As new generations express preferences and technology leaps forward, brands and retailers need to keep pace in order to stay fresh in consumers’ minds. Millennials and the generation behind them, often referred to as GenZ, have had the luxury of growing up in online worlds with a wealth of information at their disposal. Brands, in turn, also have a wealth of data about them, which can be used in responsible and helpful ways to make products more relevant.
Personalization is one arena where this process plays out. And retailers are getting smarter about how they customize both content and products alike. Orange Silicon Valley Senior Business Analyst David Martin specializes in this evolving space where customer expectations meet products and retailers. Looking ahead to Orange Fab’s GenZ workshop on Dec. 7, he sat down to discuss why personalization is so important, as well as how he sees the retail world shifting.
Orange Silicon Valley: What’s happening right now in tech that’s opening up opportunities for retailers through personalization? And can you tell me a little bit about what personalization encompasses?
David Martin: Today, consumers feel like they’re being broadcast to; brands and retailers are fighting for their attention, and so much of what they see appears to be spam. A flood of notifications vye for their attention, resulting in a negative backlash. In response, retailers and brands are tailoring content, which means providing personalization. That personalization has the potential to radically change how consumers shop and what young members of GenZ expect as they grow to become active shoppers in the coming decade.
The challenge these retailers face is “How do you stand out?” The answer is actually understanding what consumers want and tailoring content, whether that’s products to buy or content to read. The tailoring process can be informed by two types of information: short-term insights, which show intent, and long-term insights, which include demographics, behavior, and preferences over time.
First, you have got short-term insights where somebody comes to your site or they open the app, they search for something, and they have a specific intent. So in the short term they have signaled they’re interested in a specific product category — or at least they’re researching it. Then you know you can start to piece together their interests, based on how they’ve interacted with your site or app, how long they’ve spent, how many visits they have made, where they’ve scrolled, and how much detail they have consumed about a specific product.
Through that you can start to tease out their level of interest, but that doesn’t truly get at their intent. Intent is when I have a problem, like I’m going camping this weekend and I need a sleeping bag. The retailer or brand can use that information to get a very clear idea about what the consumer is going after, researching, and looking to buy; that means the retailer or brand can then prompt the consumer later in the day — or the next day — based on specific time patterns. Maybe it’s at 5:45 p.m. when they’re in the car on their way home from work. The retailer can prompt them with targeted information about the products that they already browsed, based on the preferences that they’ve already made. So if they want a blue sleeping bag, then every other potential sleeping bag that’s being shown should also be blue. And if the product is $100, then the other products should also be roughly in the same range, because they’ve already indicated a preference on pricing.
Recently, I signed up for a major retailer when I went online and bought a long sleeve shirt. Then, I started receiving their e-mails. At the end of the newsletter were similar products to what I had bought. But the top three quarters of the e-mail newsletter were about women’s products and events. It wasn’t focused – they were treating me as a part of an audience; not as an individual. I’m sure that if you asked the retailer they would say they personalized the content that they had checked that box. But the fact is that they were still sending me mass “targeted” emails.
So with personalization your goal is to help customers filter. And you’re narrowing down the options, which you want to do as efficiently as possible so customers can make a purchase decision.
OSV: Who is using personalization right now? And what is it doing to shape customer experiences?
DM: One example of a brand using personalization that you hear about is Rebecca Minkoff, where they have truly created an omnichannel experience. I think that term gets overused. But in this case they’ve tied the entire experience together. If you have used the Rebecca Minkoff app or website and they have your browsing history, then they start to get a better picture of who you are and what you’re interested in. Then, when you go into the store, there’s an interactive mirror in the front. You can tap and say, “This is who I am,” and work with an associate who will then see a list of recommendations based on your browsing and purchase history.
To take it one step further, they’ll take any clothes that you are interested in to the dressing room. You can try on those clothes; you might buy some of them; you might not buy others. And then you go pay and you leave the store. Later on, in the app they now have a complete history — not only of what you browsed online, but also what you tried on in the store. They’re getting a much bigger picture of you and what you’re interested in, and can then remind you that maybe there was one shirt that you were about to buy. The app can ping you and remind you couple hours later to say, “Oh, by the way this is still available, in case you’re interested.” They know exactly what size you tried on and what color it was. And you can order it online right now. That’s a true omnichannel experience that is personalized and tailored to the individual.
OSV: For younger consumers, such as those in the GenZ age group, what do you think these trends will do to shape their expectations?
DM: I think they’re going to expect retailers to treat them as individuals. GenZ may be sensitive to looking at a broadcast spam newsletter and immediately have a gut negative reaction to delete it and unsubscribe. If they unsubscribe, that means they’re not going to shop. This is why you’re starting to see the rise of brands that target millennials and younger generations, because they’re not wasting everyone’s time by treating customers like a single audience. They’re recognizing that people are individuals and they have individual tastes.
OSV: Is social media going to play a meaningful role in this picture?
DM: How and where young consumers use social media is also going to be important. Consumers look to social media for style tips and to see what’s in fashion, but I think increasingly what you’re going to see — as we did five years down the road — is we’re going to have a lot more data about consumer preferences. So on social media, the images that you’ll see for specific products are going to be tailored based on unique preferences. For instance, you’re not going to see an advertisement for a pink jacket when you prefer green. And if you prefer jackets that go a little bit below your waist, you’ll see images that reflect that. You’re going to primarily see products that are tailored based on your historical preferences, because it’s part of moving you down the funnel toward making a purchase. It’s helping you filter information so that your brain doesn’t have to work as hard; your brain doesn’t have to make the leap of figuring out what a product would look like in your preferred color.
OSV: Are there any other aspects of the retail experience where you see personalization having an impact? What else is worth watching?
DM: In-store, the retailer now has an opportunity to change the dynamic by offering a tailored experience for customers through the store’s expertise and because they have the opportunity to know more about shoppers as individual customers. My hope is that we’ll be able to encourage users to self identify in the store and offer customers more concrete value after they check in. That has the potential really to change dynamics and improve the overall shopping experience for everyone.