How can retailers master the personalisation spectrum to drive success?

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By John Gallemore, CEO of THG Ingenuity. THG Ingenuity powers THG’s own brands such as Myprotein and Lookfantastic and provides a fully integrated end-to-end e-commerce platform for third party clients and partners

Personalisation has long been a focus in online retail, with studies showing that a tailored customer experience will not only drive traffic and sales but ensure long-term loyalty and retention rates. 

However, implementing a personalisation strategy that truly adds value isn’t a simple undertaking. It requires complex technology integration and data collection on a large scale; neither of these are always readily available. Personalisation can therefore seem like a difficult task, particularly for those retailers that must rely on various, often disjointed, third-party suppliers to help them deliver it. 

Indeed, with Gartner predicting that 80% of marketers will abandon personalisation efforts by 2025 due to a lack of ROI, it seems that the industry is further away from providing bespoke customer experiences than previously thought. 

So, how can brands get ahead on personalisation and showcase the increased ROI it can deliver? 

What is personalisation? 

At its core, personalisation is the pursuit of enhancing customer experience by creating relevant and tailored interactions between brands and consumers.  

The concept has evolved in recent years to take on many different forms – but we break it down into four central pillars. These are communications, product offering, product customisation and customer-driven new product development (NPD). 

Communications 

Creating bespoke communications across different touchpoints in the purchase cycle is perhaps the simplest way to deliver personalisation to customers. From emails to social campaigns and web content, communications play an important role in improving conversion and retention. This in turn helps to reduce customer acquisition costs, ultimately making marketing spend more efficient.  

Tracking emails are one example of where personalised communications can be used to deliver an enhanced customer experience. Consumers now expect to be served order updates by the brand they have ordered the items from, rather than the courier delivering them. Instead of receiving generic emails from third-party couriers, which can vary in quality, brands should take the opportunity to own the customer journey at every touchpoint, engaging with shoppers throughout and putting them at ease.  

When we implemented the personalisation capabilities of our brand-led solution, THG Delivered, for a new client, around one in five sales were generated through email alone. 

Product offering 

A personalised product offering puts choice into the hands of your customer. It gives them the opportunity to decide – in exciting and engaging ways – the products they want to buy. 

A simple way to deliver this is via a ‘Build Your Own Bundle’ function, in which shoppers can create a bundle of items that best meet their needs. It’s something that works well on the Lookfantastic site and is especially relevant in FMCG, where the aim is to drive regime purchase, but is highly applicable to other sectors, too.  

A common challenge faced by retailers is that they operate a single ‘.com’ website that ships internationally, meaning their product range cannot be adjusted to specific territories. So, our recommended strategy would always be to launch individual, localised websites that allow brands to adapt their offering as per the needs of each market. 

Product customisation 

A step further than customising your product offering is giving shoppers the chance to personalise the product itself. For instance, we recently worked with a well-known confectionery brand to offer personalisation of its iconic tins.

The partnership allows chocolate lovers to choose the contents of the tin based on their favourite flavours, completing the experience with a personalised gift card to accompany the end product. The solution increased the average order value by 90% and delivered a significant sales increase, showing the direct impact personalisation can have on the bottom line. 

Product customisation has several key overall benefits. Firstly – and perhaps most importantly – it creates differentiation. It also means that brands can charge a premium by putting design in the hands of the consumer, making even mass-market products feel bespoke. This in turn increases category value, rather than having to take a discount-led approach to drive sales.  

Secondly, customisation also taps into consumer desires to express individuality, by empowering them to be creative on your brand canvas. And it generates data that clearly shows which customers are more inclined towards higher-end, more premium products. This acts as a future marketing tool, especially for those brands that offer ranges at multiple price points. 

New product development 

New curly hair SKUs for leading haircare brand, Christophe Robin, were launched following a spike in search terms at Lookfantastic

In many ways, the final pillar of personalisation – NPD – is the most difficult to execute effectively but delivers the most value in the long term. 

Historically, brands have relied on upstream marketing to identify audiences for their products – think focus groups and consumer profiling. Analysing hard, transactional data, meanwhile, creates a more accurate representation of consumer needs and buying habits. Instead of building customers for their products, brands can build products for their customers. 

As an example, when Ingenuity saw a 170% year-on-year spike in search terms for “curly hair” on the Lookfantastic website, we designed and launched four new curly hair SKUs for our leading haircare brand, Christophe Robin, in September 2021. The brand’s ability to rapidly respond to consumer requirements has already driven promising sales for the range.  

Moreover, once a new product has come to market, the test and learn process will continue to define what’s selling and what shoppers are engaging with, helping brands to make informed decisions across the board. 

Going direct-to-consumer (D2C) 

Clearly, mastering the four pillars of personalisation hinges on a brand’s ability to leverage customer data and tech at scale. But this is difficult, if not impossible, to do without a D2C route to market and the direct access to data this affords.  

The powerful capabilities of D2C evidenced over the past 18 months have dramatically accelerated the shift towards D2C across the globe – most notably the increase in demand which meant that customers were easier to acquire in D2C channels than they had been previously. This has unlocked the potential of these strategies for the future. So, if ecommerce is to make genuine strides towards deeper levels of personalisation, moving to a D2C model is a great place to start. 

Contact the team to find out more.