Retail Marketing: Using Technology to Drive Personalization at Scale

retail marketing

We’ve heard that personalization should be at the core of retail marketing strategy. Does this mean that you send discounts on jeans to previous customers who bought jeans? Yes, that’s a part of it, but there is so much more. Every touchpoint needs to make the customer feel like they are having a one-on-one conversation with you. However, from a business standpoint, your strategy needs to be scalable as well. The question then becomes about balancing scalability with that personal touch.

Bob Ghafouri, Senior Managing Director, Founder, Bloom by Accenture recently addressed this question and others at WE Prosper Summit.

How Can You Scale Personalization?

Platforms are disrupting every industry. Retail marketing is no different. In fact, platforms can enable you to achieve personalization at scale. They are able to do this by focusing on three elements:

  1. Experience Disruption- creating a frictionless customer experience that makes everyone pivot. Eg: AirBnB made it so convenient to find the comfort of home in a new city that people started to prefer them to hotels for certain types of trips.
  2. Business Model Disruption- changing the value chain or existing business models to find an advantage. Eg: Dollar Shave Club cut out other players in the value chain and went direct to consumer. By doing this, they were able to keep costs very low and provide value and convenience to their customers.
  3. Technological Disruption- when technology enables you to take leaps, speed up innovation or benefit from convenience. Eg: Amazon’s Redshift platform- a new business could use this to launch themselves into the market in a matter of days

These disruptions all allow retail marketers to personalize their offerings. For instance, experiences can be curated to meet customer preferences. Similarly, value and/or convenience can be factored in based on what is most important to each customer segment. With the help of technology, these offerings can remain customized but can be scaled as businesses grow.

What do Retail Customers Want?

When it comes to retail, customers know what they want. They want personalization & control. This means that they don’t just want to be offered a multitude of choices. Options generated by retail marketing should cater to their preferences. Furthermore, they want to be in control of their journey and the information you hold about them. The statistics speak for themselves:

  • 45% of consumers left a website due to being overwhelmed by too many options
  • 82% of customers are willing to share data- as long as there is transparency, control, and service
  • 79% of consumers have never felt a brand was too personal or invasive
  • 81% of consumers will shop more if you recognize, remember, and make relevant recommendations
  • 75% of consumers want to control their journey

If you’re in retail marketing, the data above shows you that listening to your customers is a large part of the exercise. Let them educate you on how best to serve them.

How can Retail Marketing Address Customer Wants and Needs?

Think service design: a dynamic service experience is critical to getting 1:1 personalization. Customer experience should be designed in such a way that every touchpoint must feel personal. Focus on three elements to develop this design:

personalization

Personalized Shopping: Stalking is Not Personalization

You have several kinds of data at your organization. You don’t have to track your customer’s every move or stalk them in order to get insights. Personalized shopping can be driven by combining different types of data- both your own and that acquired from third parties.

You can use transactional or historical data + shared intent by the customer + insights from machine learning that can provide inferred intent. These three combined can provide actionable insights and be powerful to drive personalization. Further, your communication can be more proactive through these.

For example, your customer may have bought entry-level luxury handbags before. You then notice that they add a high-end luxury bag to their cart and abandon it there for some time. This shows you their intent or preparedness to spend on a big-ticket item. Using data science, you can analyze similar patterns among other customers to predict the value of their next purchase or even predict the likelihood of a big-ticket purchase on their next transaction.

When you have this kind of insight, you can send them tailored offers- maybe a personalized shopping experience in-store or a promotion offered specifically around high-end handbags.

Personalized Merchandising: Profiling is Not Personalization

Data and machine learning are powerful tools in retail marketing, of course. Data-driven segmentation can also help you refine personalization. However, even the best algorithm may not be enough to create something highly personalized. Applying human intuition on a digital platform is what will get you there.

For instance, let’s consider the previous example. Your predictive model indicated that the customer is ready for a luxury purchase in their next transaction. However, as a seasoned retail marketing professional, you may realize that the bag remaining in their cart is a sign. Your instinct can take you from prediction to anticipation. Prediction is about retailers being in control, but anticipation puts the control back in the hands of the customer.  In this case, your experience tells you that the customer is hesitant about making such a big decision.

