How 100 Retailers are Leveraging the Power of Personalization: A Q&A with Sailthru’s Robert Jones

power-personalization

As Sailthru’s Director of Research and Insights, Robert Jones recently oversaw the comprehensive research that went into Sailthru’s first-ever Retail Personalization IndexThis massive research project shines a light on the personalization strategies being used by different retailers, highlighting the most creative and effective among them. Here, Jones explains the purpose of the Index, the trends he discovered, and the biggest opportunities in personalization still awaiting digital marketers.

What exactly is the Sailthru Personalization Index?

Robert Jones: Our Personalization Index ranks 100 retail brands according to how well they personalize the customer experience across multiple channels. Personalization isn’t just about customizing the experience on one channel, it’s about personalizing and integrating the customer experience across every channel–site, mobile, email, and traditional and in-store channels.

As brands look for ways to compete with the largest players, such as Amazon, it’s increasingly important that they find ways to provide value outside of price. We believe personalization is one key way brands are going to be able to do that.

 

How is the Index useful to retailers?

First, it gives retailers a sense of where they stack up against their competitors, both broadly and in specific subcategories.

Second, we hear a lot about Amazon as the brand that’s going to overtake everyone (and they may), but there are a lot of companies doing much more interesting things when it comes to personalization. There are other companies that brands can emulate. The Personalization Index shows brands competing with strategies that go beyond price and distribution channels.

 

What did the standout brands do differently from the rest?

There are a lot of things that retailers such as Amazon, Walmart, and Macy’s can do because they’re larger, but there are a lot of things that they won’t do because they don’t scale in a specific way, or because their audiences are very generalized. The biggest opportunity is for other brands to leverage their domain knowledge and their specific knowledge about their customer base to create bespoke experiences that aren’t scalable in the way Amazon or Walmart would need them to be.

 

Which brands from the Index are standing out with “bespoke experiences” you reference? Why?

Sephora topped our results by doing almost all of the things we were looking for. From their site experience to email to mobile and in-store, they’ve built a digital experience that tailors products and messaging to customers of all experience levels and types. Their mobile app provides the best examples of this, making product recommendations not just based on customer data and preferences, but also allowing customers to “try on” different looks using a video filter tool.

Similarly, JustFab and Rent the Runway both demonstrate a real understanding of their customers and the challenges inherent in clothing shopping, and cater their experiences and messaging to reflect that. The way JustFab recommends products feels like having a digital personal stylist, and RTR’s use of customer photos in reviews–showing dresses on customers with similar body types–is one of the smartest I’ve seen.

Home Depot and Lowe’s are two. They have constructed entirely different experiences for contractors compared to customers. They understand very well how the groups are different.

They also understand that one of the biggest challenges for a customer coming to Home Depot is finding a single two-and-a-quarter-inch bolt. So Home Depot allows you to put that item in your online shopping cart, and then when you open the Home Depot app in a store, the app will help you locate the items in your cart.

Another great example is Foot Locker. They’ve figured out that a sizeable contingent of their customers are sneakerheads–people who are passionate about new sneakers and who collect them. So Foot Locker’s app and their loyalty program have special features catering to these customers. Higher-level members of their loyalty program get head starts on reserving shoes and learning about new launches. The app sends push notifications about when and where new launches will be occurring, and customers can reserve a pair of shoes in advance.

 

Which brands are excelling in mobile? Were there particular apps worth noting?

In general, brands are still struggling with mobile a little bit, figuring out how it fits in and how to use it.

I think Sephora and Net-a-Porter have the slickest app experiences. Sephora’s app almost acts as a digital personal shopper, with a really robust recommendation system for makeup. Then you can try the makeup on in-store and schedule appointments. Sephora also has a really strong email program.

 

What mistakes do brands consistently make when trying to personalize?

One of the things I became acutely aware of while working on this study is the amount of information customers are asked to fork over to brands. There were too many brands that asked for information and then didn’t use it in any meaningful way. I think the big mistake being made here is less collecting the data and more not making it clear to the customer how the information they’re providing will benefit them. And if you can’t make the case that it will benefit the customer, you shouldn’t be asking for it.

