Mastering the Art of Hyper-Personalization in Retail


The concept of personalization and more specifically, personalized service certainly isn’t new. It has been around since the internet found its way into our daily lives. However, despite the enormous benefits of creating a personalized experience for your retail customers, many factors make it difficult for marketers and technical leaders to find ways to continually personalize both their products and the customer journey they provide. In fact, according to Forrester, by 2025, 50% of the marketers who have invested in personalization will abandon their efforts due to either a lack of ROI or the inability to create the fully customized brand and service interactions their customers require. 

So what’s missing? How are some brands realizing significant benefits from their personalization while others while others barely get the needle to move? Read on to discover some tips on how your retail business can be one the winners in the personalization game.

They Keyword is Data

To succeed at personalization, you need data points from many different sources and customer touchpoints; a recipe of behavioral, demographic, and psychographic data that comes together and forms a cohesive, actionable 360-degree, single customer view. You need to be able to interpret these data points, find ways of analyzing them and turning them into insights, and finally, you have to act on those insights by optimizing your customer interactions throughout your entire ecosystem.

Ultimately, the goal with personalization is to achieve a customer experience trifecta: the right product, at the right time, at the right price. Today, we are accessing better information about our customers: contact points, home locations, work locations, shopping habits, shoe size, dress, or pant size, and more.

Emotional Connections

Hyper-personalization is about more than just addressing your customer by name when they log on to your website or walk into your store. It involves a deep understanding of each and every customer, informed by the multitude of data points retailers now have available to them, and using this to customize product offerings, content and experiences in real time. The psychology behind personalization is simple – consumers want to be recognized as individuals. They want brands and retailers to be able to understand who they are and what they want – and they will form deeper affinities with brands who successfully do this.

The ultimate goal of retailers should be to make the path to purchase for shoppers as effortless and seamless as possible. Retailers who do this are seeing the benefits of increased customer loyalty, increased shopping cart size and repeat purchases. Amazon, who are arguably the market leaders in customer experience and personalization, first launched their recommendation tool in 2010. Since then, Amazon have reported that 35% of their total sales have resulted from their personalized recommendations.

Clothing retailer Icebreaker has tested the impact of personalized vs generic recommendations on their website, finding that personalized recommendations were clicked on 40% more often. Creating a positive and functional consumer experience also drives brand loyalty. It stands to reason that if a customer enjoys their experience with a retailer or brand they will be more likely to return, and more willing to recommend the business to their friends and family.

Omnichannel Personalization

While retail personalization has primarily been the domain of online businesses, creating a seamless omnichannel experience will benefit retailers and customers alike. A study by Forrester has shown that companies who are able to personalize the experience across both physical and digital channels can achieve a revenue increase of 5 to 15% across their entire customer base. In-store personalization requires making use of digital in the physical space, increasing the presence of digital touchpoints in physical stores, for example, tablets for sales assistants or customer-facing digital screens.

Effective omnichannel personalization requires the thoughtful planning and consideration of the entire end-to-end customer journey. This involves not only a customer’s experience on a retailer’s website or in-store, but also pre- and post-visit/purchase communications. Cosmetics retailer Sephora does this by sending out location-based notifications to users of their mobile app when they enter the radius around a physical store, as well as following up post-purchase with product recommendations based on what the customer has purchased.

Use Technology to Inform Personalization

Personalized recommendations has been around for about as long as bricks and mortar stores. However, hyper-personalization has started to come to the forefront of marketer’s minds due to recent technological advances such as AI (artificial intelligence) that have made scalable personalization possible. Where in the past a sales clerk would manually recommend a product from their own knowledge of products or from a brochure, AI has enabled retailers to be able to scan millions of individual products to provide relevant recommendations tailored specifically to their customers’ needs. Machine learning and AI technologies are the driving force behind Amazon’s personalized recommendations, their ‘Frequently Bought With’ feature and their fully personalized homepages for each customer – and the recommendations get more relevant and specific the more a consumer uses the service.

As AI technologies continue to evolve and develop, so do their capabilities. While historically only quantitative data could inform AI tools, increasingly sophisticated technologies are allowing machine learning programs to interpret visual or auditory data and discern emotions from this data. In the future, a deeper understanding of emotive cues may allow AI to infinitely personalize the retail space, even understanding whether a consumer likes or dislikes a product going off nothing more than a facial expression.

At FiO, our retail marketing expertise allows us to provide end-to-end solutions that enable our clients to provide best-in-class retail experiences for their customers, backed by our capabilities in data-driven strategy and AI-empowered technology. Sign up today for a FREE trial of our Insight Marketing Platform and discover how you can utilize these capabilities to unleash the power of your data and begin mastering the future of the personalized customer journey.