Across retail, shoppers now demand a personalised experience. It’s more engaging for the consumer, and results in up to 40% more revenue for the retailer too. But the key question remains: how best to deliver it?
Personalisation has shifted from a low-level add-on where merely name and contact details are remembered, to a world of hyper-personalisation where previous shopping habits and individual preferences are recorded, meaning personalised recommendations can be made to match a shopper’s unique style.
While this was once deemed too invasive, the modern-day consumer now expects this. Younger generations in particular search out this method of hyper-personalised shopping, having fostered a much deeper understanding and appreciation of AI and other machine-driven learnings.
As a retailer – regardless of your size – this is something that should be embraced. And in fact, as an SME there are advantages that larger retailers can only dream of: closer customer relationships and the ability to deliver a personal touch that is difficult to replicate on a larger scale.
The secret is combining the strength of the SME with the power of personalisation to deliver a big impact for your business, without breaking the bank.
Understanding what the consumer wants (why hyper-personalisation matters)
As alluded to above, customer expectations have changed quite dramatically in the last 5-10 years. 73% of shoppers now expect companies to understand their unique needs, while 76% actually get frustrated if personalisation doesn’t happen.
This means retailers need to seriously consider who they are targeting and make sure this is factored in at every stage of the customer journey. While easier online – with the use of cookies and saved account information that can lead to tailored purchase recommendations – in-store experiences must try to offer this as well. To do this, retailers must often rely on purchase information to adjust the layout of their store, promoting more popular products in high traffic areas.
Ultimately this has an impact on customer loyalty, which has been proven to deliver greater revenue. A personalised email or personalised edit when shopping online can result in 6x higher transaction rates and mean an individual is far more likely to return time and time again as a repeat customer.
There is, however, a fine line to tread. While the demand for personalisation remains, customers don’t want to feel like they’re losing their privacy. This is where SMEs can excel in the matter, as they naturally have a more local appeal and a stronger emotional connection with consumers than larger, global retailers.
It becomes a case of navigating a personalisation paradox, protecting privacy whilst delivering a custom-made experience. 81% of consumers want personalised experiences, but an equal 81% believe that the risks associated with modern data collection outweigh the benefits, meaning they value their privacy more and if they feel this is being compromised by the personalisation, their overall experience will quickly shift to being negative.
How SMEs can deliver hyper-personalisation
As an SME in the retail sector, the easiest way to manage this is by leveraging first-party data. Whether via an app, newsletter sign-ups or in-store QR codes, first-party data can be gathered with consent and a profile built up over time of each consumer.
This data collection is the simplest place to start, with no need to invest in new technology and in most cases, something you already have access to which you might not be taking full advantage of.
The big advantage here over enterprise retailers is context – where they may simply see an anonymous customer ID, you might remember the customer who seeks out sustainable materials, or who restocks the same products at the same time every month. This unique insight creates an advantage that’s impossible for larger retailers to replicate.
From this point, segmentation is key. Segmented data can be utilised to deliver the first level of personalisation, based on purchasing behaviour or browsing history to ensure messaging is relevant and ads or communications are deemed useful, rather than spammy. This can range from anything from personalised emails to product recommendations, triggered either by shopping habits or behavioural triggers like a birthday.
As an SME, there are also things that can be done here to increase loyalty during in-store shopping experiences. If your POS system shows a customer recently bought a coffee machine, your staff should be able to see this and enquire if the customer wants any pods or beans, with the option of an additional monetary incentive to encourage purchase.
The next step is to harness loyalty apps and reward users of these schemes directly. Whether through personalised offers or discounts, or tailor-made adverts which make the consumer feel seen, without worrying about their privacy. There is also a demand for experience-based rewards, such as early access to products and events, which makes customers feel valued in other ways than just financial.
When harnessing loyalty while coupled with an investment in software that makes digesting customer information easier, a huge opportunity to advance in hyper-personalisation is created versus the bigger retailers, unlocking the ability to stand out to customers as a store that fits their demands.
Finally, additional technology at this point will also ensure you remain compliant and in line with privacy regulations like GDPR. A reliable EPOS system will have automations in place for these requirements and ensure data is used and stored correctly – this is important to remember as the world of personal data always needs to be navigated carefully.
Time to get personal
The data doesn’t lie: consumers want hyper-personalisation. And when it results in more revenue, why avoid it? The trick for SMEs is leaning into the angle of understanding your customers better, rather than trying to compete with bigger retailers. Recognise every touchpoint and reward your loyal shoppers for returning, without making them concerned for their privacy.
It starts with understanding data, develops with software that helps you segment, understand and use this data in a more efficient manner, and finishes with a stronger ROI and a more loyal, returning customer base.
If you want to find out more about unlocking the tools that can make this happen for your retail business, get in touch with our team to find out more.
