Tackling The Personalization Imperative


Following is Part 1 of the Retail TouchPoints series focused on Personalization Strategies That Work. In the next installment, three retailers will explain how they have optimized their marketing strategies to better engage consumers. Part 2 will appear in the May 7 newsletter.

The continual evolution of the omnichannel consumer has prompted retailers to rethink and revise their marketing and engagement strategies across digital and physical channels.

In light of shoppers’ increasing digital expertise and overall savvy when it comes to finding the best buy, retailers must remain competitive by providing the right product at the ideal price. Furthermore, these products must be revealed at the perfect time during consumers’ browsing and buying journeys, according to research from the e-tailing group and MyBuys.


Through more than 1,100 consumer interviews, the e-tailing group confirmed the ongoing demand for more personalized brand experiences: 40% of respondents said they buy more from retailers that personalize the shopping experience consistently across all channels. Additionally, 59% of consumers reported that personalized product recommendations make it easier for them to find products that interest them. Respondents noted that the most effective methods for receiving personalized messages were via web site recommendations (55%) and unique emails (54%).

“Retailers need to stand out from the crowd and find ways to deliver a unique, exceptional shopping experience,” said Deena Amato-McCoy, Research Analyst for the retail branch at Aberdeen Group, in an interview with Retail TouchPoints. “The best way retailers can achieve this is to personalize brand interactions to individual shoppers and groups that share similar preferences and/or demands.”

Progressive retailers are embracing and investing in personalization tools and strategies to meet and exceed consumers’ heightened shopping expectations. By tapping product recommendations to drive cross- and up-sell opportunities, and customizing offers and messages based on customer data points, these merchants are better connecting with consumers. In turn, they are driving incremental purchases and long-term loyalty.

“By knowing consumers at an individual level, retailers can present targeted products and offers anywhere and anytime as customers move through the shopper lifecycle, increasing the likelihood of purchase and reducing cart abandonment rates,” said Phil Hollrah, Senior Director and Head of Product Marketing at MyBuys. The added influence of personalization is advantageous, given that “67% of respondents to our 2013 consumer study said they are confident and ready to make a purchase once they find the right product,” which personalization helps them accomplish.

Personalization Opportunities

Research from Retail TouchPoints uncovered retailer sentiment regarding the move to personalized marketing. Strategies most utilized by retailers on their e-Commerce sites include:

  • Product recommendations (54.4%);
  • Promotions (55.7%);
  • Content (38.9%);
  • Alerts (34.2%); and
  • Ads (32.9%).

However, many retailers struggle to determine the most advantageous investments, as well as the most effective mix of personalization strategies throughout the browsing and buying process.  The challenge is that consumers are becoming more “fickle,” according to Amato-McCoy: “They change on a dime regarding where they want to shop, the digital touch points they use and what they expect service-wise during a shopping trip.”

Additional drivers compelling retailers to embrace personalization include keeping pace with price-competitive eTailers such as Amazon, and addressing the evolving issue of “showrooming.”

Between an “extremely fragile and volatile economy, and cut-throat competition across the retail marketplace, retailers have to fight for wallet share like never before,” noted Amato-McCoy. “Personalization is the name of the game for any retailer that wants longevity in this scary marketplace.”

Context — or consumers’ reasons for shopping on a specific channel — is becoming a more influential driver of customization, added Nikki Baird, Managing Partner of Retail Systems Research (RSR). “If retailers can grasp a shopper’s context,” she explained, “they have an opportunity to do something much more differentiating with personalization, which is an area that retailers such as Amazon historically have dominated.”

Four Strategic Actions For Personalization

The Aberdeen Group report, titled: Hyper-Connected Online Retail Personalization, uncovered four strategic actions best-in-class retailers are taking to address new and emerging shopper behaviors. These actions include:

  1. Developing product strategies based on deeper customer segmentation such as affinities, preferences and demographics (36%); 
  2. Coordinating product placement with customer behavior (29%); 
  3. Establishing quantifiable methodologies for measuring customer activity (24%); and 
  4. Increasing online ad relevance with search criteria (24%). 

Retailers can customize and refine messages and offers in a variety of ways in order to align with customers’ unique wants, needs and preferences: on the e-Commerce site, via email, and also through mobile marketing strategies.

Tactics such as detailed segmentation and data mining “drive personalization efforts, which in turn, provide longer-term lifts in profitability,” according to Stephane Latreille, VP of Retail and CPG at Aimia, a loyalty management service provider. “Retail management is often focused on unit sales, sales per square feet, and margin. Driving top-line sales and profitability is critical, but so is a deeper understanding of who and how profitable customers are, especially from a long-term perspective.”

However, many organizations still face a key internal challenge: Breaking down departmental silos and creating a cohesive, all-encompassing customer experience based on detailed customer profiles.

Eliminating Organizational Silos To Optimize Personalization

Creating a seamless and compelling brand experience relies on a retailer’s ability to tackle Big Data, integrate customer information across all touch points and eliminate silos across the organization. With that competency, marketing teams can create 360-degree profiles of shoppers, empowering retailers to fully optimize and personalize all brand-to-shopper interactions.

The RSR report, titled: Marketing In Retail: Making The Case For The CMO, revealed that 43% of retailers are proficient at targeted marketing across channels. However, 29% of organizations said that determining and accommodating how different customer segments engage with their brands was a top challenge. Also, 32% of retailers noted that customer data was not integrated, making it difficult for them to get a complete picture of customer insight.

For most retailers tackling personalization, addressing Big Data and integrating cross-channel information is too daunting, said Patti Renner, Director of Marketing at Knotice, a provider of data management, analytics and digital messaging solutions.

“Retailers have information from their stores, analytics platforms, email providers and agencies,” Renner said. “But most don’t have a way to combine all that data into unified profiles that provide a complete view of individual customers. Without the ability to unify data across the entire scope of customer activity, any missing pieces could have a serious impact on the ability to drive messaging and ROI from campaigns.”

Overall, consumers’ desire for personalized offers and communications is “far ahead of retailers’ abilities to provide personalized messages,” Latreille said. “Having a clear strategy, alignment between channels, and knowledge of customer preferences will optimize customer contact strategies, and drive sales.” 

Part 2 of the Retail TouchPoints feature, Personalization Strategies That Work, will appear in the May 7 newsletter.

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