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5 Ways To Use Context To Drive Personalization

1VP SmarterHIn the increasingly competitive retail e-Commerce battlefield, shoppers are truly demanding a more personalized experience and retailers are struggling to determine which move to make in order to deliver a successful solution. Customers expect brands to keep up with their personal shopping preferences across all channels — online and in-store.

Digital Trends found that 73% of consumers prefer to do business with retailers who use personal information to make their shopping experience more relevant, while Infosys found that 78% of consumers are more likely to be a repeat customer if a brand provides them personalized offers. These trends have huge implications for retailers looking to enhance their personalized digital marketing strategies.

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Gen Z Is Frugal And Demands Personalization

Because retailers have been hyper-focused on Millennials, they may have forgotten about the next generation of shoppers: Gen Z or Centennials, better known as teens and tweens. Teens may seem like simply younger Millennials, but they are unique in their own ways. To that end, there are many strategies retailers can implement to build and maintain relationships with Gen Z and keep them coming back, including:

  • Engaging on social media, particularly visually oriented networks;
  • Offering free delivery and flexible returns policies;
  • Providing unique, personalized experiences;
  • Staying on-trend while maintain practical prices; and
  • Supporting their beliefs.

As true digital natives, Gen Z is “not only the best preview of future generations, but they also reveal the behaviors older generations will eventually adopt when it comes to technology,” according to The Center for Generational Kinetics, a Millennials and Gen Z research and solutions firm that specializes in retail. They are a generation of strong-willed people who grew up in the digital age, where everything is accessible at the click of a mouse, and social media and texting often win out over face-to-face conversations. They’ve seen the impact of the global recession on their families firsthand, resulting in more frugal spending habits.

“They’ve come of age during challenging times and they’ve learned that hard work and grit are the key to success," said Rob Callender, Director of Youth Insights for The Futures Company, in an interview with Retail TouchPoints. "They know they will face roadblocks, but are prepared to dust themselves off and get up if they get knocked down, which was a kind of complaint that society had about Millennials, who may have been a little fragile in that respect. Gen Z is realistic, are well acquainted with limits and constraints, and they have patience with themselves and with how the world works.”

Don’t Bank On Teen Loyalty

Unfortunately for retailers, it’s not easy getting teens to be loyal to specific brands using existing tools.“Trying to gain the loyalty of Gen Z via traditional loyalty programs, cards and promotions is a losing battle," according to a study by Ernst & Young. "The percentage who say a loyalty program makes a store special to them drops from 45% for Millennials to 30% for Gen Zs. The drop-offs are even more dramatic for interest in shopper cards and special events.”

Ernst & Young surveyed 400 teens to find out what is most important to them in terms of retail offerings and loyalty programs. Some key findings include:

  • 80% of teens say free shipping and delivery is important to them;
  • 77% want special sales or discounts;
  • 50% prefer a flexible return policy;
  • 38% try to use rewards when they shop; and
  • 29% join frequent shopper programs for stores they often shop in.

“Teens are highly loyal, but they’re loyal to trends and styles — not necessarily loyal to the store,” said Jeff Simpson, Principal at Deloitte Consulting. “The notion of points programs doesn’t resonate with these consumers [as well as they do] with older consumers. If you’re on-trend and have got the style right, then they’re there with you. If you miss it and step out of line, then it will be hard to get them back.”

Teens Are Price-Conscious Shoppers

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Unlike Millennials, Gen Z is a frugal generation, even though they get the bulk of their spending money from their parents. They also want a personalized experience when shopping, so retailers should to be careful about whether they are targeting the end consumer or the parents who are paying.

Price and quality are a “big consideration” for teens, according to The Center for Generational Kinetics. Cost-conscious members of Gen Z will search for pricing information and better deals on their mobile phones before making a purchase. In fact, the Center’s studies show that Gen Z are similar to Millennials in that they are more likely to search the Web for a better price, much more than Baby Boomers or Generation X would.

“Gen Z is very practical and they won’t overpay like other generations did when they were their age,” said Jason Dorsey, Co-Founder and Gen Z researcher at The Center for Generational Kinetics, in an interview with Retail TouchPoints. “It’s an interesting and important shift that brands, retailers and mall operators must adapt to win.”

Personalization Wins Over Privacy

In addition to the right pricing, Gen Z wants a personalized experience, and aren’t too worried about privacy. While many members of this group like to shop on their mobile devices, they also enjoy shopping with friends by visiting malls and stores that offer unique items at a practical price. For retailers, that means enhancing in-store and online strategies to create fun and experiential experiences in order to win teens’ hearts. 

Additionally, just a little more than half (54%) of teens are concerned with privacy and security when using a mobile payment app, according to the Center for Generational Kinetics.

“Those of us that are a little bit older obviously pause when we’re asked for an email address, password and that kind of stuff,” said Simpson. "This generation has zero qualms about it. As they get older and get access to credit cards and currency, I think it does become more of an issue, but I still think this generation is going to be far more trusting than others.”

