How Do Mobile Devices Factor Into the Future of In‑Store Personalization?
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 second annual Retail Personalization Index, for which we analyzed more than 250 brands on their personalization prowess across every channel. While personalized physical store experiences weren’t a huge part of a brand’s score… we couldn’t help but notice that the retailers who nail them tended to be toward the top of the list.
According to our survey of 1,000 British consumers, email has influenced 30% of millennials to visit a store. Sephora, the top ranking brand on both Indexes, also happens to be an omnichannel champion. If you’re a Sephora shopper — the brand’s loyalty is also so strong that most customers won’t consider a competitor — you can count on a connected experience. Emails remind you of your points balance and store events. If you’re nearby, a push notification will remind you there’s something in your shopping cart.
Mobile: The Centerpiece of In-Store Personalization
What makes Sephora so savvy? For one thing, the cosmetics giant understands that 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 unlock and personalized product recommendations from sales associates upon arrival.
McKinsey research from last October highlights the importance of in-store personalization. According to the consultancy, the two aspects of personalization shoppers value the most are relevant recommendations they may not have thought of on their own and communications with brands when they’re in shopping mode.
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.
Looking Ahead with Acquisitions
Between disparate teams and legacy systems that may be in place, change is often slow to come to massive global retailers. However, one advantage these organizations have is millions of dollars necessary to buy top-notch technology.
Nordstrom, whose employees already use Style Boards to create personalized outfit recommendations for their clients, acquired BevyUp and MessageYes earlier this year. A mobile clienteling tool and conversational commerce company, respectively, the two acquisitions will do nothing if not help Nordstrom create a more personalized in-store experience.
Target is another legacy retailer that’s improved its in-store personalization through “acqui-hire” deals. For one, Powered Analytics combines mobile technology, location data and machine learning to connect retail apps to in-store shopping. In other words, Powered Analytics helps Target pinpoint a shopper’s exact location in the store. Product recommendations and messages can then be delivered accordingly.
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 our second Retail Personalization Index demonstrates. What would have been a middle of the pack score last year didn’t even make this year’s list. From one Index to the next, Amazon’s score stayed exactly the same… and dropped from 17th to 50th place.
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.