Knowing how likely they are to make a purchase empowers you to approach them with personalized merchandising. You may send them a video about craftsmanship on the brand of handbags they are interested in. Thus, you showcase the value of the product to them. On the other hand, you may realize that they are ready to make a luxury purchase but maybe the handbag is a bigger commitment than they are ready for. In this instance, personalization could be in the form of promotions on belts, wallets or other smaller items from the same brand.

Personalized Advisor: Chatbots are Not Personalization

Retail consumers seek experts just like anybody else. They are looking for personalization in the form of advice. While chatbots are a nifty solution to interact with customers at scale, they cannot replace real advice.

In the spectrum of virtual to real experts, there are three archetypes that are typically used in retail marketing.

Retail marketers are pivoting towards 1:1 personalized orchestration engines. These are not just about sharing advice but also listening to your consumers.

For instance, when a customer is shopping online your recommendation engine may be showing them similar products. However, customers seek advice more than recommendations. You can drive personalization by showing them how to pair the item they are looking at with others or how to style it for different occasions based on their lifestyle.

You could also offer advice in the form of answering frequently asked questions about the product. This can go beyond product specs to show how the product functions in different settings, how durable it can be, etc.

Thus, you can build personalization into the entire customer journey. By listening as much as recommending, retail marketers can ensure that customers control their own journeys.

Top 4 Retail Marketing Takeaways:

Here are four top takeaways from Bob’s talk on personalization in retail marketing.

  1. Consumers don’t mind that you have data on them. In fact, they preferred to be recognized and offered relevant offers. But, they want transparency and control over the data.
  2. Combine your knowledge of your customers with data science to gain insights.
  3. Become proactive in your communications, open yourself up to listening to your customers. Go from predicting customer behavior to anticipating it.
  4. Retail experiences need to be personalized in every step of the customer journey. In order to achieve this in a meaningful way, you need to combine technology and human instinct.

Catch a Recap of Making it Personal

Watch the full recap of Making it Personal, presented at WE Prosper Summit 2019.

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Black Friday Marketing Campaigns for Luxury Retail

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The holiday season is fast approaching. Now is the optimal time for luxury retailers to gear up for the busiest season of the year. Your Black Friday marketing campaigns need to be data-driven in order to ensure success. Before we analyze the holiday season and provide recommendations, let’s address a question that might be on your mind:

Do luxury brands do Black Friday?

The holiday shopping season, especially Black Friday, can be the biggest time of the year for retail. With this being the case, luxury retail stands to benefit from the general willingness to spend.

Of course, there is the question of whether offering luxury goods on sale dilutes your brand. But, when it comes to your Black Friday marketing campaigns, there are ways for you to participate without affecting your overall brand image. Many high-fashion labels such as Prada and Fendi participate in Black Friday, as Bloomberg reports. 

Now, let’s explore the ways brands approach Black Friday internet marketing or digital marketing strategy.

Your Black Friday Marketing Campaigns

There are several ways for luxury retailers to get involved during the holiday shopping season. In general, all retail categories see an uptick during this time of year, including luxury.

Even luxury buyers enjoy scoring a great deal or an exclusive find. Thus, as a luxury retailer, you can create excitement around Black Friday without tarnishing your brand.

Your digital campaigns can be focused on value-adds that are specific to the season. These don’t necessarily mean offering unreasonable discounts on large volumes of products. A well-timed marketing campaign can promote your holiday idea in a way that is reflective of your brand. The promotion can generate both buzz around the season and the exclusivity of a certain deal.

How best can you do this? Let’s consider a few examples from past holiday seasons.

Black Friday Marketing Examples for Luxury Retail

Many luxury retailers have taken advantage of Black Friday in the past. For instance, although Louis Vuitton’s flagship store did not feature any discounts, according to Business of Fashion, they did open their store earlier to encourage Black Friday shoppers to come in.

