Personalization

4 ways to personalize the customer experience in retail

Personalization has become table stakes for retailers, with a recent study finding that 80% of consumers are more likely to make a purchase when brands offer personalized experiences.1 This trend is only accelerating.

The COVID-19 pandemic, which drove a significant portion of shopping online for more than a year, has raised the bar for retailers when it comes to engaging consumers across channels. IBM’s recent survey of 15,000 consumers found that “habits formed during the COVID-19 pandemic have raised consumers’ expectations of digital engagement, especially in service industries like retail, travel and transportation.”2

Retailers need to take their personalization strategies beyond simply using a consumer’s name in email copy or a subject line. Consumers need multiple, personalized touchpoints throughout the buying journey in order to convert and remain loyal to a brand. The best personalized experiences create a customer-centric conversation by providing communications, products and offers that are relevant to them as individuals in a given moment.

Here are 4 ways retailers can leverage data to improve personalization, increase conversions and boost customer retention:

1. Invest in demographic data to create relevant messaging.

Data is the foundation of personalization. Having deep insights into your target audience on an individual level is key to crafting messaging that will resonate with them. Demographic and psychographic data can be a particularly strong tool for relationship building, especially with consumers who are unfamiliar with your brand. When used to select the right imagery, messaging, tone, and featured products, demographic segmentation sends an immediate signal that a brand caters specifically to each potential customer.

Brand example: A leading health and nutrition chain uses personalization to segment their audience and decrease unsubscribes.

Data Axle worked with a leading health chain to reduce subscriber attrition and increase conversion rates for their email marketing program. With the help of data enhancement, we matched demographic information to the brand’s subscriber base and identified common attributes of users who unsubscribed vs. those who clicked. We found that unsubscribe rates were highest among older men and younger women. In order to capitalize on these findings, we advised the retailer to develop (and test!) custom creative informed by gender and age for each of these subscriber segments. The results were exactly what the brand hoped – a lower unsubscribe rate and a more engaged audience.

2. Use psychographic data to guide channel selection.

While demographic data gives some shape to your customers, psychographic data adds more depth and dimension by getting at what makes them tick. Psychographic data taps into areas like beliefs, attitudes, lifestyle, and hobbies. Combining demographic and psychographic data helps brands put the right motivators in front of the customer. Examples of psychographic layers that marketers can add to campaigns would include:

  • Wants to eat healthy, but lacks the time to prepare healthy meals
  • Enjoys outdoor activities like biking and camping
  • Avid photographer, active on Pinterest and Instagram

Retailers can use psychographic information to reach consumers where they are most active. For example, if you know your target prospect is most active on Pinterest and Instagram, launch a social campaign on those platforms to reach that audience segment. If you know your prospect is too busy to prepare meals and enjoys outdoor activities, it might mean they are less likely to spend time checking emails or browsing the web. In this case, a direct mail campaign might be a better way to grab their attention when they come home from a hike.

Brand example: Fashion Nova uses SMS to communicate with consumers.

 

Fast fashion retailer Fashion Nova’s target audience is Generation Z women. A recent study found that 55% of Generation Z use their smartphones for five or more hours a day and 26% are on mobile devices for over 10 hours a day.3 Using SMS (aka texting) to reach consumers with time-sensitive deals and offers is a great way for Fashion Nova to reach their audience in a way that is relevant to their lifestyle.

3. Use real-time data to improve engagement with regional versioning.

Consumers will not pay attention to messaging that seems “behind-the-times.” In our hyper-connected world, keeping up with the weather, sports scores, events and news is easier than ever. When content is customized to cater to a consumer’s region, it makes it that much more relevant. For example, adjusting your content to reflect the severity of a region’s weather can align your brand with your customer and even drive incremental conversions.

Brand example: Outdoor gear retailer Timberland adds regional weather-based messaging to its website.

Timberland’s weather-aware site not only provides visitors with a forecast for their area, but it also delivers the perfect product recommendations (e.g., a raincoat) to match. This type of personalized touch makes customers feel connected to the brand.

4. Collect and analyze site-behavior data for effective retargeting campaigns.

Site-behavior data is information captured during a consumer’s visit to a site. Data points include (but are not limited to) page visits, time spent on site, browsed products and pages, and any items added to the shopping cart. This information can be helpful in identifying not only the people interested in your brand, but also what specifically captured their attention. By keying off this data, marketers can remarket to these consumers with relevant products, as well as content and copy that home in on a customer’s specific tastes and interest.

Brand example: Mazda increases test drives through retargeting ads.

Mazda wanted to increase the number of visitors and test drives in their local dealerships. They launched a pay-per-click (PPC) campaign to deliver personalized ads using geographic location to recent website visitors. They also dynamically populated the specific car the site visitor was interested in, based on their website activity.

The results: Visitors who saw the personalized, retargeted ads converted at a 53% higher rate than the control group, and the ads had an engagement rate of almost 20% higher than average.

Conclusion

There are many ways to personalize messaging to reach your target audience. From regional versioning to dynamic creative to channel selection and more, the more granular retailers get when targeting consumers, the more likely consumers are to engage. In a crowded marketplace, retailers who approach consumers as individuals are more likely to succeed.

1 https://www.mckinsey.com/industries/retail/our-insights/personalizing-the-customer-experience-driving-differentiation-in-retail
2 https://www.retailcustomerexperience.com/news/survey-retailers-need-to-get-personal-post-covid-19/
3 https://review42.com/resources/gen-z-statistics/#:~:text=55%25%20of%20Generation%20Z%20use,over%2010%20hours%20a%20day

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Natasia Langfelder
Content Marketing Manager

As Content Marketing Manager, Natasia is responsible for helping strategize, produce and execute Data Axle's content. With a passion for writing and an enthusiasm for data management and technology, Natasia creates content that is designed to deliver nuggets of wisdom to help brands and individuals elevate their data governance policies. A native New Yorker, when Natasia is not at work she can be found enjoying New York’s food scene, at one of NYC’s many museums, or at one of the city’s many parks with her two teacup yorkies.