NEW YORK, United States — Fashion retailers have been systematically collecting data about their customers for years, tapping demographic information, often gleaned through catalogue subscriptions, as well as whatever customers were willing to share with sales associates in stores. But, special programmes targeting select high spenders aside, for many retailers, this information was largely used to build generalised profiles of archetypical consumers, not individual profiles.
That’s changing. “In the past five years, it’s become easier to collect a vast amount of data at the lowest level,” explained Lori Mitchell-Keller, head of the global retail industry business unit at SAP, which provides the enterprise software that retailers use to help parse through this data. “The challenge for retailers is: how do they harness the power of that data to impact the shopping experience?”
Many fashion e-tailers, better able to monitor the behaviour of individual customers than ever before, are now harnessing this data to personalise the customer experience. But personalised recommendation widgets of the kind popularised by Amazon are just the beginning. Today, several fashion e-commerce sites are on their way to offering a customised store for each shopper.
Since its inception in 2000, fashion e-tailer Net-a-Porter has paid close attention to the data its customer-base is willing to share with the company, building research teams that analyse customer surveys — as well as behavioural data — to capture valuable feedback and customer insights. “[The team] realised early on that we had this very special woman who was prepared to divulge quite a lot of detail about herself,” said Lisa Bridgett, director of global sales and marketing at Net-a-Porter. “Along with on-site surveys, we also have a cohort of women who we survey on anything and everything, whether we want their opinion on a new line or are simply asking them what brands they’re loving.”
More recently, Net-a-Porter has begun using a combination of surveys and behavioural data to offer each customer an individualised experience. “In our email, for example, we’re able to market to you new products around designers that you’ve signed up for, bought and also products we think you might like,” said Bridgett. For instance, a shopper in Paris who has bought Lanvin might be interested in Givenchy handbags, while a Stella McCartney fan in Texas might be shown blouses from Equipment. “We can get more granular,” she added. Net-a-Porter is also using the data to deliver personalised home pages. For instance, customers summering in the Hamptons outside New York City might see a promotion for the company’s same-day Hamptons delivery service.
Retailers are also beginning to target their online advertising to individual consumers. “We are moving away from a traditional model of advertising to an audience within a sector vertical and, instead, are now able to more accurately target the audience on an individual level,” said David Middleton, a digital account manager at Vizeum, an agency that plans digital display advertising campaigns for brands like Ray Ban, 20th Century Fox and Burberry.” No two individuals have the same wants or needs. We use techniques such as landing page customisation, search re-marketing, dynamic display re-marketing and targeting in social platforms using real-time data insights. Typically, we see improved results with a more personalised approach.”
Personalisation is also coming to the in-store experience. Burberry’s ‘One to One’ iPad application allows in-store sales associates to build and maintain customer profiles complete with global transaction histories and visual wardrobes for each individual shopper. Targeted in-store promotions and deals are also on the rise. “There is an enormous opportunity to make unique offers and recommendations [a customer] hadn’t already considered while they’re conveniently in the store,” said Greg Petro, CEO of First Insight, a predictive analytics firm. “The purpose is to provide products to consumers in a way that they want.”
A slew of start-ups, like RetailNext, which recently raised $30 million and counts Bloomingdale’s, American Apparel and Club Monaco as clients, are aiming to bring the benefits of web-style analytics to physical stores. But some have doubts.
“I’m sceptical of the true benefits,” said Sucharita Mulpuru, an analyst at Forrester Research. “A lot of this data already existed in some format and it has existed for years. The best retailers know who their best customers are, how frequently they shop and what they buy.”
“There’s a lot of talk about [data], but I don’t know how much is actually being used,” she added. “There’s a lot of venture capital money being poured into this space, but that does that mean there’s value to be had? Not necessarily.”