The Power of Personalisation

Most retailers would say that if they could deliver a more personalised service sales would grow. Unfortunately this is easier to say than to do. There are three key reasons for this :

Most retailers, other than at an aggregated level, don’t know who their customers are, their relative importance, the degree to which they are committed to the retailer’s products or services and the extent to which they are favourably or unfavourably disposed towards the brand

  • Even if retailers do know this, changing something in order to improve things, is difficult because employees tend to be organised around stores, channels or products and services rather than customers
  • Even if the retailer has the necessary insight and organisation skills, it typically lacks the required technology or fails to implement it optimally

These three constraints can be overcome as follows :

  1. Building the necessary customer insight.

This requires harvesting all available data and crunching it to get an understanding of customers in 3 dimensions across all channels. The three dimensions are :

a) loyalty (how much does the customer spend, how frequently do they shop)

b) commitment (what share of the customer’s wallet does the retailer have)

c) advocacy (what does the customer think about the retailer’s proposition and service)

Retailers need a coming together of IT, marketing and data science skills organised so they can provide both a rear view mirror assessment of what’s happened and why and guidance to current and potential customer behaviours and attitudes.

  1. Deploying a customer centric organisation model or project framework with a senior (ideally CEO) sponsor who can keep the project on track and help remove road blocks and barriers.

They key movers need to understand how and why the organisation makes the decisions it does and what will be necessary to change them. Getting the right people in the right roles with clarity of purpose, an holistic view of the organisation and the appropriate governance is key. The organisation needs to measure outcomes from (individual)  customers points of view in order to understand how attitudes and behaviour impact brand, operational, financial and service metrics.

  1. Understanding, procuring and deploying the right technology

Retailers need  to choose the right type of solution or service to ensure that results can be delivered quickly within budget and resource constraints. There is an equal risk of spending too much and taking too long to deploy as there is in spending too little and going off half baked.

The chosen solutions are likely to comprise :

Database software, segmentation and insight tools to enable customer understanding

  • Multi channel CRM via app, email, website and post to deliver personalised communications
  • Web personalisation to ensure the online experience is appropriately tailored to customer requirements
  • Tools to help stores to deliver layouts, presentations, experiences, ranges, prices and promotions that are appropriate to the customers who shop there
  • Programmatic media buying to cost effectively source new customers

Most companies can point to some examples of a personalised approach that have yielded positive returns for customers and shareholders but few would say they do the above consistently well.

Tesco led the way on personalisation under Sir Terry Leahy but lost the plot when they began to focus on financial outcomes, ignoring the changes in customer behaviours and attitudes that heralded their downfall and haven’t evolved their 20th century loyalty tools for the 21st century multi channel and digital world.

Amazon, John Lewis and Ebay continue to evolve their online propositions favourably for customers but still have a way to go to deliver experiences that are truly personalised.

Net-a-Porter assign high value customers a personal shopper and this has been a key reason for their explosive growth. These personal shoppers understand customer’s size, colour, style and designer preferences and create outstanding service scores whilst racking up huge sales commissions.

Tomorrow’s winners will bring the benefits of a personal shopper to a mass audience and this will require customer centric insight, decision making and customer centric technology solutions.

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