personalized marketing

Five Years of Personalization and Consumers Still Want More

Brands need to deliver experiences that move at the speed of the customer, and investing in personalization improvements over time will build an engine that can do just that.

When the first Retail Personalization Index was published in 2017, personalization was still a somewhat nascent strategy. Everyone was talking about personalization, but only the most savvy retail brands had put vision into action. In that first report, the research found that companies like top-ranked Sephora attracted more customer engagement with personalized email offers and website content based on insights like recent searches and loyalty status.

What was groundbreaking then has quickly become table stakes for one reason – it worked. Marketers have dramatically increased their use of personalization, and consumers have responded positively. In 2022, our research supporting the Index shows that people have come to expect personalization, and their standards are sky high. So high, in fact, that retailers need to step up their personalization efforts above and beyond what they’ve already implemented.

By Jason Grunberg

The New Baseline Requires Richer Data 

In five years, what was once novel is now the norm. Almost every retailer – 98% of the hundreds surveyed – have implemented personalization, including a variety of advanced personalization tactics across channels. However, consumers are not impressed – while 71% of retail marketers responded that they excel in personalization, only 34% of consumers agree.

There is a silver lining for retailers, however. The majority of consumers who responded to the survey will share data with retailers in return for value. In fact, 80% of consumers will share data for special offers while 70% will share data for loyalty points. What’s more, 71% of consumers said they would shop more with brands that offer quality personalized experiences. Data is the foundation of personalization, and the retailers with the top scores in the 2022 Index are experts of collecting data to consistently improve personalization experiences.

Top ranked online grocer, Thrive Market, builds data collection into the very first experience that consumers have on the website. The brand asks site visitors about their diet preferences in order to fine-tune the shopping experience with customized products and drive personalized content across channels. Consumers immediately experience the value of sharing their preferences, and are therefore more likely to share even more information in the future.

Another top ranked brand, DSW, is masterful at engaging consumers with a personalized loyalty program, which also unites the online and in-store shopping experience. No matter where loyalty members shop, they get a complete, personalized loyalty VIP statement each month as well as personalized offers and reminders to use their points.

Consumers Are Omnichannel – Retailers Must Be, Too

Only a few years ago, great single-channel personalization was enough to wow people. A few of the best retailers went a step beyond, sending personalized email based on recent online searches, or personalizing landing pages to continue the experience started in a newsletter. Now, consumers want nothing less than a completely connected experience. Any touchpoint, online or in-store, on any screen, provides insight that should immediately feed into a more relevant experience for the next touchpoint.

Moving at the speed of the customer requires more than great data. Retailers must feed that data into a predictive analytics engine to get better at delivering what customers expect. With predictive analytics, even people that don’t have a rich data profile can benefit from personalization based on behavioral patterns.

One of the masters of omnichannel marketing is Sephora, which shared the top spot with Thrive Market after earning first place for the previous four years. The brand committed to data-driven personalization early on, and has built a powerhouse omnichannel engine powered by predictive analytics. Insights about their loyalty members and frequent shoppers drives personalization online, in-store and over email, and they can personalize messaging for new visitors based on what has worked best, so that everyone gets something that works for them.

Loyalty Programs Are the Key to Long-Term Success

The brands with the best personalization experiences in the 2022 Index are delivering rich and dynamic loyalty programs. Five years ago loyalty programs were largely vehicles for repeat shopping through promotions and offers. Today, they are major data-collection engines that deliver advanced personalization experiences. Loyalty members have come to expect that their engagement with a retail brand will contribute to personalized offers and messaging.

Brands like The Home Depot have segmented their audience to create highly personalized loyalty programs. For example, they provide a completely personalized shopping experience, deals and offers for their professional members, who have completely different needs and preferences than DIY shoppers. Not only does The Home Depot make it easy for professionals to get the products they need, re-order, and save, they also share relevant content in the form of how-to videos, newsletters and online tools like calculators.

The Best Retailers Prove Great Personalization Is Possible

The retailers at the top of the Retail Personalization Index come from all sides of the industry. A DTC online startup shares first place with an omnichannel beauty powerhouse. There are fashion brands, electronics retailers, and even home improvement brands – proving that data-driven omnichannel personalization is possible for any type of retailer.

These brands also show that investment in more robust personalization capabilities – such as omnichannel orchestration, predictive analytics and AI-driven offers – creates long-term benefits. Brands need to deliver experiences that move at the speed of the customer, and investing in personalization improvements over time will build an engine that can do just that.

This article originally appeared in Martech Series.

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