How Retailers Are Trying to Please You, On Your Terms

Urgency drives personalization efforts

Author: Andria Cheng

June 9, 2017

On surf brand O’Neill’s website, a click on an image of a women’s sleeveless dress immediately yields many similar dresses at the bottom of the selected item, mostly also sleeveless. Click in the search bar and a small preview box automatically appears next to the bar featuring more women’s items. Come back to the site on a different visit, a selection of women’s products pops up, rather than the mix of men's and women’s items that appeared on the first site visit.

Retailers are seeking to know who their customers are and respond to their demands on their terms—increasingly, in real time. The personalization efforts affect virtually every aspect of customer experience. 

Getting personalization right is increasingly crucial in today’s retail world. Consumers are less loyal because, armed with mobile phones, they have more options to shop wherever and whenever they please.

“This is the future of shopping,” said Kurt Heinemann, chief marketing officer of personalization platform Reflektion, in an interview. The company, funded by venture capital firms including Intel Capital and founded by former Google employees, counts among its clients O’Neill, Godiva, Disney, Toms shoes and Ann Taylor.

And in a sign of market demand, its customer base more than doubled in Q1 alone.

At the just concluded IRCE conference in Chicago, personalization was a predominant theme at both the presentations and on the exhibitor floor.

One-year-old Kidbox, which sends customers curated boxes of kids' clothing, uses data to decide what should go in each box. “We build a team of data scientists in Tel Aviv,” Miki Racine Berardelli, CEO of New York-based Kidbox, told eMarketer Retail. “When a customer fills out the profile, that feeds into if they don’t want certain styles or logos. We have given that product attributes. I don’t think any retailer will be successful without data scientists.” Berardelli added that the company also has personal stylists review each box after the algorithm generates a content list.

To be sure, while personalization is key focus for retailers, getting it done right is still an elusive goal.

A BCG study showed that almost three-fifths of companies struggle to effectively measure and attribute the impact of their personalization campaigns and nearly three-quarters of the survey respondents in its study said there are too few people at their companies dedicated to this area.

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However, a personalization strategy can’t be ignored: the BCG study suggested it will push a revenue shift of some $800 billion over the next five years to the 15% of companies that get it right.

Personalization goes beyond customer experience, extending to customized products.  Under Armour this week debuted its Icon customized shoe program, which allows consumers to pick prints, colors and patterns, and even to use uploaded images on shoes.

The athletic-gear company, which has more than 200 million registered users in its universe of acquired connected fitness and nutrition apps including MapMyFitness, also is studying customers’ purchase history, browsing behavior and store visits and tying that with their eating, workout and other biometric data it gleans from the fitness apps, said George Hanson, VP of Under Armour's North America e-commerce and brand house stores, at an IRCE presentation Thursday.

“We are building a single view of the consumer,” Hanson said. He said the company provides its marketing team with data on when and where people work out so they can better market to customers and leverage geo-location data to drive traffic to stores.

“Most of us have very siloed solutions related to personalization,” he said. The conventional definition of personalization is often about product recommendation, which is driven by data analysis out of sight of the consumer, he noted. "Where we are investing more time is what we call "digital concierge," where the customer... participates in the personalized experience.”