“Getting personal” in a general sense means a lot of things to a lot of people—and is frequently used in relation to a negative experience—as in “that conversation was getting too personal.” In business, there’s no such thing as too personal. In fact, studies show that the more personalized you can make the customer experience, the more profitable your company will be.
Reconsider your shipping strategy.
As retailers struggle to recoup rising order and fulfillment costs in addition to competitive pressure added by Amazon’s free shipping model, some are resorting to risky markups that will surely impact sales volume. Still others are experimenting with omni-channel shipping strategies and seeing profit margins rise in more organic ways. These omni-channel shipping strategies include:
- Buy online, pickup in-store (aka in-store pickup or click and collect);
- Buy in-store, ship to home;
- Same day/on-demand delivery.
How does an omni-channel shipping strategy reflect personalization efforts and feed into higher margins?
Giving customers the power to choose is the straightest shot to increased customer satisfaction levels. In an interview with Retail TouchPoints discussing their ship-from-store strategy, Kent Zimmerman, VP of E-Commerce for Shoe Carnival agrees. “We believe our customer satisfaction metrics are going up because we’re providing more product to the customer, which is what they’re looking for.” Ship-from-store enables companies to turn individual stores into fulfillment centers, linking in-store inventory with nationwide fulfillment center selection. This means when a pair of shoes you want is one town over but the fulfillment center is 500 miles away, the closer location makes the ship and you get your shoes faster. And when locations with long winters sell out of snow boots, unsold inventory from short-season stores can be sold instead of languishing on store shelves and moved only after considerable markdown.
Retail entities including in-store pickup in their personalized shipping options have also experienced increased margins by cutting shipping costs and increasing traffic to their brick-and-mortar stores where customers are likely to buy more.
Recommend, Recommend, Recommend.
The more you know about your customer, their buying habits, their browsing habits whether they like relaxed fit or straight—the better positioned you are to increase sales by suggesting products your visitors are most likely to buy, when they are most likely to buy them. Analytics engines are giving retailers these profitable insights and giving them a leg up on their competitors.
The online recommendation engine is the automated, millennially-intelligent younger sibling to the upsell. This cross sell tool for shopping runs on big data and puts out benefits proportionate to its big data diet. In fact, the numbers show that 54% of retailers that use automated product recommendations increase their average order value year over year (source: Forrester Research). Beyond just being able to increase revenue in terms of the simple upsell, retailers are using this sophisticated machine to experiment with recommending higher margin items over others. And, the dynamic analytics information these engines are constantly pumping out gives retailers a finite sense of what is working and what is not so they can change their revenue strategy in real-time.
Offer Dynamic Pricing and Tailored Discounts
Another margin-increasing tactic afforded thanks to advances in analytics and retail personalization solutions is the ability to set prices and discounts on inventory according to segmentation rules and other behavioral triggers. Retailers can experiment with applying price points dynamically based on a visitor’s buying and browsing history, the weather—even current events that impact them personally. Say a natural disaster leaves residents without power. Goods like flashlights and propane could be offered at discounts to buyers within a certain area--increasing customer loyalty and building relationships that eventually will equate with revenue increase. Margin increases can also be gained by determining the discount threshold at which customers will buy (10%? 15%? 30%?) and customizing discounts to the individual customer instead of applying a single discount across the board. Finally, abandoned carts can trigger discounts to customers who once back, are apt to buy even more.
The more personal, the more profitable is the mantra of online retail marketing today. You might consider making it yours too.
If you’d like to find out how Strands can help you integrate more personalization practices and increase margins,