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Data Makes The Difference: How Direct-To-Consumer Brands Can Take Data And Personalization To The Next Level

  • Written by  Olivier Schott, Scalefast

0aaOlivier Scott ScalefastThe e-Commerce world is constantly transforming thanks to the rise of direct-to-consumer (DTC) brands over the past few years. From razor blade subscription services to major apparel brands, more and more companies are tapping the Internet to sell their products straight to customers. DTC sales are expected to increase by 71% in 2018 alone, according to Forbes.

While DTC business models are profiting from eliminating third-party resellers that have typically served as middlemen, one of the biggest benefits of this shift is that brands are now able to learn more about their customers than ever before. By owning the customer relationship from start to finish, brands are able to collect a wide range of transactional, behavioral, demographic and CRM data.

However, this first-party data gold mine isn’t worth much unless brands use it properly to deliver a personalized, optimized customer experience. Here are a few tips brands can follow to ensure they’re making the most of their direct line to consumers:

1. Personalize beyond product recommendations

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When customers make purchases directly from a brand’s web site, they do so with the expectation of a highly customized experience tailored to their own preferences, demographics and online behavior. It’s not enough to merely show personalized product recommendations based on data from past transactions — brands must go above and beyond to create a truly one-to-one relationship with their customers. Personalizing the customer experience isn’t just about showing people products you think they’d like, it’s about tailoring the entire experience to their needs from start to finish.

For instance, the facial products brand Glossier collected input from customers on what they were looking for in a cleanser product and then used that information to design the product itself. The firm also used customer data to streamline its checkout process. For instance, the brand noticed that readers of its blog would frequently add a product to their mobile cart before using a desktop device to finish the transaction. Glossier used this insight to create a new database for linking customers across its blog and store sites on both mobile and desktop.

2. Drive long-term engagement using data for email promotions, subscriptions and loyalty programs

All brand retailers should use data to reward customers for their attention and business. By implementing collected behavioral, transactional and CRM information the right way, retailers can develop better ongoing relationships through loyalty and subscription programs and email promotions.

Beyond offering personalized rewards, brands can use their first-party data to test and optimize customer loyalty and subscription programs. By knowing your customers’ buying habits and the frequency with which they return to your site, you’ll be able to find out which experiences are most likely to lead to long-term customer relationships. As an example, before men’s underwear brand Mack Weldon integrated a two-tiered loyalty program, it ran a test to ensure its new strategy would generate superior results to its old one.

3. Predict future customers’ needs with existing customer data

With user segmentation, online retailers can predict shopping and user experience preferences by analyzing what has worked with other customers in similar demographics and behavioral categories.

Recently, this type of data segmentation was handled manually by creating event segments, waiting for data to populate and then employing single optimizations based on the results of those tests. The near future will radically change how we collect this information by automating the processing of real-time segmentation and personalization data, without the need of a human. Today, we can identify and understand web site visitors at the individual level across devices, empowering us to immediately place customers into certain categories (e.g. “Millennial female”) and then serve them personalized experiences they’re most likely to respond to.

Because this process is automated and done in real time, human workers will be freed up to shift more of their focus to high-level, strategic decisions that require human creativity and problem solving.

4. Find where your customers are having trouble, then give them a hand

One of the major benefits of owning a direct-to-consumer e-Commerce channel, is that brands are able to see a holistic view of the customer journey.

By monitoring behavioral trends throughout the checkout process, a retailer might notice an unusual number of customer support inquiries from customers looking for their shipment status. With this information, the brand could enhance the customer experience by making order information more transparent and accessible, in the end reducing the number of customer support inquiries for the brand.

At Scalefast, we work with a large brand that discovered its customers were abandoning their shopping carts at a fairly high rate. With this insight, we worked together to test different user experiences and introduced a guest checkout solution that increased conversion rates significantly.

Ultimately, brands should strive to give every customer a unique, one-to-one, VIP experience on par with what they may receive every day at their favorite coffee shop.

With the right data analysis and personalization tools at your disposal, all you’ll need is a little bit of hard work and a willingness to test new strategies and learn from your results.


 

Olivier Schott is a founder and CMO at Scalefast, an award-winning full-service e-Commerce solution provider that builds and operates Direct-to-Consumer online stores for brands that want to accelerate online sales without the time, cost, and risk of in-house development. As an experienced CMO and entrepreneur, Schott has a demonstrated history of building and executing successful B2B and B2C marketing strategies in the Internet, e-Commerce and gaming industries. Schott is an accomplished entrepreneur who specializes in startups, software-as-a-service, e-Commerce, digital marketing and product marketing.

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