How Do Mobile Devices Factor Into the Future of In‑Store Personalization?
By Mike O'Brien | October 7, 2019
A stellar personalized customer experience isn’t just about taking data from, say, email and using it to customize your customers’ email experience. Personalization is about using the data from every channel to improve the experience in any channel. Including the physical stores.
To pull that off, retailers must coordinate many different data sets at the speed of life, rather than the far slower pace of business operations. Of course, that’s far easier said than done. Data is the biggest barrier to deploying a truly personalized customer experience. Most retailers don’t have the operational organization to share their data across every channel. However, some of them do.
We recently completed our third annual Retail Personalization Index, for which we analyzed more than 250 brands on their personalization prowess across every channel. More than email or website, mobile was the litmus test for a brand’s overall personalization capabilities. The mobile category had 20 available points; the average retailer just earned 5.5 of them. However, among the top 10 brands, the average score was 17 out of 20.
Something else that set the top performers apart was how much they bring personalization to their brick-and-mortar stores, a bigger part of our updated methodology. All 10 of them offer in-store personalization, whether that means relevant mobile messages like Sephora and Ulta, or a “store mode” option for apps, like Nordstrom and The Home Depot.
Mobile: The Centerpiece of In-Store Personalization
Those examples highlight how much smartphones are the common thread tying the entire shopping experience together. We read the majority of our emails on our phones, something most people don’t go to the bathroom without, let alone a store.
Almost every channel relevant to the buying experience is already fully integrated in two places: in the customer’s head and on their phone. That’s why we called mobile the crossroads of commerce and why smartphones are the centerpiece of in-store personalization.
Smartphones add to the shopping experience. Carrying all of the information in the world in our pockets lets us research items before we buy them. It’s common practice to read reviews and compare prices while in a store. As a result, smartphones influence 56 cents of every dollar spent in brick-and-mortar stores, according to Deloitte Digital research.
When we outlined some of the technologies that enhance the in-store experience, smartphones were also the common thread. Mobile apps are how beacons transmit messages to us in real time, such as Sephora’s push notification strategy. That same geolocation technology enables Frank And Oak to roll out the red carpet for high-ranking loyalty members. When he gets close, a beacon alerts a staff member, who prepares a fresh cup of coffee for him.
Smartphones also house the loyalty programs that, when paired with geolocation, create more personalized shopping experiences. For example, DSW VIP members get rewards unlocked and personalized product recommendations from sales associates upon arrival.
This year’s Retail Personalization Index included a survey of 1,500 consumers. We asked about their most recent purchases, and likelihood they’d make more and recommend retailers. There was a strong correlation between customer satisfaction and retailers that bridge their digital and physical channels. Similarly, McKinsey research found that communications with brands when they’re in shopping mode is one of the most welcome forms of personalized marketing.
There’s no greater sign of “shopping mode” than when someone is literally inside your store. Why not utilize your data to make recommendations right then and there, taking your clienteling to the next level?
Clienteling is a common practice in retail stores. Sales associates make connections with customers and become their sales associates. These employees all have their own client books, which log transactions and whatever else they deem necessary information: her sizes and preferred styles, whether she’s a sale shopper. It creates a sense of in-store personalization, albeit in an analog way.
Employees work off first-hand information they’ve gleaned themselves. You have far more data; imagine how powerful it would be if sales associates had access to it. Knowing a customer’s full web, mobile app and social engagement history — as well as the predictive models that determine what she’s likely to buy and when — empowers them to make much stronger recommendations.
The Boston Consulting Group estimates that prioritizing personalization will help brands outsell their competitors by 30% this year. More and more companies are taking that projection to heart, as the Retail Personalization Index demonstrates. Coming in 17th two years ago, Amazon has since dropped down to 56th place. It’s not that the ecommerce giant got worse; other retailers have just gotten better.
At the end of the day, the overwhelming majority of retail sales take place in brick-and-mortar stores. But they don’t have to. Consumers are ultimately going to choose to patronize the retailers with the best experiences, which means a blend of physical and digital. That means click and collect options, in-store experiences like Apple’s iPhone photography classes or REI’s various meetups. And of course, that means greater personalization.
2021 Retail Personalization Index Consumer Survey: Value-Based Personalization is the Future of Retail Marketing
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