Another example is Bergdorf Goodman’s holiday marketing strategy. They offered Saint Laurent handbags at 40% off. Even though this is a significant discount, they limited it by offering it on a specific item. Other labels and products were sold at regular prices.

Masstige brands such as Michael Kors or Ralph Lauren have offered deep discounts of up to 75% off during this season. They can bounce back to regular prices after Black Friday without altering the value of their products or their overall brand.

Black Friday Marketing Ideas: In-Store and Online

Let’s consider some Black Friday marketing campaign ideas that you can implement and promote:

1. Deep discounts on limited pieces:

Whether in-store or online, you can manage the number or types of discounts you have. For instance, you can offer 75% off on fur coats, but limit the number of coats. Let’s say you offer 10 pieces per retail store and 50 online. Similarly, you can offer a discount on very specific items and maintain regular prices for all other products.

2. Longer store hours:

Black Friday excitement can also be created by opening your store early or keeping it open for longer hours. By doing this, you can attract shoppers who are out early or late without needing to offer major discounts.

3. Limited edition Black Friday collectibles:

Your Black Friday offer could be on a new collection or limited edition line of luxury products at full price. You can offer an early and exclusive preview of next season’s goods to Black Friday shoppers. This offers you another alternative to make the most of the season.

4. Discounted shopping during a short window: 

When you do offer a traditional Black Friday sale, you can do so in a short window of time. For instance, if your sale prices are only available 6 am to 9 am, early birds will get in to enjoy the deals.  This also motivates and gives other shoppers incentive to shop earlier. The buzz from your campaign will last the rest of the day even when you roll back to full price.

5. Curate and exclusive experience:

Other alternatives revolve around creating a memorable customer experience for in-store shoppers. For instance, you can offer free personal shopper service on this day. Similarly, you could serve champagne in-store, offer double reward points, or free personalization on products.

This could also be held as an exclusive, invite-only experience for your most loyal customers.

6. Discounts in partner retail stores: 

As a luxury brand, you may not want to reduce prices in your flagship store or your own retail store. However, you can choose to offer discounts through your partner retailers or similar channels. For instance, luxury department stores or even off-retail stores can offer selective discounts on your products.

How to Use Data to Implement Your Marketing Campaigns

As we noted earlier, data-driven Black Friday campaigns tend to see more success. Learn more about wealth data implementation for Black Friday success by reading our article.

Essentially, when you conduct wealth screening on your contacts, you learn more about them. Analyzing your screening data can tell you what makes your audience unique. You can then use these insights to deliver personalized and effective campaigns.

Personalize Your Black Friday Marketing Campaigns

Use wealth screening and analytics to personalize your campaigns.

Learn More About Millionaire Buyers

Download a free copy of our 2019 U.S Millionaire Report today.

Maximize Revenue with a Complete Picture of your Customers’ Capacity to Spend

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Luxury brands face tough competition to capture and retain high net worth customers. They are now facing competition from non-luxury brands, who have been gaining traction, and wallet share, among HNW individuals. In 2016, Nike was ranked the most valuable apparel brand in the world, overtaking Louis Vuitton, and Kia, a non-luxury vehicle, came out on top in J.D. Power’s quality car survey.

Luxury brand or not, the competition is fierce to both attract and keep the attention of HNW customers. Their business can make a huge impact on your business. A Bain & Company study found that a 5% increase in customer retention can increase a company’s profitability by 7% and that the average amount spent by a repeat customer was two-thirds more than a new customer.

Because of the current landscape, it is imperative for brands, both luxury and non-luxury, to prioritize and segment their customer base and identify who they should focus their time and budget on in their marketing campaigns. One approach is to use transactional history, however, spend history does not equate to spend ability, so you need to be more granular.

Previous spending is a key component, but it should not be the only data point you’re using. Instead, focus your efforts on identifying the low spend, high net worth customers among your current database. Think about it – a customer may have purchased something for $100 when they actually have the capacity to buy something that’s $1,000. Use this information to personalize your sales and marketing outreach and present higher cost items.

Remember, not all existing customers have the capacity or ability to spend more with you. Identifying those that do are critical to enhancing revenue and driving a higher customer lifetime value.

