Hearing from personalization experts - the benchmark
On 30th April, Qubit brought together ecommerce leaders in London’s West End for the first edition of our 2019 “Personalization for the Pros” global roadshow, hosted in partnership with Google Cloud. The London event was the first of many that will take help leaders in ecommerce navigate how to understand the ROI of personalization and how to convince other business functions why personalization is such an important growth strategy.
We kicked off with a presentation from Qubit CEO, Graham Cooke. Graham shared research on the current state of retail, revealing that 84.1% of customers only ever purchase once from a retailer. There are slight nuances based on the type of retailer you are, for example, in fast fashion the number is 81%, in beauty 85% and in general retail it’s up to 88%.
Additionally, the time in which you have to convert a purchaser a 2nd time is, on average, just 16 days. If you don’t get them re-engaged and buying again within that time, you’ve potentially lost them forever!
However, these one-time-only converters represent a huge opportunity for any retailer, and it was revealed that if you can move just 1% of one-time purchasers into making an additional purchase, the impact on revenue can be significant. For a $65mil beauty brand, moving ‘the 1%’ is a $1million opportunity.
How can you move ‘the 1%’? Many in the room would argue that that is best done through personalization.
Demystifying personalization with User Conversion
Personalization as a term used in ecommerce and technology is still one with many different meanings. Therefore, Mark Leach the Managing Director of User Conversion, spoke to the audience about how you can demystify this topic. Mark discussed how personalization gives you an opportunity to naturally enhance the customer experience, as opposed to attempting to change consumer behavior: “Choice is the most interesting factor to experiment with in verticals, as online shopping gives us too much choice. How do we (as retailers) create easier decisions?”
Mark also shared a perspective on when to personalize, and when not to - “Personalize because you have a reason, not just because you can. Whether it’s for the user or business, both are valuable use cases. If you’re struggling for a personalization objective - the ‘right person, the right product at the right time’ is a decent place to start.”
Next up, Nick Martin, Head of Retail at Google Cloud, spoke about how unrivaled access to data will exponentially improve the customer experience. “Technology has enabled experiences that are intuitive and undeniably helpful. Experiences that made your life far more convenient, and highly relevant to your needs at that moment in time. We’re now in a digital, globalized world, where consumers are more empowered and are asking for help and assistive experiences. This is what we’re calling the ‘Age of Assistance’.
“Consumers will continue to have far more touchpoints with your business than ever before. And these interactions produce a wealth of potential data and information about your customers and what they want from your business.
Nick shared that in order to deliver effective personalization, the best approach is to move beyond silos - “an organization’s data is spread across many places; ad campaigns, CRM systems, customer service logs, website app analytics, loyalty programs and so many more. So this means it can be hard to get a ‘single view of each customer’.”
Defining personalization in beauty and fashion
This idea of a single-customer view was something that the panel of experts was also deliberating in the final session of the day. The panel, hosted by Graham, included the aforementioned Mark, Holly Tabor of Nike and Laura Ames of L’OCCITANE en Provence.
The first question the panelists were asked was about how they defined personalization, and how it can differentiate between verticals.
Laura, who has a unique perspective having worked in both fashion and beauty, said that “personalization is all about creating a unique experience for every customer across all channels. As retailers, we're dealing with attention scarcity; consumers are being overloaded with messaging. Getting the same generic experience continually will make someone more likely to ignore your brand and look elsewhere.
“I found that, for example, there are a lot of clear ideas as to personalizing a fast fashion ecommerce space in terms of recommending products and reducing returns. In beauty, however, it's harder to come up with a concept - customers will make a more considered purchase and returns are much less likely.”
When does personalization go too far?
But when does personalization go too far? The question of privacy and ethics was presented to our panel.
“There have been a couple of instances of this reported on various social media platforms where, you'll have a conversation, then the ads will start appearing based on that topic” Graham said. “Social media platforms don't currently allow you to control your levels of privacy without affecting function.
“The key is the freedom of choice. When you're entering details, you're choosing to enter that information. There is an exchange of trust and an understanding that you'll get benefits back. The customer feels like they need to have control of providing that information.”
Holly agreed: “The more you showcase the benefits of providing data to your customer base, the more willing they are to do it. It varies massively across different age groups - younger demographics are very willing to give their data, but expect more from the experience they get back from it. So that's just something to bear in mind, depending on your brand, your vertical and who your customer is.”
How to get out of the silo
When asked about the changes that need to take place to make effective personalization happen, the common theme discussed by panelists was cross-functional teams.
Mark stated that “The most important metric is the one that’s going to enable the organization. It absolutely key to come together to solve problems, so anything that enables real collaboration is a good thing.”
Graham added that “one of the things we've observed is that the true power of personalization comes from the cross-collaboration of teams. We operate naturally in silos. And personalization works best when you remove them."
The panel had a lot of ideas to consider when implementing personalization. Laura urges retailers to focus on testing: “Being able to show what the customers are looking for, is the number one way to get other teams and senior managers on board for more.”
Holly expanded on this idea: “Data is absolutely paramount to getting personalization right. Without good, accurate data, and the right behavioral signals, you won't be able to personalize in the right way. So it's about understanding what data points are important and how you use them.
It's about biting off small pieces and proving value over time. You need a lot of data and time to achieve that. Even if you're a big brand like Nike, you still need a lot of time. And for smaller brands, you need probably even longer to get enough data to prove it.”
Overall, the event sparked much interest in the challenges and opportunities that personalization is undoubtedly presenting beauty and fashion retailers. The next event in the Qubit x Google Roadshow is focused on the Luxury industry and will be held in Milan on 15th May. To find out more and sign up, click here.