understands their needs and lifestyle, they are more likely to remain loyal. It’s also a practical issue. Time-poor customers prefer to go to a retailer they can rely upon, where they know they will find something they like, at the right price and will suit them as individuals.
Physical retailers that also have an online presence and can integrate their data from all sources have a head start. They have begun the journey by creating tailored loyalty schemes and are able to gain data-yielded insights to boost the knowledge they have about their customers. This leads to better engagement, retention and long-term loyalty.
Research suggests that brands with strong omni-channel engagement have an average retention rate of 89% versus 33% for brands with weak engagement. Again, it’s not that easy. With some loyalty schemes, it can take months before a retailer can actually build an accurate picture of the customer and be in a position to send them tailored communications and offers. This lack of speed and agility can have a negative impact on overall engagement.
There are a number of ways that retailers with physical stores can respond to the increased demand by consumers for a more personalised approach, through the use of coupons or recommendations, for example. In an ideal situation, retailers should be able to rely on the power of real-time (weather, local events, competitor offers) at the point of sale to not only deliver customised offers, but do it both quickly and effectively.
For example, is the perennial favourite, the coupon, being used to its full (personalised) potential? Coupons with offers based on purchase behaviour (you’ve bought this item of clothing, here’s an offer for some complementary items for next time you shop) could be provided.
Value-adds such as product recommendations (you’ve bought this brand of wine and this cheese, how about a box of crackers to go with them?) could also be used. Or information based on basket contents – ‘watch this YouTube video on how to pair the ingredients in your basket with wine’ could help enhance the customer experience. These are simplified examples. However, the opportunity to increase shopper engagement, encourage future purchases, and generate incremental sales is significant.
Physical stores do have one significant advantage over their online counterparts. The customer is actually there in-store and at the point of sale. With the right data, offers could be sent to mobile phones, using in-store digital signage or personalising offers based on basket contents. All too often, retailers are missing an opportunity by handing out blanket promotions, which are often irrelevant.
Bringing together the online and offline environments as part of an integrated campaign can be hugely successful. Using data gleaned from their online shopping history, shoppers can be encouraged to visit the store with an emailed offer offering a relevant, personalised promotion.
Competition looks set to intensify further in the retail space. A few years ago, who would have thought that a high street name like Toys R Us would be forced to declare bankruptcy partly through its inability to keep pace with its online competitors? This only goes to show how retailers must evolve in line with consumer expectations and market trends.
According to a recent report from Accenture, 75% of consumers are more likely to buy from a retailer that recognises them by name, recommends options based on past purchases or knows their purchase history. So the fact remains: personalisation, whether at till, in-store or online, is definitely worth doing, but reaps even more rewards when it’s done properly.