Contact us for more information on analyzing your customer base and identifying those with the capacity and net worth to spend more.

CEO Mark Logan on Marketing to Gen X, Y, & Z

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On Wednesday, May 3, our CEO, Mark Logan, joined senior executives and decision makers at the 2nd annual Luxury Roundtable hosted in New York City by Luxury Daily. The goal of the roundtable was to discuss a serious issue facing luxury marketers: how to drive and sustain demand from Generations X, Y and Z whose shopping habits are strikingly different from the silent generation and baby boomers.

Mark joined a panel of experts to discuss “Ecommerce and Mobile: Symbol of the New Path to Purchase.” The focus of their session was how to deploy online and mobile channels to generate new business while retaining existing customers for generations who live on their smartphones. Mark shared how WealthEngine can provide useful insights on customer segmentation and the critical importance of personalization.

WealthEngine has put together a useful resource to help luxury marketers use predictive analytics and modeling. You can download it here.

For more on the roundtable, including slides and other panel summaries, click here.

Marketing to the affluent millennial consumer, everything you need to know

marketing to the affluent

Marketing to the affluent millennial consumer is going to be a key skill for luxury companies. There is constant chatter about millennials and whether they work hard or are hardly working. It is time to put this debate aside and pay attention.

Why are affluent millennials important to luxury companies?

Millennials are going to have a big impact on our economy.  This means that you cannot discount them and their growing wealth. The number of wealthy millennials in the United States is increasing. Millennials make up nearly a quarter of affluent U.S. households. Where does their wealth come from?

Their wealth, in fact, can be attributed to inheritance and early professional success in the technology industry.

Affluent millennials are a key consumer segment. Moreover, you might find yourself competing against other luxury brands for their attention. Marketing to affluent millennials will need a new outlook. If you haven’t already, it’s time to start shifting your thinking and strategy. Luxury consumers are more valuable when they are younger as they spend 1.5 to 2 times more than older affluents. Their expenditure applies to both luxury goods and services.

How can you successfully market to the affluent millennial consumer?

To truly engage the affluent millennial, you need to learn everything you can about them. This will help you personalize not only your messaging but also the whole customer experience. Here are some ways you can better understand and market to affluent millennials:

WealthEngine’s Step by Step guide: Marketing to the Affluent Millennial Consumer

Step 1

Start by understanding the impact of millennials on your business. Affluent millennials show greater brand loyalty than other generations. Therefore, luxury retailers should strive to understand this group and their spending habits. You should have a good idea of the economic benefit this group can bring to your specific brand.

WealthEngine’s client, an iconic US-based Luxury brand, realized an ROI of 340% in just 60 days of running a direct mail campaign. The campaign helped them gain nearly 3x more revenue per customer. They were able to accomplish this by targeting a list of 22,000 households with $5M or above in net worth, and specific demographic and lifestyle attributes. Thus, their understanding of their customer led to a marked increase in revenue.

Step 2

Next, you should build on the information you already have by appending wealth, income, lifestyle and affinity information. What interests or attributes do they have in common? Do a majority of them live in one area? This information is key because it’s specific to your brand and your millennial buyers.

WE Screen can add these key attributes to your existing data. Through screening, you can develop a holistic picture of your millennial customers. Marketing to the affluent millennial customer begins with understanding their capacity to spend and their interests.

Step 3

Once you know the characteristics of your top millennial buyers it’s time to find more just like them. WE Analyze creates a look-alike model. This means you can take your screening data and run it through analyze. The solution then finds common traits and patterns among your top customers in this segment. These patterns can help you find more prospects just like them.

For example, you can find out that your customers are all between the ages of 28 and 32. Further, you can find that they are all concentrated in the Bay Area. This helps you find more prospects like them. Your marketing can already be directed to the older, affluent millennial in the Bay Area. Doing this would help you find prospects you might have previously overlooked. Secondly, it prevents you from spending on younger millennials who may not relate as strongly to your brand.

Step 4

Marketing to affluent millennials cannot be a one size fits all solution. Therefore, you shouldn’t market to all affluent millennials with a single message. This will not resonate with some of them. Be smart and focus on the ones that most resemble your customers. Then, you should personalize your message to this group.

