Personalisation in retail isn’t new; far from it, the omnichannel environment is what customer now expect from brands both old and new. The business case for greater online personalisation is clear: Extensive research shows that retailers are only using personalisation tools in approximately 40% of all their onsite shopping sessions. However, for those retailers who have invested more heavily, and now feature some element of personalisation in more than 80% of all shopping sessions, incremental sales have increased on average by over 10% and up to 20% in some cases.
Why investing in more personalisation makes business sense
Let’s start off by saying that great personalisation doesn’t provide a complete answer. It is a part of an overarching strategy to improve brand relevance to connect with customers. Yet, without it, relevant customer experiences cannot be formed. The two are so dependent that you simply cannot have one without the other.
The business case for personalisation differs amongst retail brands, but what is clear is that every reason is fundamental for success, from providing a competitive differentiator to increasing average order value.
Creating a relevant customer experience hinges upon customer expectations, and customers now expect personalisation. According to a study conducted by Kampyle, 87% of customers want brands to place more effort into providing seamless omnichannel experiences. Customers want to feel valued, and that they’re parting with their cash for something they need from a company that they care about, and cares about them. Without this, there’s a real danger that brands will not only fall short of projected sales but also fail to grow in a fiercely competitive retail environment.
We know that personalisation equals sales growth. According to Smart Insights in 2015, 48% of consumers spend more when their experience is personalised and 74% experience frustration when content isn’t relevant to them. Major brands, like Marks and Spencer, Waitrose and JD Williams invest in personalisation to make customers happier and more satisfied with their user journey, and they have all reported improvements as a result.
The personalisation process may be fraught with challenges, and requires constant refinement, but the fact that it can measurably improve ROI is why it will be continue to be a major focus for retailers in 2017.
According to an InternetRetailing survey this October, only 9% of retailers said that they are totally confident that they have personalised their marketing and customer communications effectively – the same percentage as those that claimed they hadn’t at all. The biggest incentives for improving personalisation are meeting customer expectations and increasing conversions.
Communicating with customers remains one of the biggest goals, but also one of the biggest challenges for retailers. As the gap between customer expectations and brand delivery grows ever-wider, brands without the self-learning software they need to create ongoing personalisation will quickly find that they are being outpaced by those that do.
Behavioural data is what brings brands and customers closer together and ultimately generated ROI by increasing conversion. The number of ways that brands can communicate with others has grown exponentially in the past three years alone: more social channels, bigger email data sets, out-of-home technologies like beacons, interactive mirrors, etc. Greater omnichannel technology gives retailers a new edge, but as datasets continue to grow, they are also becoming disjointed. Feeding these datasets into one engine that can be distributed across every department, from sales through to marketing, enables brands to meet the demands of modern retail.
Peerius has the insights, experience and solutions to grow your omnichannel strategy. We recognise that the right personalisation solution is dependent upon the behaviour of your customers, which is why we provide a Missed Revenue Report at the start of the process to identify your biggest sales conversion opportunities. Contact us to see how you can grow your revenue today.