Instagram Helps Connect Retailers To Teens 

In terms of social media, retailers should choose their channels wisely when targeting Gen Z versus Millennials. For the former, Instagram reigns supreme due to the its visual context. As many as 33% of teens prefer Instagram over Twitter (20%), Snapchat (19%) and Facebook (15%), according to a survey by Piper Jaffray.

“For Gen Z, it is all about visual context,” said Jill Standish, Senior Managing Director of Retail at Accenture. “They are getting inspired through YouTube and other forms of social media that are very visual. Retailers are responding by gaining appealing spokesmodels for their brand and making them come alive through social media. This generation likes to ‘follow’ these brand ambassadors on Twitter and YouTube to get inspired.”

For brands and retailers, Instagram is a way of connecting with teens emotionally. “You can tell a story in one image, almost no words, and you can create an immediate emotional reaction,” said Rony Zeidan, founder of the branding agency RO NY, in a statement. “You need to be very truthful in representing what your brand stands for in order for it to resonate and create engagement.” 

Teen-Focused Retailers: Hits And Misses  

Many retail brands that appealed to teens 10 years ago may need to re-focus efforts to be popular with Gen Z. The rise of fast fashion, athleisure and online shopping have caused even some of the best-known teen retailers to reassess their strategies and even to file for bankruptcy.

Similar to other age groups, teens like to shop on Amazon — as many as 41%, according to the Piper Jaffray survey. “Amazon Prime adoption has increased across all income brackets in each of the past five surveys, with this survey indicating Amazon Prime exists in 51% of households of the teens in our survey,” according to Piper Jaffray. Among teens, Nike and Forever 21 ranked second and third as preferred shopping destinations after Amazon.

Fashion athletic apparel (or athleisure) for female teens is still on the rise, which confirms why Nike is a top retail brand for the demographic. Responding to increased interest from teens and younger girls, athletic retailer Athleta recently launched a line dedicated to teen girls called Athleta Girl.

Today's teens have less interest in retailers that were popular with Millennial teens, such as Aéropostale, Abercrombie & Fitch, Hollister and American Eagle. These brands gained popularity because “they fueled a vibrant retail scene which catered to every niche and subculture,” said The Futures Company's Callender. “Millennials could picture who they wanted to identify with and there was a retail channel that specialized in that and would help them form that identity.”

Now, these retailers have experienced setbacks with the rise of fast fashion retailers such as H&M and Forever 21, which are more affordable and on-trend but not as logo-heavy. Aéropostale and Pacific Sunwear, for example, recently filed for bankruptcy after failing to modernize their strategies for young consumers.  

“Abercrombie & Fitch, Hollister, [and other] brands that were iconic in the 2000s were emblazoned with huge letters across articles of clothing,” said Callender. “That’s a very Millennial way of looking at fashion. Millennials were linking themselves with that brand to attach themselves to some of that brand's aura. Gen Z doesn’t seem to have any interest in that whatsoever. They want brands that align with their world rather than vice versa.

"Brands that emphasize that they’re more welcome and inclusive will be most likely to win Centennials, because Gen Z is shopping their values,” he added. “Another thing [retailers should do is] anticipate their empowerment. Millennials were largely respectful of institutions in the marketplace, but Centennials may be less patient.”

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Barneys Brings iBeacons And 'Endless Aisles' To New York Flagship

Barneys New York is enhancing the in-store experience at its flagship Manhattan location with iBeacon technology and an updated personalization platform.

The luxury retailer has enlisted the RichRelevance Relevance Cloud platform to:

  • Drive the store’s editorial personalization campaigns within the store;

  • Connect consumers’ online and offline behaviors and preferences; and

  • Help sales associates better serve clients via a customer clienteling app with “endless aisle” capabilities.

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Juniqe Boosts Revenue 20% With Real-Time Personalization

Running an e-Commerce platform that engages customers individually is crucial to Juniqe, an artist-powered online marketplace for art and design products operating in 13 European countries. The retailer was looking for a user-friendly, customizable solution to help track activity and engage with its customers.

“As with any e-Commerce product, conversion rate was proving to be very crucial for us,” said Sebastian Hasebrink, Founder and Managing Director of Juniqe, in an interview with Retail TouchPoints. “We had to get more rigorous about tracking everything that made that needle move. Being a lean engineering team, we were looking at solutions that could benefit us, preferably with a light involvement by the developers, and yet enable us to run experiments and build features in an agile fashion.”

Juniqe implemented Dynamic Yield, a personalization provider offering a Unified Customer Engagement Platform. This solution helps optimize and personalize customers’ digital experiences in real time. With Dynamic Yield, Juniqe can use a shopper's on-site behavior to make product recommendations as well as optimize landing pages and content shown on the pages.

