Getting personal – using data to tailor retail services

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4C Associates’ Andrew Davidson considers how added personalisation benefits both retailers and their customers.

Before I explore the vast array of advantages offered by personalised retail services, I would like to clarify two common misconceptions. The first is that gathering, analysing
and actioning data is expensive. I remain astounded by the amount of retailers not gathering insight through simple loyalty schemes, because they think it will be too complex or costly. Technology has made the process quicker, cheaper and more effective. The only cost businesses should be wary of is losing customers to a more data savvy competitor.

The second is that customers are not willing to share their information and do not want it to be used to influence future service offerings. This is simply untrue and many customers, particularly younger generations, expect businesses to remember who they are and what they like. On the other hand, a US survey by YouGov from March last year, found that just under half of respondents felt that the more data they shared with a company, the better the service they expected.

Cross-selling, trust and loyalty

A US based survey by Segment, a solution which helps companies analyse data about their customers, found a multitude of benefits linked to personalisation. In terms of cross-selling, 49% of respondents said they had bought products they had not planned to buy due to a recommendation. Only 5% of the unplanned purchases were returned. Amazon is a great example of a business that understands the power of recommendations and its “Customers who bought this item also bought…” feature helped increase revenues by 35% when it was introduced. In a world where suppliers are fighting harder to maximise their footprint with retailers this also represents a great opportunity to increase supplier investments, drive retail sales and increase basket size.

A tailored service also engenders trust and according to the survey, 40% of customers said they had bought a more expensive product due to personalised service. Most importantly, personalisation breeds loyalty and 44% of respondents said they would return to a business that offered a bespoke service.


Newer technology, for example Beacon devices, allow businesses to present customers in proximity to a shop, or even a store display, with even more targeted offers. These campaigns enable retailers to deliver highly tailored, bespoke messages to customers at the right time and the right place, helping to drive footfall thus hugely increasing the customer conversion rates. The highly targeted offers would reflect the consumers buying habits knowing at what price they had bought previously and in what volumes, therefore enabling the offer to be perfectly tailored to the customer, but also enable the retailer to maximise its profitability. A report from ABI research expects Beacon shipments to comfortably exceed 400 million units in 2020.

One size fits no one

Using customer data to personalise experiences, is key to building loyalty. Without leveraging this insight, retailers are at best making an educated guess regarding the intentions of their clients. This wastes the time and resources of both sides.

In the nineteenth century, Philadelphia retailer John Wanamaker, reportedly coined the phrase: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”  Businesses today have greater access to marketing tools that help them measure the effectiveness of their promotions, yet still there are many retailers out there that still rely on gut feel and personal judgement.

At 4C we have developed models that will pinpoint which deals drove the greatest volume increases at the most pro􀂦table price point and show them to those customers most likely to buy. Aside from the bene􀂦ts mentioned above, personalisation based on customer behaviour means businesses can focus their efforts on developing high value repeat customers and converting medium value customers into high value customers. Money and effort need no longer be wasted on low value, transitory customers with little or no prospect of longer term ROI.

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