The modern consumer has come to expect engaging, personalized experiences at every step of the shopping process from online browsing to in-store purchases. Seamlessly providing this customized and personalized experience helps brands meet and exceed customer expectations while also avoiding the dreaded “buyer’s remorse.” When shoppers receive highly personalized and guided shopping experiences, they are more likely to have confidence in their final purchase, resulting in fewer returns and greater customer loyalty.
With retailers bracing for an uncertain holiday shopping season due to the COVID-19 pandemic, personalization could be the key to their success. With the right technology implementations, such as advanced data analytics solutions, they can easily deliver the richly curated holiday shopping experiences customers crave, whether online or in-store. Here are the top three reasons to leverage advanced data analysis to personalize customer shopping experiences for the 2020 holiday season.
Enhancing Customer Loyalty Programs
Customer retention is well worth the investment of retailers’ time and resources, as repeat customers typically spend more than new ones. In fact, studies indicate that 40% of e-commerce revenue is sourced from return customers, despite only comprising 8% of all customers — making the security of their long-term loyalty that much more important during the holiday season.
A strong customer loyalty program is critical to attracting these return customers, and advanced data analytics is key to its success. Using artificial intelligence (AI) and behavioral data analysis, these solutions can continually monitor a retailer’s customer base and identify shoppers who are ready to reach the next tier of a brand’s loyalty program. A solution analyzes customers’ online and in-store behaviors and their cost-to-serve curve per household. It incorporates this data into targeting those who are statistically more likely to have the greatest and most profitable spending potential by analyzing average order size, order frequency, returns, average spend and more.
Based on these variables, the advanced data solution can then send prescriptive actions to the retailer’s internal stakeholders, recommending how to target specific customer clusters with custom-tailored offers that will enable them to upgrade their loyalty program status. These strategic adjustments make any customer loyalty program more effective and personalized and can be done quickly and easily. Naturally, the more clusters a retailer has, the greater the level of personalization it can reach. An advanced solution can offer the strongest clustering capabilities.
Providing Guided In-store Shopping
Curation of services and products isn’t just for the online shopping experience — customers expect the same level of customization and guidance while shopping in brick-and-mortar stores. In fact, with customers endeavoring to keep their in-store shopping experiences as fast and efficient as possible during the COVID-19 pandemic, guided shopping is more crucial than ever.
Advanced data analytics enable store managers to strategically design their floor plans and configure labor with curation and guidance in mind. For instance, consider a clothing boutique preparing for the holiday shopping season. Using advanced data analysis, the retailer’s merchandising team discovers that a scarf is frequently bought with a particular winter jacket online.
By taking advantage of this insight, the merchandisers can design the store floor plan (using a planogram) to feature the jacket and scarf together on the same front-window mannequins, with the items’ in-store displays also placed close together. This simple adjustment provides customers with curated, in-the-moment shopping inspiration while simultaneously encouraging the purchase of multiple items. It’s a win-win: shoppers leave with a fully styled outfit and the retailer has increased its number of items per transaction.
Advanced analytics allows retailers to replicate the online curation found in holiday buying guides by strategically bundling complimentary items to maximize both profits and customer inspiration. This strategy has led to remarkable success in increasing basket size via learning about online basket components and applying those insights to brick-and-mortar stores.
Make It Personal with Advanced Data Analytics
Whether a brand is e-commerce only, brick-and-mortar or a mix of both, it can absolutely benefit from providing customers with personalized experiences, and advanced analytics solutions can be the keystone solution to achieve this. While the pandemic has created uncertainty around this holiday season’s sales numbers, personalization can help. By providing customized and curated shopping experiences, brands can maximize their holiday sales revenue while engaging with their consumer base, ultimately securing a shopper for life.