“What was most crucial is what we refer to as 'individualization at scale,'” said Hasebrink. “We sell design and art lifestyle products that — due to pricing — are in the impulse buy range. The products need to appeal to every individual because nobody buys art out of necessity.”

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Dynamic Yield allowed Juniqe to create multiple versions of its home page to attract individual customers. The platform enabled the retailer to test different variations of images and home page styles to see which version generated the best engagement.

Juniqe began by testing the personalization features on a select group of site visitors. “When we have an idea to personalize a part of the site experience, we will typically run a test so we can compare the impact of this personalized experience versus a control group,” said Hasebrink. The test group produced an average of 15% to 20% revenue uplift for Juniqe.

Additionally, Juniqe changed various elements of its product page to determine the variation that yields the best ROI. The optimal offering generated an 8% revenue uplift among those visiting the page.

Testing Capabilities Alter Executive Mindset

More streamlined testing capabilities led to additional benefits. “Being able to test anything makes people move away from personal preferences and gut feelings to a ‘We don't know, let's test it’ attitude,” said Hasebrink. “That’s the beauty of having Dynamic Yield, because we can choose from a number of banners that all fit our style, are on-brand and very nice to look at. [They] gave us the opportunity to — on autopilot — optimize that based on on-site behavior and traffic sources. Without having to involve developers, we are a lot faster in making changes to our web site.”

Before implementing Dynamic Yield, Juniqe had worked with numerous providers for functions such as A/B testing, event tracking, personalization and product recommendations. Dynamic Yield offered easy-to-use features that anyone on Juniqe’s marketing team can use, all on one platform.

“Usually, third-party solutions either tend to be hard to customize or become challenging to anyone but developers to operate,” said Hasebrink. “What’s needed is a sweet spot where there’s enough room for customization by developers, yet friendly enough for anyone who is not technically sound to operate on his own. This is where Dynamic Yield wins; by providing an intuitive interface for anyone in the company to use and still have complete flexibility for the developers to customize as required.”

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Retail Success In The 'Era Of I'

Era of I OracleRetailers know that they need to be focused on pleasing the individual in order to be successful in what is called the "Era of the Individual – Era Of I," according to Oracle's recent survey of 300 C-level executives across a number of industries. And "I" includes employees as well as customers.

But although executives across industries acknowledge the importance of the individual, just 13% of retailers gave themselves an "A" grade for these efforts (more than 50% gave themselves a "C" grade), as noted in the survey report, titled: The Era I Enterprise: Ready For Anything.

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Long-Term Measurement In Personalized Marketing

1enmosIt’s no secret that a well-designed direct marketing program can generate significant value for a mass market retailer. However, while most retail chains now execute countless personalized marketing campaigns across multiple channels each year, relatively few precisely understand the ROI of their communication efforts.

When asked about the value of their personalized marketing program, most marketers will cite campaign metrics such as redemption (percent of customers who redeemed a given offer), participation (percent of customers that redeemed at least one offer within a given campaign), and incrementality (number of trips, spend, etc. by customers included in a campaign vs. those who were not).

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Reflektion Partner Program Powers E-Commerce Personalization

1reflektionPersonalization platform provider Reflektion has launched its Integrated Partner Program, which includes e-Commerce platforms Magento, Demandware, Netsuite and Mozu.

With the program, partner retail clients such as Disney, O’Neill Clothing, Godiva and Oriental Trading can integrate Reflektion’s e-Commerce personalization solutions, which are designed to capture, analyze and respond to each individual’s preferences and intent in real time as they shop.

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What Retailers Can Learn From Netflix In 5 Easy Lessons

Since its inception in 1997, Netflix has implemented a number of disruptive business practices and innovative approaches to customer experience. Its initial business model was simple enough: Offer consumers seamless access to online movie rentals.

Over the next three years, Netflix quickly evolved to include a comprehensive subscription service for unlimited DVDs, online streaming and, eventually, a personalized recommendation system that delivers movie titles based on member ratings, behaviors and preferences. Netflix is one of several companies leading the on-demand economy, which can be defined as a series of commerce-based businesses and solutions designed to make life easier.

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Accenture Survey: Retailers Still Playing "Catch-Up" With Mobile Customer Expectations

  • Published in Mobile

The number of on-the-go mobile consumers increased by a healthy 10% from 2014 to 2015, and retailers have been hurrying to meet the needs of this fast-growing group. However, the 2015 Adaptive Retail Survey from Accenture reveals that retailers still remain a crucial few steps behind:

  • 47% of consumers want more retail services via mobile devices, particularly real-time in-store promotions. Yet only 7% of retailers actually have the ability to send them;

  • 32% of shoppers want to be able to scan products in-store using their mobile devices, but only 17% of retailers provide scanning capabilities; and

  • 42% of shoppers want to receive automatic credit for coupons and discounts via their mobile phones, but only 16% of retailers can automatically credit coupons.

With these shortcomings, shoppers continue to have mixed feelings about retailers' ability to meet their expectations, according to Accenture.

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