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Shop.org Recap: Personalization Will Drive $800 Billion Revenue Shift Featured

  • Written by  Glenn Taylor
Shop.org Recap: Personalization Will Drive $800 Billion Revenue Shift

Photo credit: NRF

Personalization has been at the forefront of many retail conversations over the past year, and the concept once again took center stage at the National Retail Federation (NRF) Shop.org conference in Las Vegas, held Sept. 12-14.

The conference made clear that bringing a personalized experience to the customer journey and focusing on lifestyle are the top engagement drivers for retailers seeking to stay ahead of the pack.

Google Retail Head Recommends Machine Learning As Personalization Backbone

Customers have changed in three important ways, according to Kiran Mani, Managing Director of Retail at Google:

  • They’re more curious (a 55% growth in searches for “ideas” on mobile);
  • They’re more demanding (33% expect personalized recommendations); and
  • They’re more impatient (120% growth in search for “same day shipping”).

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Personalization is the necessary component to handling this shift from a world of information — answering customer questions — to a world of assistance, which involves anticipating customer questions. In this new world, machine learning technologies would be responsible for creating frictionless experiences, according to Mani, who spoke in the session, titled: How Machine Learning Can Help You Deliver Better Customer Experiences.

“Personalization is nothing but translating information into assistance,” said Mani at the event. “Over the next few years, $800 billion in sales will shift to e-retailers that use site personalization, and away from those that don’t.”

Retailers are applying machine learning in three ways, according to Mani:

  • Connecting with customers using shopper data;
  • Driving actions by removing friction; and
  • Giving everyone in the company the information they need to work with the customer.

On their journey, customers can interact with more than 70 touch points over 79 days before making a purchase, which puts a significant amount of data at retailers’ fingertips. Consumers might start their search on Google, browse a few sites, search again, browse a few more sites, watch product review and tutorial videos on YouTube, search again and finally purchase the product.

In one example of how machine learning could optimize the shopping experience at exactly the right moment, Mani showcased the Google Lens image recognition technology. With more than one third of U.S. holiday consumers searching for images before going in-store, machine learning technology would give shoppers the chance to know exactly what they want to search for simply by snapping a photo.

“The fundamentals of retail have not changed,” Mani said. “Machine learning just gives you so many more possibilities to get to your goal in more ways than ever before.”

Fast-Growth Brands Away, Kidbox Show Importance Of Lifestyle And Authenticity

Beyond machine learning-powered personalization, Shop.org illustrated that the retailers that continue to thrive are brands that shoppers want to associate with. Luggage retailer Away, founded in 2015, already has sold more than 500,000 suitcases and procured approximately $80 million in total investment. But the company’s growth has been just as much about being able to tell stories as selling travel bags.

The storytelling aspect was born out of necessity. Not long after its public launch, Away actually sold more suitcases than it had in stock, which forced the company to focus on promoting its brand story, said Jennifer Rubio, Co-Founder of Away during a session titled: Great Retail Stories With Guy Raz. While the suitcases were being manufactured, the Away team launched a travel book that included a $25 gift card with each sale. The book sold out in three weeks.

“We thought maybe we could do pre-orders, but there’s nothing less enticing than putting your credit card down and worrying about not getting the product for a while,” said Rubio. “We decided to write a book, and we got a friend who freelanced for The New York Times. We had interviewed 40 influencers about the places they traveled to, and they gave us their vacation photos.”

The retailer even publishes a quarterly magazine, Here, as a print and digital publication, and distributes it in all suitcases sold. With Here included as part of Away’s content offering, the retailer can tell more stories to engage the shopper. 

“A lot of our writers come from big publications, but they don’t have anywhere to publish their travel stories,” Rubio said. “All of our stories are about people in places. It’s not hotel reviews, star ratings or lists of restaurants — it’s all about people’s experiences in places. There’s a lot of travel essays and first-person POV pieces. We don’t pay to send people to these trips so all of the stories that we’re telling are from people who wanted to be in that place, which really resonates with all our fans.”

Another recently established retailer, Kidbox, has tripled its revenue since launching in 2016. The company’s authenticity has been a major driver in assuring that this rate of growth continues, particularly when it comes to social good. In two years, Kidbox has donated $8.5 million worth of clothing to children in need.

“We’re hearing back from our customer — parents are starting the conversation with their children about the importance of giving back earlier in the child’s life than they would have because of the Kidbox shopping experience,” said Miki Berardelli, CEO of Kidbox. “To me, that’s success.”

Kidbox has even created its own Kids Board of Directors to help advise the company on children’s style, and to identify new ways to give back to their local communities. This is the second year of the program, in which 12 children aged eight to 14 are selected. Projects include conceptualizing and executing a creative community service initiative in their hometowns with guidance from Kidbox.

“When you start a company, you have your brand pillars of differentiation, and then you start to learn what the customer’s saying back to you and it begins the conversation,” said Berardelli. “We actually established a Board of Directors with children before we established a Board of Directors comprised of adults.”

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