Step 5

Finally, don’t disregard the power of taking immediate action.  Consumers are 22% more likely to consider a brand as a result of real-time marketing. Your customers and prospects engage with your website and other channels on a daily basis. Identify affluent millennials are as they interact with your channels. This will help you personalize their experience on the fly.

For instance, let’s say your website sells luxury shoes ranging from $200- $2000. Knowing your customer’s spending capacity and interests will allow you to customize their experience. If you know that affluent millennial user 1 prefers high-heels in the $600 range, the website can start showing products in that range. If user 2 prefers sneakers in the $300 range, then the experience can reflect those preferences right when they open your website.

What Else You Need to Know

There is an added benefit to marketing to the affluent millennial consumer. Engaging with and cultivating them now can help you build long-term brand loyalty and lifetime customers.

Increase your understanding of the affluent millennial consumer, contact us to learn more.

Additional Articles:

Know Your Millionaire: Single Millennials

Redefining “Luxury Brand” for Your Luxury Marketing Strategy

How Can Luxury Marketers Use Social Currency to Drive Business Results?

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Do you know your customers? No, do you really know your customers? As a luxury provider, you may not know them as well as they know you. You’re used to delivering a personal experience to customers you’ve won over, but the only way to attract new customers is to really understand what makes them tick. And that means creating “social currency” with them.

Simply said, social currency is the stuff we talk about with our friends, colleagues, and family. In a marketing context, it concerns the extent to which we share a brand or information about a brand with others in our everyday social lives at work, home, or in virtual social networks.

One of the biggest challenges facing luxury marketers today is how to take social media beyond just another communications channel, and use it to drive bottom line results. Social currency provides the answer.  By creating social currency — that person-to-person buzz — marketers can support their objectives of:

  • Increasing brand awareness
  • Maintaining brand relevance
  • Improving customer experiences with their brand

Marketers can successfully drive the conversation and create more social currency by learning more about their customers and speaking directly to them. With big data, data analytics and strategic social media initiatives, marketers can now know more about their customers than ever before, and personalize communications to an extent never before possible. From purchase behavior to demographics to life style affinities, marketers can not only personalize the dialogue, they can also deliver the message in the channel that will get the best response.

As a luxury marketing professional, it is extremely important to understand the mindset of wealthy consumers, and that not all wealthy consumers are alike.  You must take into consideration both the demographic and psychographic profile of your clients. Most importantly, you must go beyond judgment into a deeper understanding of what makes your target audience tick.

The better you understand about what matters most to your customers and the better you can speak directly to those needs, the more social currency you will create. Social currency will deliver more brand awareness, brand relevance, and better customer experiences, which will drive bottom line business results and referrals.

If you’d like to learn more about using big data and analytics to get into the mind of your customers, check out our free ebook: The Luxury Marketer’s Guide to Engaging and Winning HNW Customers. This simple guide will show you how to understand your customers beyond their purchasing history and walks through the strategies that innovative luxury brands are using today to increase marketing and campaign effectiveness.

Drive 2016 Holiday Strategies with Big Data

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Fall and holiday planning is in full swing and customer-centric brands have an opportunity to drastically improve the consumer experience – with wealth data. Wealth data has become the “must have” data point for brands and retailers who know how to maximize their consumer marketing and create the most relevant and profitable experience for each segment of their database.

The emergence of new structures for rich data allows for the unprecedented ability for brand marketers to truly deliver highly personalized, one-to-one e-commerce experiences. As we know, today’s consumers are pros at ignoring mass media and listening only to what they want to hear. But, with access to and with the effective use of Big Data, brands can enhance consumer experiences with contextual relevance that allows for engagement at precise moments when customers are most persuadable. Applying contextual relevance to digital customer experiences is often overlooked by marketers, yet it can make all the difference in delivering value propositions that get to the heart of a customer’s buying criteria.

