Every retailer is seeking to reach the Promised Land of one-to-one customer personalization. Two brands that are leaders in their respective verticals — Home Depot and Neiman Marcus — use a variety of data-driven solutions to move them closer to this goal.
Executives from both retailers shared key personalization strategies at a session titled Data: The New Currency For Retail Marketers, during the NRF Big Show 2017:
• Improve the ability to retain relevant data (such as a shopper's clothing sizes or the formula for a custom paint color mixed at a Home Depot store) for future interactions;
• Tap location-based data to guide online shoppers into their nearest store; and
• Tie geography and seasonality to home page messaging and marketing communications.
Connecting The Dots Of A Multi-Point Purchase Journey
Executives from both companies agree that the brands share a tough challenge: "stitching together" customer activity on multiple devices — and in brick-and-mortar stores — into a single path to purchase. Because Home Depot completes close to 95% of transactions in its 2,000 U.S. stores, the retailer faces an uphill battle integrating digital activity with in-store purchases.
"A customer might have a tablet, two phones, and also use a shared PC," said David Abbott, VP of Integrated Media and Online Marketing for Home Depot. "Stitching together the fact that this customer looked at patio furniture at Homedepot.com and then bought furniture in a store the next day is a chore, but it's very important that we tie in all those things relative to the store visit."
Being able to track the same customer across multiple devices also is a priority for Neiman Marcus. "Identity is the core of personalization, and if you don't get it right, you're not talking to the entirety of that customer," said Jeff Rosenfeld, VP for Customer Insight and Analytics, Neiman Marcus.
Associate Interactions Define Personalization Template
Neiman Marcus, known for superior customer service, models its personalization efforts in three parts, based on how sales associates interact with shoppers. "First they observe the customer — what they're doing, what they're saying, their facial reactions," said Rosenfeld. "Then the associate acts: recommending a product or an alternate item that might fit the customer differently."
The crucial third step is remembering customer information, "so that each experience isn't a new one, but a continuation of that journey," said Rosenfeld.
Online, Neiman Marcus can "observe" shopper behavior using web analytics: page views, clicks, time spent on the site and interactions with marketing. But making pertinent recommendations can be more difficult in a digital context, without the face-to-face communication possible in the brick-and-mortar environment. The retailer also is still in the process of adding "remember" capabilities, according to Rosenfeld. For example: "We just added a feature to our web site that will remember an individual customer's clothing sizes."
Tailor Personalization To Specific Customer Segments
Home Depot recently added functionality designed to ensure crucial customer information is available at all touch points. This is particularly important for the brand's valuable professional contractor customers, who represent 10% of Home Depot's customer base but account for 40% of total sales. "These professionals might be in the store four to five times per week, compared to a lot of customers who are in the store twice a year," said Abbott.
Previously, if a contractor created a custom paint color at a Home Depot store, he would need to remember the specific color combination if he visited a different location. "We hadn't carried the formula from one store to another, but now we have the functionality to remember,” noted Abbott. “That's highly relevant for these customers.”
Personalization Requires Localization
Using location-based information, retailers can further boost consumers' loyalty to the brand. Both Neiman Marcus and Home Depot depend on location information to improve customer interactions.
"If someone types in 'black dress' at NeimanMarcus.com, it will show her what's in stock at her local store," said Rosenfeld. "We can also include information about events in her market area that are relevant to her, and provide that information in email and dynamically printed direct mail pieces. This could include alerts such as new arrivals at stores near her, in the product categories and vendors she has expressed interest in."
Home Depot's use of location data is dictated by geography and seasonality. "When we're advertising yard and gardening products, people in Miami will get a different home page message than those in Duluth, Minnesota," said Abbott.
Defining The ROI Of Personalization
Personalization is a significant challenge and investment for any retailer, so it's important to take a long-term view when measuring ROI. "Creating a relationship-driven strategy is the next frontier for us," said Rosenfeld. "That means not just managing for what we think the customer is going to do now, but determining the optimal mix to send her over a length of time. There are not a lot of people doing this well yet, but we're starting down this journey. There are technologies to optimize this and see all the interactions of the customer, and I'm excited to see what comes in this area."