Shopify Ecosystem

First-Party Data-Driven Personalization — The Golden Key To Repeat Purchase

first-party-data-driven-personalization-—-the-golden-key-to-repeat-purchase

With data privacy and permissions about to impact digital marketing, the importance of first-party data just increased exponentially. Some brands fear that consumers won’t share their data as willingly if they can easily opt-out, but the reality is that consumers will trade their data for a top-notch personalized customer experience.

Recently, retail personalization experts sat down to discuss the current state of first-party data and how it fuels and strengthens the ongoing customer experience. Guests include:

  • Tabitha Cassidy (Moderator), Content Manager & Research Analyst at Digital Commerce 360
  • Fred Gerantabee, Chief Executive Officer at FGX International
  • Ian Rosen, Executive Vice President Digital & Strategy at Harry Rosen
  • Dhiraj Rustagi, Vice President E-Commerce & Marketing at NorthShore Care Supply
  • Alex Timlin, Senior Vice President, Retail, at Emarsys

Let’s hit the insights highlights, but you can watch the entire discussion at any time right here.

Using First-Party Data to Enhance the Shopping Experience

The great gold rush of data is heating up, and retailers are discovering the best ways to use that data to deliver the shopping and purchasing experience customers want. Many brands are developing greater ways to ingest data at every appropriate touchpoint, as long as it doesn’t create friction in the experience.

Canadian men’s fashion retailer Harry Rosen has leveraged quizzes to gather more information about what customers prefer in outdoor wear like coats. The quiz questions help initially personalize the product, but they also serve as a place to collect better personalization data. Customers approve of this as long as they know they’re getting an excellent customer experience in return. As EVP of Digital & Strategy, Ian Rosen says, “Clients are more likely to share information if they see a value in the exchange.”

At NorthShore Care Supply, Dhiraj Rustagi, VP of E-Commerce & Marketing, focuses on two types of data:

  • Explicit data, like the product the customer purchases
  • Implicit data, typically behavioral data that allows you to analyze and understand where the customer is on the purchase journey

By tracking customers and prospects exploring product pages, Rustagi can know where they are in the journey and then use these insights to customize emails and deliver relevant content that offers education or satisfies curiosity.

For Alex Timlin, SVP Retail at Emarsys, the last 12 months have exposed a huge challenge around stock and inventory for retailers, something that only data management and analysis can alleviate. “Products you expect to sell well didn’t, and products you didn’t think would sell sold out, like a 30% decrease in loungewear online, and not a huge increase in formal wear.”

Timlin points out that first-party data done right should show you the clickstream of what people are looking at, what they’re purchasing, and what they are trying to do beyond that. Some retailers were able to pivot and react to unusual weather and government lockdowns to avoid surprising fluctuations in supply chains, but only because they had their customer data working for them.

Personalization Power

As Dhiraj Rustagi puts it simply, “Personalization is a very broad term,” but he gives us a great, practical definition: “You are tailoring an experience or communication either to a segment or to an individual, in the moment or offline.” He goes on to divide personalization into two parts: strategy and delivery.

Strategy is generally customer segmentation (the WHO you’re focusing on) and customer journey mapping (the CONTEXT of what you do with those segments). Broad segments are fine to start with, but eventually, you want to drill down and build micro segments for this audience.

Delivery consists of HOW and WHAT you can deliver. Maybe it’s product or content recommendations, personalized offers, or loyalty programs. Here’s where your data plays a huge role. Maybe initially you’re feeding website data to your system, or maybe you’re using six channels to gather customer data, or maybe you’ve got a full-fledged omnichannel operation where you’re using rules-based or, better, AI-driven personalization.

The HOW will tell you what you can do, but the strategy, the segmentation, and customer journey map establishes the framework. Businesses are expecting ROI (with the right data and analytics in place) for their investments, and personalization helps paint an accurate picture.

But Rustagi’s salient tip: “Customers are looking to do their tasks in the smallest number of steps.”

Fred Gerantabee, Chief Executive Officer at FGX International, acknowledges the importance of historical data, but he also recognizes that excellent personalization needs to evolve into aspirational messaging, to go beyond the product purchase of the moment and establish that engaging relationships with customers. You have to view customers more like a gathering of friends. You should already know what they’re interested in. Gerantabee equates bad personalization to sitting down with your friends and asking them, “So what’s going on with you?” Brands need to do a lot better than that.

“Personalization is the WHAT you do, not the WHY you do it,” Alex Timlin stresses. Value is the WHY, the experience you give customers in exchange for their data. “It’s about context. How do I take what I already know about this customers’ previous interaction and use that to make sure I’m adding value and reducing friction, making it a little bit easier for the customer to make sure they find that product or service that they’re looking for?”

Paths to Personalization Success

For Dhiraj Rustagi, the ultimate idea to keep in mind is to respect what his company is committing to with their customers. If NorthShore Care Supply asks for data from customers in a campaign and they promise to send offers or newsletters in return, they have to keep that promise in the smoothest, most friction-free way possible.

While it’s perfectly okay to send some generic messages, Rustagi relies on another tool: Content taxonomy. By creating hierarchical tiers for your content, you give visitors helpful site navigation and search capabilities, and you can display related content or products that you can then link to your customer segments. By correctly demonstrating the value, personalization is a tool retailers can leverage to build trust and loyalty.

