Where are retailers on their hyper-personalisation journeys?

All retailers are playing around with personalisation, but the rise of AI brings even more opportunities with the right strategy in place. We interview retailers including Osprey London, DFS and Dune to find out how they’re making progress.

Personalisation – or, more accurately, the absence of it – can be the influential factor in whether a customer makes a purchase with a retailer or not.

Indeed, there are multiple studies to support this statement. One of the most recent, the State of Customer Service and CX Study by keynote speaker and customer experience (CX) expert Shep Hyken, found 81% of customers prefer companies that offer a personalised experience, 70% say a personalised experience in which the employee knows who they are, including elements of their shopping history, is important.

It goes to justify why so many retailers are putting hyper-personalisation on the list of priorities, and in the age of more sophisticated AI there are plenty of opportunities for retailers to up their game in the personalisation stakes.

“Data is the foundation,” explains Qodea's technical director, Sumit Sharma, Europe's largest Google Premier-only transformation partner. “AI is the shiny thing but to get there you have to have good data.”

Retailers still have plenty of data work to do for AI to drive radical positive change in personalisation strategy and general customer service.

They must bring together browsing data from websites, customer purchase history, changes in spending habits, whether seasonality or events impact their purchase behaviour, and a whole lot more. And the tools to enable retailers to do that are available today.

Hyper-localisation

So, where are retailers on the journey? The truth is a sliding scale of capability.

Luxury bags and accessories retailer Osprey London’s recent digital investments have been made with the aim of better serving the customer and helping achieve more personalised customer experiences.

Lana Rush, head of marketing at Osprey London, tells us that the retailer’s new website launched on October 16. This involved a move away from Magento to Centro’s ecommerce platform, which was conducted to “improve conversion. We want people to stay on the site for longer and inspire them to come back for more.”

A migration to Ometria’s tech platform has enabled Osprey to geolocate where customers are and, subsequently, personalise offers that might drive them into local stores. As part of the ongoing digital transformation, the retailer has also implemented delivery platform Ingrid so that shoppers can nominate their preferred fulfilment partner.

“Usually, outside of London [consumers] will have a preferred choice and we want to give them that choice,” explains Rush, adding that Osprey now also has the capability to accept returns in store and place orders in store for delivery to a customer’s home in the acknowledgment that customers want multiple options.

The website itself allows for hyper-localisation, which for many brands is a key strand of broader customer personalisation strategy. With CMS platform Storyblok built into the new site, Osprey can “massively localise”, according to Rush.

There’s a different front-end experience for US and UK consumers visiting the site, but the new functionality helps offer a user experience in the appropriate language too.

“In Germany, if FAQs are in English people won’t shop,” Rush says, using one example of why hyper-localisation is important. “Being able to show different model images, campaign shots or videos, we can customise content and merchandising by area.”

Single baskets across channels

At furniture retailer DFS, UK retail director Louise Rix now looks after the website as well as stores to reflect modern shopping behaviour.

“Part of the reason for my role is we’ve really integrated our CX journey across both online and stores because our customers are in and out of different channels all the time,” says Rix, who adds that personalised service is a key ambition.

“We look after all our data in house and make sure we meet customer needs and make them feel special. We’re a big ticket purchase so the customer is on journey for longer and they also come back around once every seven years on average – it’s really important we personalise and look after that customer.”

Rix talks of continuously improving the data the retailer holds and making sure DFS is cleansing it “all the time” as well as “making sure we’re using it in the right way to really support that customer”.

The data is considered at all points of the customer interaction to personalise and keep shoppers happy, Rix notes, listing the average value a customer is looking to invest, their preferred method of payment, and previous products they have purchased as important pieces of information to consider during a customer engagement.

“Use of data is critical because if [a member of staff] talks to a customer about a large corner unit and they only have room for a two-seater or chair, you can be switched off from the brand pretty quickly,” Rix continues.

Likewise, always following the data is important post purchase because it can enable an appropriate cross-sell and help a retailer avoid “negative marketing”, the retail director adds.

“We use data to prevent us from harassing customers – there is nothing worse than if you have just bought from us and we’re sending you messages.”

Since Rix took her dual role across channels, DFS has started sending store visit follow-up emails, which contain products viewed in person and therefore create a shared online-in-store shopping basket.

“Should the customer decide to purchase online they can use the link – that’s a big change for DFS. It was always about driving people into the shop, but we’re trying to appeal to everybody.”

Rix says DFS customers want to interact further into their purchase journey than they did pre-pandemic. “The starting point in store for us is ‘have you seen anything online? Customers want to build a relationship but for the retailer to be further into the journey.”

The art of the possible

Influencer marketing and gen-AI are also playing a role in personalising the customer experience and helping bring greater commercial success.

Martin Wareing, head of IT at footwear and fashion retailer The Dune Group, says the business experienced a spike in sales in October after actress Katie Holmes was photographed carrying a Dune bag in the national press. Off the back of this, Wareing says targeted influencer marketing is set to play a role in the retailer’s expansion in the US and how it looks to reach shoppers.

Elsewhere, Qodea’s Sharma argues the rise of GenAI will support even greater personalisation, helping with content curation, product recommendations and customised communications.

“Imagine you can pick up pain points customers are talking about for free online and you already know their profile – you can be proactive about addressing them,” he says, laying out a vision for a more intelligent store of the future.

He also talks of “taking customers on the journey” and retailers keeping them well-informed about how their data is being used to improve service as well as a need for a system that enables the data to be removed if a customer makes that specific request.

^{*This is a joint article written by Retail Week. Published 6th November 2024}