Beyond Data: The future of personalisation

Data is the sector’s most valuable currency. Yet all too often retailers don’t take full advantage of the quantity and quality of customer data at their disposal.

“They’re collecting a lot of data, but what they don’t tend to do very often is take intelligent actions off the back of it. The whole point of personalisation is that you can capture the exact needs of that individual customer,” says Martin Shave, retail industry lead for Microsoft Business Applications.

Brands that use data to its full potential are able to piece together a single view of the customer and use it to make effective marketing decisions. HSO’s Hickmott says these retailers and brands have “got the ability to engage with their customers in a way that creates a sense of magic. If you don’t have that, you’re going to be outgunned over time.”

Many of our disruptors are raising the bar in their use of customer data to enable personalisation, which in turn drives customer loyalty. Bloom & Wild has put data at the very heart of its model, employing six data scientists among a 50-strong tech team to ensure the business has the right number of bouquets to sell in any one week, minimising waste.

“We figure out how many we’re going to sell based on traffic and marketing inputs, we track if we’re ahead or behind the cumulative curve of where we should be and recommend action based on that. If that message shows up saying ‘not available’ too often then we become less useful to our customers,” explains Gelbard.

Pasta Evangelists takes a similarly scientific approach to optimising the customer experience. “We gather significant amounts of data about our customers’ habits, likes and dislikes,” Lagun says.“For instance, we invite customers to rate the dishes they eat and provide us with comments – these are passed directly to our chefs so we can make targeted improvements to dishes that do not delight our customers.”

The company uses heatmaps to analyse website visits and understand which areas are most appealing and which need to be earmarked for redesign or improvement.

Data is also used to identify customers that might be on the verge of cancelling their subscription and initiate strategies for retention.

“Through CRM and email automation we are able to contact customers when they display signs of lapsing or losing interest, to attempt to win them back with product launches. For instance, telling customers who have previously bought only plant-based products about our new vegan carbonara,” says Lagun.

Many subscription-based businesses use questionnaires and consultations to gain an initial picture of customers’ preferences and then use transaction data to build upon that knowledge base.

Skin + Me has put a heavy focus on its online consultation process, ensuring it captures all the personal, medical and lifestyle information a dermatologist would discuss in a face-to-face appointment. “The more customers that use our service, the more we learn from their behaviour, to refine and improve the experience,” says Jones.

“We’re incredibly privileged to really understand exactly what our customers want for their skin and we use that data daily, throughout the business, to drive all our decisions, from ingredient selection and formulation planning to packaging design and content ideas.”

New Bower Collective customers are invited to answer questions on its homepage to ‘build their own Bower basket’.

“We use this data on their unique household to tailor products to suit them,” says Hill. “By using data, we deliver the right amount of product to our customers at the right time.”

In the early days, Bower Collective took the opportunity to speak personally to customers on the phone after purchases to gather feedback. It would then combine these qualitative insights with data from Google

Analytics to make incremental changes to the shopping experience. For example, the simple addition of a four-step infographic helped users better understand its reuse and refill proposition, which improved the website conversion rate.

Brands using data to improve the customer experience can’t afford to stand still in an ever-evolving consumer landscape. “When you’re in success mode, you’ve got to invest in the basic infrastructure and modern way of operating – otherwise that’s you done,” says Hickmott.

Seasalt is one brand committed to continuously learning more about its customers and responding to their changing demands. At the end of 2020, it launched a renewed focus on data to help it gain a greater understanding of customer behaviour.

“We are using this insight to deploy targeted customer lifecycle retention campaigns and personalised experiences,” says Thom. “In 2021, we replatformed our website, allowing us to create distinct customer journeys. Our focus on data forms a significant part of our business plan through to 2025.”

Subscription services are an ideal way to collect rich customer data and keep consumers tied into a retailer’s ecosystem.

They were growing before the pandemic, but Covid-19 created the conditions to accelerate their move into the mainstream. Back in 2019, Royal Mail forecast that the subscription-box market would be worth £1bn in sales in the UK by 2022. However, its most recent Subscription Box Market Report, published in June 2021, showed the market had more than doubled in size in three years. UK consumers spent more than £1.4bn on subscription boxes in 2020 alone, with more than 88 million subscription boxes delivered across the country.

Microsoft’s Shave says subscription models can be attractive to brands because they are “more sticky” than selling a product via a third-party retailer. “Once you’ve got that initial purchase done, the chances of the customer moving to another retailer that offers the same sort of thing is quite slim,” he says.

Once brands have a customer “on the hook”, Shave says they can drive retention by collecting as much data as they can and enriching that data through analysis, making predictions about the customer’s intent and acting upon it.

Modern subscription schemes are helping to confound old notions that customer loyalty is simply about offering people rewards. “Loyalty for me is not just around loyalty schemes – it’s the ability to be agile and nimble and creative, and to change your product mix and proposition quickly,” says HSO’s Hickmott.
Brands like Pasta Evangelists, which have the ability to tweak the product offer constantly in response to consumer feedback, exemplify this mindset.

For Hill from Bower Collective, the key to a successful subscription service is solving a real problem and giving the customer what they want. “You need to be delivering an excellent product with outstanding customer service and a great online experience,” he says.

“Each incremental improvement made will help improve loyalty and decrease churn. Conversely, a poor online experience, weak product or bad service will increase your churn.”

Skin + Me says it builds loyalty by taking the burden of finding the right product – in this case, skincare – away from the customer. “All our customers need to do is tell us exactly what they’re looking to achieve with their skin and our expert dermatology team will do the hard work for them,” says Jones.

“Our pharmacists create personalised night-cream formulations for every customer, containing a selection of highly effective active ingredients that are only available by prescription. The ingredients often start at low concentrations, best suited to each customer’s needs, and the formulations evolve over time to help them achieve their individual skin goals.”

Jones says Skin + Me prides itself on the service it provides, with regular progress check-ups, a reformulation guarantee and round-the-clock support – “something customers just don’t get when buying off-the-shelf skincare from a traditional retailer”.

Gifting is another avenue through which subscription-based brands can attract new customers and turn them into loyal fans. Gelbard noted how many people discovered Bloom & Wild for the first time during lockdown in this way, with many recipients going on to become future customers.

Ultimately, the new generation of subscription-based retailers and brands are as keen for customers to buy into their community and ethos as their products. “With Estrid you don’t just buy any old razor, you buy into our point of view, which is a more inclusive and colourful future,” says Westerbom.

“We always strive to add a bit of magic through our communication and products, and we always want to deliver more than what’s expected of us. We believe that exceptional customer service and being community-driven in everything we do is one of the key drivers of loyalty and engagement.”