Data Lets Retailers Deliver Personalized Experiences To The "Segment Of One"

Kristin Howell

Rich data modeling and mining are driving retailers to embrace the “segment of one” and respond to shifting expectations to deliver what consumers want.

Consumers today shop differently than they did a generation ago. Connected users enter stores with their smartphones and tablets on and ready to provide product information, reviews, and price comparisons. This data offers retailers the ability to give consumers customized experiences and to deliver based on these experiences.

With shifting consumer expectations, these “segment of one” experiences in turn boost brand loyalty and broaden consumer relationships.

Shifting consumer expectations

For retailers, the power of data has created a dramatic change. Today’s savvy retailers are using data to connect with consumers everywhere. Whether in the store or after a sale, retailers are finding better ways to engage with the segment of one.

Meanwhile, consumers are providing a motherlode of data points about themselves. Companies today can collect valuable information about consumers’ gender, location, wealth, product preferences, shopping habits and patterns, and much more. Retailers then leverage this data to create new experiences for consumers and maintain deeper relationships with shoppers after a sale.

Getting personal

Consumers today want and expect to experience brands differently, so retailers are using technology to personalize their message to a segment of one. Consumers are more interested in outcomes from using products than in the products themselves. They care about the totality of the information, services, and advice retailers provide. They expect interactions to be personal, based on a company’s understanding of their needs. Consumers want a relationship.

For retailers, these expectations are everything. Consumers now have seemingly limitless choices and ample information, and costs are low enough to justify switching from one brand to another. Retailers that deliver the information and experience consumers want are best positioned for success.

Timing is everything

Marketing to the segment of one requires knowledge of individual tastes, preferences, and triggers. It also requires the right technology to measure, record, and send data.

When Big Data analytics programs can harness the data, retailers gain an edge. Retailers are leveraging data across channels, precise segmentation, and consumer insights. Retailers can provide the right message through the right channel at the right time. Brand loyalty grows as customers experience products, not just buy them.

Data in action

How are retailers using this data to personalize the shopping experience? There are many examples.

One cosmetics retailer gives consumers ID cards. When a customer shows the card in a store, a salesperson can call up a sales history and customize a conversation based on the consumer’s preferences. Compare that strategy to a scripted sales pitch.

Consider grocery stores that let consumers shop using a phone. The store can keep a record of previous purchases online and suggest shopping lists based on past behavior.

Shopper partnerships with other retailers allow the store to deliver coupons for items in a customer’s cart, and emailed reminders can encourage them to shop again based on the timing of previous trips.

Before the store

How do retailers approach a segment of one?

Personalized marketing uses purchase histories and predictive modeling. Outside the store, loyalty programs track consumer preferences, enabling retailers to deliver offers directly to customers’ devices. Ad campaigns move beyond price points and focus on consumer values.

In the store

At the store itself, the experience changes too. Mobile point-of-sale technologies let smartphones and tablets complete transactions. Retail space once used for large checkout stations can be re-purposed.

Smart screens offer promotions and advertisements at strategic locations. Touchscreens deliver information to consumers browsing or waiting for a salesperson. Smart screens also give consumers information about products they are interested in. Live data about inventory, time of day, and online trends drive promotions.

Shopping cart sensors allow automated carts or carriages to follow consumers at a safe distance. Bluetooth technology connected to apps deliver coupons based on cart contents.

Virtual reality mirrors let consumers see different versions of a product. Makeup applications can be applied virtually, for example, to see which tones work best.

Smart fitting rooms connect to store inventory to determine what’s in stock and suggest available items first. Consumers can “see” how a pair of shoes in the store matches a particular outfit.

New payment methods

Even the checkout experience is changing. Simple swipes have replaced PIN numbers and passwords. Iris scans replace IDs and driver’s licenses.

These technological, data-driven qualities create an experience for consumers that deepens brand loyalty, but they offer major benefits for retailers, too.

Retailer systems shifts

For retailers, the omnichannel era arrived some time ago. It is now going through a change involving data modeling. Data from online sales patterns inform in-store offers. Consumer behavior patterns drive automated and contextual pricing models.

Digital patterns “married into” inventory and financial models of the past. Predictive processes replace office functions. Pricing meets demand in real time. Connected warehouses and inventory systems let sales associates know about shipping schedules and availability.

Vendors with access to real-time data shift production schedules to align with consumer demand. Flexible supply networks let retailers offer “make-to-order” fulfillment options. Inventory spoilage drops.

Conclusion

Collecting consumer data gives retailers an incredible opportunity to offer shoppers customized experiences via new technologies. These segment of one experiences boost brand loyalty with consumers wanting experiences, not just products.

Learn more about digital transformation in retail.

Kristin Howell

About Kristin Howell

Kristin Howell is global vice president within the Retail Industry Business Unit at SAP. She specializes in the areas of business-to-consumer marketing, loyalty management, pricing, promotions, and predictive analytics. Howell has 20 years of technology and retail experience, including leadership roles across management consulting, solution design, product marketing and software development organizations.