As discretionary spend decreases in inverse proportion to cost of living increases, and consumers think more carefully about where they spend, retailers have to get really smart about strategies to win and retain their share of the market. There’s one approach that is proven to work to engage customers, enhance their experience and increase spend – and that’s personalization.
Retailers who understand their customers and use that knowledge to personalize customer engagement benefit on two fronts:
Steps to personalization
If you want to offer (more) personalization to customers, there are several key steps to follow:
- Collect data about your customers
- Extract insights – use analytics to mine the data to understand customer preferences, demographics and buying behaviours.
Use those insights to build personalized offers, identify your most loyal and profitable customer groups, re-engage with shoppers who haven’t purchased recently and segment your audience to send differently targeted promotions.
The importance of retail data analytics
As you can see, analytics for retail is at the very heart of personalization and therefore successful growth. Research from Forbes shows that retailers who use analytics have a significant competitive advantage. + There are four types of analytics, each of which plays a role in helping to deliver effective personalization:
Three things to look for in your retail analytics system
- Can it capture data from a wide range of sources?
The best analytics results come when the data is drawn from the widest range of systems – this could include retail POS analytics, mobile POS, online store, loyalty, sales, marketing and social media, promotions, inventory and finance.
- Is analytics part of an integrated digital retail technology platform?
By far the best way to do this is to ensure that your retail analytics system is part of an integrated digital retail technology platform. This means that all your retail systems operate within a single platform and can share data. With an integrated digital retail platform, there are no data silos, makes it easier to capture and analyse information from all around the business.
- Does your retail store analytics provide both high level and detailed information?
A good retail analytics system provides at-a-glance dashboard-style information for immediate decision making, but also the ability to drill down into more detailed information for deeper analysis.
As times get tougher for shoppers, it becomes even more important for retailers to meet their needs through personalization, and the key to success is the power of data and analytics.
What does personalization look like to the shopper
Personalization can take many forms, including:
- Curated suggestions for products they might like to buy (based on their previous purchases).
- Promotions and offers on items they actually want – where the offer might be a discount; a multibuy (buy one get one free/buy one get one half price)
- A ‘refer a friend’ offer where both get a reward – perfect for finding more people like your best customers
- Personalized invitations to events – such fashion shows, cookery demonstrations, make up demonstrations, DIY events or co-branded events with key suppliers
- Offers based on special events such as birthdays, wedding anniversaries or holidays.
What other technologies play a part in personalization?
Your loyalty program is a rich source of customer preference data, telling you who buys what, where and when. It also helps to deliver personalization in store, at the checkout or via a mobile app. Your online store holds a wealth of information about customer purchases and preferences. In store mobile POS can be used to capture customer data in the store, and also to use personalization to enhance the customer experience.