The other mistake had to do with advertising. Toys “R” Us, Walmart, and Target all had ads on their sites, sending me to other stores. Why would you offer somebody the opportunity to leave your brand experience?

The apps were even worse. A good fifth of the mobile apps had such egregious ad experiences that the brand would have been better off not having an app at all. Some apps show multiple full-page pop-up ads before a customer even has a chance to log in. You’d even see ads for competitor brands because no one was actively managing which ads were displayed.

You shouldn’t be trying to monetize your app. The app is a way to help customers engage with you in a specific way or while on the move. Some of the apps we looked at had so many ads in them, they were essentially unusable, and the app store reviews reflected this.

 

We often think of brick-and-mortar retailers as digital laggards. But many of them were among the top-ranked brands in the Index. Why is that?

Retailers with physical stores have a number of advantages. Apple has found that stores act as both excellent showrooms and advertisements for the brand, and they give customers a way to have a tactile experience with the brand.

I think a big part of it is resources. Even if we think a brand like Macy’s is behind on their digital strategy, they also have resources that newer players don’t. They may be behind the cutting edge when it comes to social interaction or app development, but they have the opportunity to lead the charge on beacon programs and in-store connectivity because they have stores the size of city blocks.

Personalization is not just about what a brand is doing, but also whether a customer can dictate, when, where, and how she engages with a brand. Some customers will choose brick-and-mortar stores. Rent the Runway is a digitally native brand, but they have locations where you can see products and try them on, even if the expectation is not that you’re going to walk out of the store with the product that day.

Also, it was more common for digitally native brands not to have an app, and that’s something that cost them points in our scoring. Some digitally native brands may be too new to have built an app just yet, or maybe they’d rather rely on the mobile web. The larger traditional brick-and-mortar players all invested in apps years ago, and now they’re working on their second or third iterations.

 

What else does the Index tell us about customer engagement?

It shows how important it is for brands to engage with customers outside of a transaction. Because Amazon only cares that you buy through them, and not what you buy, they seem to only want to engage with customers during a transaction. Lowe’s and Home Depot, by contrast, have extensive DIY content that is useful in its own right and also gives customers a reason to visit the site, even if they don’t intend to buy anything that minute. That content also gives retailers a way to advertise their products and to direct customers to specific products or sales.

Sephora has a rich library of makeup tutorials. That extends to the in-person experience, where a shopper can schedule an appointment with a consultant who can walk through the process of how to apply and use products. This all creates positive experiences that go well beyond a particular purchase.

 

Where are the biggest missed opportunities for brands to personalize?

There’s a lot of opportunity for retailers use robust digital profiles to connect the online and in-store experiences. I know that’s the hardest part, but that’s the part  that they really have to figure out if they want to continue to be relevant and compete with the behemoths.

Then there’s smart data use. Being transparent with customers about what the data they’re providing will be used for, and using it in a meaningful way to improve and personalize the experience. Many brands struggle to make meaningful use of digital profiles, or to personalize email or mobile messaging with the data they collect. These brands should step back and think about it from a customer point of view–why would a customer *want* to provide that information? What would make it worth their while, from a personalization standpoint? What’s the most useful way the brand can put that data to work for the customer, and not just the brand?

The best brands in the study understand this and do two things: First, they make the process of collecting data painless. JustFab’s style quiz is fun to fill out, and makes you think about your personal style. Amazon goes in the complete opposite direction, opting to collect data on your activities, rather than making you answer questions or fill out a profile.

Second, they communicate the immediate benefit of providing that data. When Sephora asks you for your most common skin problems, you know it’s going to have an immediate payoff in terms of the products you’re about to view. When Rent the Runway asks you about problem areas on your body, you know the dresses they’ll recommend and send will be better-fitting in a way that really matters. When Toys ‘R’ Us asks you for your child’s birth date, they make it clear that it will lead to a special birthday card and offer.  Some retailers gamify the process, providing loyalty rewards or offers in return for completing a profile.

On the other hand, the worst brands ask the customer to provide a wealth of personal information or interest data, and then turn around and don’t appear to do anything with it. When you ask your customer for their gender and age and then send them the same email blasts with mismatched products, you’re basically admitting to your customer that their preferences don’t matter.

 

To learn more about the Retail Personalization Index research, check out how we did it.