by Jason Grunberg, vice president of marketing, Sailthru
Personalization means many things to many marketers, so it’s hardly surprising that even large retail brands often misunderstand personalization and the power it can have. When the marketing team adds recommendations to its emails, they say they’re personalizing. When the product and merchandising teams add recommendations to the company’s web site, they say they’re personalizing.
They’re not wrong, but they’ve fallen prey to a particular type of tunnel vision. Viewed through a tactical lens, personalization is a form of optimization for a particular point in time.
This is not the view of companies that excel at personalization. These companies take a holistic view of the customer experience, and think carefully about where and when personalization should come into play. They treat personalization as a strategy, not as a tactic.
To identify the best of these organizations, Sailthru recently launched its Personalization Index for retailers. We scored 100 well-known retailers on how well they’re personalizing the customer experience, and how well it’s working. We found that most personalization and quality experiences went hand-in-hand. . Only two brands scored above 70 percent. That shows there’s plenty of opportunity for any brand to improve. Personalization is still an emerging key to a satisfying customer experience.
The highest-scoring brands in our study were Sephora, JustFab, and Walmart. Here’s what their strategies show us about personalization in the modern retail enterprise.
1. Personalization is a business strategy, not a tactic
JustFab was founded to recreate the boutique experience online. To offer each customer clothes that fit them both literally and figuratively, JustFab has engineered a customer experience and marketing strategy that revolves around collecting, analyzing and leveraging data. An example of how this plays out: When a member registers for JustFab, they’re asked questions about sizing and style, but also about which celebrities they admire. As a member spends more time with JustFab, the company slowly hands more decision-making power over to algorithms. Through a sophisticated approach to combining segmentation and personalization, JustFab offers the best experience to every individual based on context and preferences while at the same time optimizing revenue with every engagement.
It might be surprising to see Walmart cited as a leader in personalization. Walmart has been making headlines recently thanks to a series of acquisitions, with Jet.com and Bonobos being two of the most notable. Walmart isn’t buying revenue streams so much as it’s bringing in talent. Marc Lore, the founder of Jet.com, is now CEO of Walmart eCommerce U.S. Walmart also hired Jenny Fleiss, a co-founder of Rent the Runway, to run Code Eight, the first portfolio company in its in-house incubator.
This talent has already given Walmart a boost in e-commerce. More importantly, it will help Walmart compete on all fronts by offering customers a higher-quality, data-driven experience.
2. Personalization is cross-channel for the customer
Sephora, which ranked first in our Retail Personalization Index, illustrates how retailers can integrate different platforms to better serve customers and support sales. Sephora leverages its loyalty program, called Beauty Insider, to encourage interaction with the brand across email, web, and mobile. What consumers find as they switch between channels and devices is a seamless experience where product recommendations and other forms of personalization are consistent. Sephora excels at using digital channels to encourage shoppers to visit stores. As those shoppers wander, sample products, and interact with sales associates, you can bet their average purchase value is going to be higher than it would be online. It’s really a thing of beauty.
JustFab employs a smart and seamless use of data to create an integrated email and web experience. Like other leaders in personalization, JustFab doesn’t call out its personalization initiatives. Personalization is part of a high-quality experience–but not something the everyday consumer sees and feels. How categories display in email is a great example of this. Every month JustFab sends their members a look at new arrivals. The email features shoes, bags, and apparel, and those categories – and all products therein – are dynamically ordered based on the individual recipient’s preferred category and product preferences. When she clicks through her email, JustFab’s customer sees similar product recommendations treated similarly on the site. The use of personalized send time is another great example. No two consumers receive their email at the exact same time because it’s sent at the time of day that a given individual is most likely to open and convert based on her individual history.
3. Personalization is cross-departmental
You wouldn’t expect a single business function to set strategy for an entire organization. Personalization is no different. Marketing alone cannot conceive and implement a holistic personalization strategy.
At Sephora, JustFab and others, personalization efforts cross departments regularly and with impunity. At JustFab, for instance, decisions about customer experience are made across the company. Personalization has been integral to their business from the very start. That means that on some level, every area has to be involved: executives, marketing, merchandising, data science, business intelligence, product, technology, and more.
The only way for marketers to get the resources needed to reach their personalization goals is to get aligned across departments, and, importantly, with the C-suite. At JustFab, executives are quick to say that they still have room to grow and improve when it comes to customer experience. But they have the two things any business needs to implement an important strategy: They know what their goals are, and they have a roadmap to get there. That’s good news not just for JustFab’s business, but for its customers as well.
Find out how your organization’s customer experience compares to Sephora, JustFab and Walmart by visiting the Retail Personalization Index.