Retailers Are Embracing Personalization to Win Big This Holiday Season
As hectic as major shopping holidays are, there's a method to the madness.
Brands will be well on their way to putting their Black Friday and holiday campaigns into motion knowing that even the most airtight plans can fall victim to last-minute glitches, surprises and the inevitable headaches that go along with the break-neck pace of the holiday season.
This year, shoppers will expect more from the brand experiences they have during this critical time when they take advantage of offers and promotions. E-commerce teams are required to not only deliver campaigns, but also react to the changing needs of customers "in the moment."
Brands continue to fight for the attention space of the consumer. McKinsey notes that each consumer will have an "Initial Consideration Set" — i.e., when you think of a category, say jeans, what brand do you think of? Now do the same for sportswear. There are a couple of immediate brands that come to mind. However, outside of the first position, everything else is up for grabs.
Forever 21 is an unfortunate example of changing shopper trends. The global chain was a leader in the fast-fashion market for nearly two decades, and currently operates more than 800 stores worldwide. With bankruptcy proceedings looming, it may well be forced to close 180 locations. We can only hope that there's some positive future for the employees who were dedicated to the cause but were unable to react fast enough.
Make a Fast and Lasting Impact on Shoppers
Online shopping traffic peaks from Thanksgiving through early December, therefore brands must do all that they can to attract and engage shoppers, whether they're first-timers or brand loyalists. With the knowledge that the majority of retail revenue stems from just a small fraction of customers, brands must devise and execute a cohesive and authentic engagement strategy to reach consumers during peak seasons. Brands must look to take full advantage of capabilities that can be implemented with little effort, delivering out-of-the-box value with minimal configuration.
One of these technologies is built around the needs of the digital merchandising teams within e-commerce organizations. The capability that these teams can deploy is to tailor the offer based on past and explicitly signal interests — i.e., personalization. For high-traffic shopping peaks, this not only speeds up time to value and revenue, but also allows brands to deliver multiprong campaigns that personalize to any shopper based on their interests. The result is memorable customer experiences, leading to increased loyalty and lifetime value.
There are a number of ways retailers can make an impact on the bottom line with two fairly easy to implement personalization strategies this holiday season. The first is focused on driving customer loyalty and engagement.
As mentioned previously, the majority of revenue comes from a small fraction of very loyal customers. In fact, loyalty-based personalization can produce some of the most lucrative revenue uplift. Fifty-five percent of the brands featured in a recent Gartner L2 report adopted a tiered loyalty structure in 2018, compared with 48 percent in 2017, indicating steady growth of loyalty programs. While personalization is multifaceted and goes beyond supporting customer engagement and retention, it's a major factor in the success of retail loyalty programs.
Loyalty segments in a CRM database can be uploaded, and experiences targeted according to any attribute, resulting in seamless and personal user experiences. Here are just three simple strategies that digital merchandising teams can employ before the 2019 holiday season begins:
- “Signpost” loyalty benefits: Display loyalty benefits for all site visitors to increase revenue. This may include specific discounts on certain products on product detail pages, expedited delivery, or just a persistent message in the navigation.
- Loyalty tier upsells: Encourage customers to purchase products by surfacing specific point levels within a loyalty tier, and the amount needed to move to the next loyalty level, alongside new benefits the member will receive.
- Loyalty in emails: Connect user behavior onsite with loyalty level, sending personalized emails to the user with tier information and benefits to encourage visits and revenue. Email can also be used to supercharge loyalty promotions (e.g., extra points during seasonal periods).
Make Personalization for ‘Gifters’ a Top Priority
During the holiday season, gifters make up a large percentage of shoppers. While hard to quantify, for some brands this segment can be as large as 80 percent to 90 percent. This segment of shoppers has completely different requirements from those purchasing for themselves. Brands should not miss the opportunity to target gifters. By using behavioral indicators (e.g., repeated visits to the gifts section of a website), retailers can customize their visit by deploying a social proof experience that shows what’s trending or display a gift finder tool that will make finding what they’re looking for that much easier.
In order to increase the efficacy of the offer, be direct and ask questions. For example, queue up a question on whether visitors are purchasing for themselves or others, and deliver it when they hit a product landing page.
It’s a missed opportunity if brands don’t take advantage of the increase in online traffic during peak shopping periods to engage visitors through strategic personalization tactics that are proven to work. There's no better time to reach shoppers and show them that your brand is at the top of its game when it comes to delivering the right experiences at the right times.
Simon Jaffery-Reed is vice president of product at Qubit, a personalization software.
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Simon Jaffery-Reed is the VP of Product at Qubit, a personalization software.
As the Vice President of Product at Qubit, Simon Jaffery-Reed is responsible for the direction of the company’s product roadmap as well as overseeing product management, product specialists and product design teams.