In this competitive landscape, it doesn’t matter if marketers are focusing on direct mail, email, mobile, or digital strategies. The focus is the same. It is critical for marketers to pinpoint their prospects in unique and compelling ways. Utilizing wealth, demographic and lifestyle parameters are an effective way to leverage the attributes of your best customers to generate a targeting strategy and a voice that will resonate with that audience.

For more information on prioritizing your buyers and prospects using wealth data check out our webinar Improve Consumer Experiences and Drive Revenue in the 2016 Holiday Season Using Wealth Data.

Retailers Use Data-Driven Marketing for Holiday Promotions

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Every year consumers lament that they don’t even get through Halloween before they start getting inundated with holiday marketing pitches. This is compounded with the complaints companies are starting to receive around their remarketing. If a consumer has just made a purchase from a retailer, the last thing they want is a barrage of offers to buy the very same handbag they just purchased. Right?

So what can you do this year to improve your results and empower consumers to do more of their holiday shopping with you?

Here are a few tactics to incorporate into your overall marketing strategy for the holidays.

  • Screen your current customers based on wealth to determine the appropriate targeted promotion.
    • Base your discount offer on their net worth. For example, you might offer $10 off a $100 purchase to one segment and $50 off a $500 purchase to another depending on their income and assets.
    • Look at price points of products you would like to promote and feature those that align with the household income and spending capacity of your customers, specifically.
  • Develop a model of last year’s best customers now so you can segment and personalize your messaging when the time is right.
    • Take the data you already have around your customers and their buying behavior and then let WealthEngine help develop a model of your ideal customer using our wealth scores and analytics. By modeling your best customers, you can then create messaging to increase loyalty for increased business this year and capture market share from your competitors.
  • Surprise and delight new potential customers in a way that entices them to subscribe to your list in time for holiday offers.
  • Use exclusive events to capture the attention of your VIP customers and create a unique shopping experience.
    • Develop a geo-targeted list and further narrow it down based on wealth and lifestyle factors to bring new customers into your store. Consider hosting an event after-hours for this exclusive group, or provide VIP access in advance of your store opening and provide special offers and experiences for those in attendance. During the event, inspire sharing on social channels with lots of photo opportunities.
  • There are always people who wait to shop at the last minute, make sure your offer is the one that brings them joy vs stress.
    • Bucket your list into two segments: those who have already shopped with you during the holiday season and those who have not. For those who have purchased, be sure to suppress any offers they have already responded to and instead, build an offer based on their wealth and complementary products and services. For those who have yet to make a holiday purchase, be sure your offer is one they can’t refuse.

This year, smart marketers will take a more respectful approach and reap the rewards. With all the marketing noise between now and the holidays, the retailers who take the time to understand not only buying behavior, but also holiday budgets and capacity to spend, will win.

Want to find out more about how WE can help you with your holiday marketing this year?

Request a demo now.

The New Audience of One

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In a recent TravelWeekly article, Emmanuel Perrin, CEO of Cartier North America, was the first to say it: “Client care is the final frontier…You can’t go wrong investing in client experience… What is good for the client is good for the retailer and is good for us.” Today’s luxury buyer might not be so easily seduced, at least not by brands. Jim Taylor, vice chairman of the research firm YouGov, presented the findings of the Survey of Affluence and Wealth, conducted in partnership with Time Inc. And those findings were mixed at best for the audience of luxury CEOs and marketing executives from the fashion, automotive, jewelry, beverage, retailing and travel industries.

Continue reading “The New Audience of One”

The Rich & Single: America’s Wealthiest Bachelors & Bachelorettes

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In honor of Valentine’s Day, we thought it would be fun to look at America’s richest singles.  Did you know that majority of these bachelor and bachelorettes live in New York, California and Texas?  Or that the most charitable of these singles live in Florida, Connecticut and California?  Click the infographic below to learn more about the wealthiest single men and women.

WealthEngine goes beyond wealth to uncover key characteristics about individuals in the US and UK. Combining wealth, demographics, lifestyle interests, and social behavior, marketers and fundraisers use precision marketing to  find, engage, and influence in a way that matters.  

Continue reading “The Rich & Single: America’s Wealthiest Bachelors & Bachelorettes”