There was a time, not too long ago, when brands — and customers — viewed e-commerce as a transaction-centric activity. It’s safe to say, those days are gone.
Today, shoppers want and need to feel like they have a relationship with the brands they love. Good quality, wide assortment, easy check-out, and no-hassle returns are now table-stakes. What truly sets successful, thriving direct-to-consumer (DTC) businesses apart from the pack is the degree to which they know and understand their customers. Personalization is the key to that relationship.
In its simplest form, personalization is about using information brands have gathered about their customers to serve up content and offerings that are tailored to them. Brands can deploy personalization across different metrics (browsing history, demographics, location), at various points (website, an ad or email campaign), and with different methods (human curation, artificial intelligence). No matter how a brand chooses to personalize, the goal is the same: Create a customer experience that feels bespoke and unique.
Personalization can also take different forms depending on the category and the stage that a brand is in with a customer, explains Alessandro Desantis, managing partner at e-commerce consulting firm Nebulab. In the product discovery phase, for instance, brands can use what they know about customers to offer products that match their taste and purchase history. Or they may pre-select the correct product size based on a customer’s measurements.
Leveraging the right data
The best personalization programs are omnichannel and go beyond a brand’s DTC storefront. This includes email marketing, push notifications, customer service, and any other touchpoint a brand is using to stay top-of-mind with customers. “Basically, anything that can make a customer feel like the brand knows them and gets them is fair game,” Desantis says.
It’s important to identify and leverage the right data when creating personalized touchpoints. Getting clear on historical, demographic, and contextual data will enable a brand to build that stronger bond they’re seeking with customers. A good starting point is historical data. Simply put, these are the actions a customer has taken in the past, such as their purchase history or average order value (AOV).
Demographic information is the foundation of a brand’s relationship with a customer. Geography, gender, and age are among this kind of data. Contextual data is more nuanced and changes readily. In other words, these are the actions customers are taking now — what products they’ve added to their cart, how long their shopping session is, and whether they complete the transaction.
“A well-designed personalization program uses all this kind of data to generate a rich, constantly evolving profile of the customer,” Desantis says.
So after collecting, examining, and leveraging all this personalization data, what’s the payoff for a DTC brand? For starters, personalization can drive engagement, AOV, repeat purchases, and customer loyalty — everything it takes to get and keep shoppers.
When coupled with a thoughtful strategy for collecting zero-party data — data which a customer intentionally and proactively shares — a brand can gain a much deeper and more effective understanding of their customers. Fortified with this knowledge, they can improve their overall performance in their category by offering more tailored and relevant products, along with sharper messaging and marketing.
Of course, quantifying a personalization initiative can vary based on the key performance indicator being tracked and the campaign being rolled out. There are instances when a brand can directly tie incremental revenue to a personalization program, such as when a shopper accepts an up-sell or cross-seller offer. Then, there are other cases when a direct effect may be harder to establish. In a case like this, A/B testing can be a good alternative.
For DTC brands looking to deploy personalization for the first time, or those wanting to amplify their efforts, there are a few ways to get started.
To begin, brands should thoroughly understand and map their customer touchpoints to identify the potential “surface area” for their personalization program. Again, anything that makes the customer feel as if the brand knows them is part of that surface area. Once that’s understood, it makes sense to address the most pressing priority for the business. It may be improving customer acquisition efforts or the repeat purchase rate. Sometimes, the issue that stands between a one-time customer and a loyal customer is their experience with returns and refunds. Whatever it is, a brand should identify the area where they’re looking for a change.
Armed with this knowledge, a brand can figure out what kind of data it needs (zero-party or first-party, for instance) and how best to collect it. For example, when gathering zero-party data, it’s best to use so-called “micro-collecting”—gathering data in small amounts as often and unobtrusively as possible.
DTC brands operate in a crowded field where there’s a constant fight for consumers’ attention. Working with an e-commerce consulting firm such as Nebulab can help DTC brands create and deploy personalization initiatives that cut through all the noise so that customers feel seen and appreciated—and less likely to shop anywhere else.