At FGX International, Fred Gerantabee uses personas to target segments, but another way he looks at performance is through themes. Are you making products customers want? And might those products be successful across different groups of customers? “Sometimes, I’ve seen themes trend across segments,” Gerantabee says, and in these cases, he may include cross-segmentation to uncover developing trends.

For Ian Rosen, it’s been about moving away from mass marketing and developing personas. His company, Harry Rosen, has some message components that can be personalized, but limited internal resources make this difficult to execute. Many brands don’t have the ability to crank out five emails for five personas multiple times a day or a week.

Rosen is looking for scalability and quick wins they can easily implement like Browse Abandon, Back-in-Stock, Abandoned Cart, and Hey You Bought This Recently, Let Me Show You Some Complementary Products.

To better identify trends closer to real time, Rosen has been working on advanced attribution of products. “We don’t notice the natural alignment between certain products, like buying products across themes or categories that are great for outdoor hiking – the only commonality between these products is they all are made of a certain material.” The idea here is that advanced attribution should help Harry Rosen stay more relevant to the individual customer’s lifestyle.

However, Alex Timlin has a personalization warning: “There is a point of diminishing returns. There’s a big difference between targeting and personalization. You can be very targeted at the top of the funnel, but if you don’t know anything about this person, it’s very difficult to be personalized.”

Instead, Timlin reminds us that you need relevance above all else in your personalization strategies.

“It’s getting that balance between getting the right reach size of audience and getting the right return or performance from those audiences,” Timlin says. “It’s about how big is the team. How big is your content repository? And at what point do I not just chase people around the internet with product marketing ads, but actually start opening up new experiences with really well-crafted creative and artwork that tells a story?”

Top Marketing Lessons from 2020

“Everyone’s probably saying that what I learned in previous years was NOT useful for the first three months of last year,” Alex Timlin says, summarizing retail’s struggles with shifting consumer habits as the pandemic unfolded.

But as with Emarsys clients, retailers can look for patterns and focus on products with repeatable lifecycles, only adding cross-sell or up-sell where appropriate — and only recommending products that are actually LIKE the products customers looked at.

What does Timlin think will help retailers most? A little feedback.

“One of the more interesting insights came from Emarsys and our colleagues at the SAP Service Cloud,” he explains. “[We were] looking at the relationship between people who complain and people who purchase. If a customer complains and you deal with it – even if it’s an autoresponder – they are statistically more likely to buy from you again than somebody who has left you no feedback at all.”

With more limited resources, Harry Rosen has concentrated on its website, essentially improving their catalog as a way to keep customers engaged. “Within the context of somebody shopping, we’re making pretty deliberate decisions with how far they are away on the website,” Ian Rosen says. “Are we willing to take them? And when they’re on a product display page, I don’t want them leaving product display pages. I don’t want to kick them back to results sets. Or if we do want to cross-sell and they’re looking at a jacket, make that a kind of popup experience rather than a new page loading experience.”

To further improve their frictionless browsing experience, Harry Rosen is deploying shoppable imagery of all their product display page images, a feature that will help keep customers engaged with products on the website.

Finally, as digital has grown, a lot of Harry Rosen’s vendors have gone Direct-to-Consumer (DTC). It’s easier than ever to find the same products sold in multiple places. To mitigate this, the retailer is turning to loyalty, as Ian Rosen describes, “We have a loyalty recognition program that we really are investing in to articulate why it pays to consolidate your spend with us.”

The biggest lesson for Dhiraj Rustagi was that customer retention is becoming more and more important. All the e-commerce growth over the last year means it now takes A LOT of effort, resources, and budget to acquire new customers. He keeps a close eye on two important metrics, Customer Retention Rate (CRR) and Customer Lifetime Value (CLTV) — “the mother of all data” — but his most important tip: “You have to listen to the customer.”

Fred Gerantabee also points to CLTV and the long view of the customer relationship as the best way to engage your audience, whether it’s remarketing emails, abandoned cart emails, or relevant product recommendations and content.

“The biggest lesson,” Timlin adds, “Is that customers are willing to tell you what they’re looking to do and willing to give you information explicitly and implicitly as long as they get value in return.”

Final Thoughts

Looking forward to upcoming challenges in personalization using first-party data, the panel is optimistic about developing data permissions, technological innovations, reducing clicks and friction, and making the case for the value exchange each brand offers customers. But there will be challenges.

With the value exchange foremost in mind, Fred Gerantabee wants to try to use data as a service and make it part of the value exchange. “People no longer sell their souls for a coupon,” he says. The new incentive should be that personalized customer experience your brand offers.

Ian Rosen is interested in customer identification, really wanting to work on the data question: “Who Are You?” He’s looking to build unified profiles out of all these bits of data, combining important channels for the retailer like Facebook, the website, and the mobile app.

Also monitoring identity management solutions, Dhiraj Rustagi feels good about the progress his brand has made in data management: “Working on a CDP, all the consolidation helped us to establish a single view of the customer across different channels.”Concerning data, Alex Timlin says, “I think the biggest challenge and the biggest opportunity is how do you get information from a customer in a compliant and consent-driven way that a customer enjoys?” But more importantly how are you going to use that data to compete on customer experience? “How do you get more people to buy again?” Timlin asks. “You can compete on price and experience, and someone’s always going to be cheaper.”

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Special thanks to our friends at Emarsys for their insights on this topic.
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