Three significant reasons why personalization impacts the retail experience

To say that personalization is an important part of the retail experience is not a recent truth. And because we’re not in the business of telling our customers the obvious, we’ve gone beyond the basics in our 2022 Customer Engagement Report, hosted by Twilio. Because? Because while you may understand that personalization is important, articulating how it makes a difference in your customer’s shopping experience is not so obvious. Below, we’ll share three reasons why investing in customer personalization is key to long-term loyalty and lasting success.

Reason #1: The Big Data Dilemma

Only 40% of consumers say they trust brands to keep their personal data safe and use it responsibly.

Challenge: Your customers want personalized experiences. You know that. They also want to know how and why you use their data. And you know that. The question is, if a customer wants a personalized retail experience, how can a company more directly and transparently collect data to provide it?

Solution: primary data. You see data-driven experiments on your Amazon homepage or Spotify suggestions. First-party data enables brands like these to create accurate customer profiles based on their habits, preferences and purchases on company apps or websites. And because the data doesn’t come from a third party, it makes it easier for customers to think. In our 2022 Customer Engagement Report, we saw that 85% of consumers said they want brands to use only first-party data when creating personalized services. And you don’t have to limit yourself to “if you like this, you might like this” experiences. Get creative with your own data to highlight your customers’ shopping experiences.

The pinnacle of retail: A great example of using first-party data to deliver a more personalized experience is Rebag’s AI-powered chatbot Clair, which uses more than six years of user data to simulate a “Shazam for Exchanges”-like experience. Sellers can scan the bag they would like to rate right from their phone from the comfort of their own home. Clair then uses bag data from more than 50 brands to identify the designer, bag model and typical retail price.

As retail organizations race to find new ways to interact with their customers, this type of technology stands out, especially since Clair is a learning bot. Over time, they will also be able to learn from their mistakes and work on recognizing fake bags instead of real ones. This is particularly innovative because it is a service that the human eye cannot provide from afar, and it provides users with a reliable and secure experience that would not be possible without leveraging existing user data for self-improvement.

Reason #2: The Omnichannel Challenge

Only 35% of companies believe they are successfully achieving multi-channel personalization in 2022.

Challenge: Your customer wants to reach them when and where is best for them, with content they really care about – and you want to give them that autonomy! But actually delivering a multi-channel strategy for a cohesive shopping experience is another story. You know you need it, but when it comes to actually integrating it into your existing platform, difficulties arise. You are not alone. Most of the companies surveyed in our report share the same frustrations with technological and organizational limitations.

Solution: As tempting as it may be to keep adding data to your existing legacy platform, it may be time to take a closer look at whether this unique approach to an omnichannel strategy is working. Starting from scratch can seem daunting, but finding a platform that can add channels over time (rather than trying to connect several) can be a smarter long-term solution to enabling the personalized experiences that retail customers expect.

Plus, every time your customers interact or do business with your brand, they’re providing you with a wealth of information about their likes, dislikes, and needs. With isolated channels, your brand can’t capture that information, making it very difficult or even impossible to deliver hyper-personalized experiences that pick up where the customer left off. Having a system to collect all your information makes your experience better.

The pinnacle of retail: Filling prescriptions can be a real challenge. Walgreens is a great example of using first-party data in multi-channel marketing to create personalized cross-channel experiences that facilitate the replenishment process.

Using the Walgreens app, a customer can scan the barcode on their prescription bottle and automatically generate a refill for pickup at a local store. An individual can even order a refill by responding to a Walgreens email reminder or simply calling the pharmacy.

This type of approach means a steady shift in the industry away from prioritizing automation and multi-channel communication. There is no more fear that personalization will take a backseat without face-to-face service. The speed, accuracy and purchase support enabled by automation have significantly improved retail experiences. We now expect deeper personalization that continues to improve as new channels and technologies emerge.

Reason #3: Hyperpersonalization is the future

Almost half (49%) of consumers say they are likely to become repeat customers after a personalized shopping experience at a retailer.

Challenge: It’s no longer enough to make a simple effort to personalize your customers’ experience with your retail brand. With 72% of consumers now saying they only use marketing emails tailored to their personal interests, it’s in every company’s best interest to figure out how to safely leverage user data to create more personalized experiences for their customers. It’s not just a matter of mere preference. It is about customer loyalty and long-term business survival.

But figuring out how to achieve hyperpersonalization again can seem incredibly daunting. Without the right tools to automate real-time insights and strategically segment your audience, your user data is wasted.

Solution: seamless, secure, hyper-personalized experiences where your customers can be contacted exactly the way they want not too far into the future. With the integration of customer data platforms and CPaaS (Communications Platform as a Service), retail companies will soon be able to deliver this type of experience to their customers, even if they are not multi-million dollar companies. Meanwhile, retail businesses can work to aggregate their customer data in a secure location (such as a customer data platform) to leverage the power of omnichannel.

The pinnacle of retail: Vacasa Vacation Rentals is doing just that, developing a smart customer engagement strategy that sends personalized messages to travelers on the go. By removing the friction of the check-in experience by allowing customers to communicate via email and SMS, Vacasa was able to increase guest bookings by 3x with personalized email campaigns.

Automated, continuous and personalized communication not only improves your customers’ experience with your retail brand. It literally increases your results and keeps them coming back for more.

Create a better retail experience in 2022

Compared to other industries, retail is already embracing and using personalization with the rise of e-commerce over the past 20 years. With the pandemic, however, retail businesses large and small have a great opportunity to leverage their online consumer data to further drive customer engagement.

Meg Buchanan, Senior Content Marketing Manager, Twilio Segment.