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The power of personalisation

With the rise of the Millennial Mindset and associated shift in consumer expectations, retailers must adjust their propositions to maximise their overall customer experience (CX) or risk losing customers.

While there are many strategies which can go some way to achieving this, personalisation stands alone in commanding a disruptive potential akin to the transformative innovations of online and mobile purchasing. When deployed effectively, it has the power to fundamentally change the way the world shops both in-store and online.

What is true personalisation?

According to Smart Focus , "true personalisation is… creating unique, always relevant experiences for every customer" which enable the retailer to "engage each customer with the right content, for the right reason at the right time." In other words, true personalisation is achieved through the delivery of purchase and browsing experiences which are tailored to the individual needs and desires of each customer.

To be sure, this goes beyond simply suggesting similar products or products previous customers have bought together. According to research by McKinsey, personalisation is most effective when it delivers timely recommendations of products or services which are in line with the customer's previous purchases and browsing habits or their perceived hobbies, interests, or needs1.

In simple instances, this could be suggesting cufflinks to the customer who bought a suit jacket or recommending a foam-roller to the customer who bought running shoes. More sophisticated methods of personalisation, however, harness more than just current or previous basket contents to drive personalised suggestions. An automotive dealer using the Intelligent Car Configurator Concept (ICC), for instance, could gain a data-driven understanding of their customer's individual needs, empowering them to recommend relevant upgrades, such as a roof box, only if the customer is likely to be interested.

An example of dealer recommendations from the ICC

Online eliminates exclusivity

Until recently, these kinds of personalised shopping experiences were a luxury enjoyed exclusively by those who frequent the most high-end stores whose staff know the preferences and behaviour of each client. Through this deeply personal CX, they can tailor every retail experience to the needs and interests of each customer.

For logistical reasons, this was not widely attainable for stores with larger customer bases and so is not something to which your average customer has traditionally been accustomed, aside from the limited loyalty and ‘clubcard' supermarket schemes. The internet, however, is changing this. By harnessing data on purchasing and browsing habits, online retailers are gaining the ability to deliver that exclusive, high-end, in-store CX to the masses at even the earliest stages of the purchase journey. These can come in many forms, from recommended products on Amazonto personalised daily mixes on Spotify, with detailed data the driving force behind every example.

What's more, this need not be constrained to online. Using real-time data stored and delivered via the cloud, sophisticated personalisation tools like the ICC can transcend the physical barriers which separate brick and mortar from the web. A continual feedback of real-time information means such tools can enable customers to continue their purchase journey wherever they are, with individually relevant suggestions delivered at every stage of their exclusive experience.

But, despite almost ¾ of marketers agreeing that they must deliver a personalised customer experience to be successful2, only around 15% of today's companies are true personalisation pioneers, and most of them are tech firms and "digital natives"3. The majority of companies surveyed by BCG admitted they make little or no use of real-time data, something BCG label as a "major shortcoming."3

The personalisation arms race

By not delivering true personalisation, brands are failing to meet modern CX expectations, with 71% of customers frustrated by impersonal shopping experiences4, 83% expecting a personalised experience online5, and 45% of online shoppers more likely to purchase from a site offering personalised recommendations6. This growing discontentment is especially prevalent in the automotive industry, where only 0.5% of buyers are currently happy with the car-buying process7 and 54% would pay more for their preferred experience8. Addressing this demand would gift retailers a considerable lead over their competitors, empowering them to "deepen their [customer] relationships and gain a distinct competitive advantage"9.

This is more than mere conjecture and projected financial forecasts: businesses currently delivering personalised CXs are already seeing an average 19% boost in sales10 and a 6-10% increase in revenue - 2-3x more than those who are not3. Both Nivea and Pampers in particular have experienced significant results from their early endeavours into personalisation, despite tailoring content to groups rather than individuals. Displaying different digital storefronts to first-time and returning customers on Alibaba, Nivea has seen its browsing conversion rate and transactions increase by 70% and 150% respectively3. Similarly, Pampers saw a threefold increase in its conversion rate on Alibaba on the back of targeted offers which were tailored to existing customers and new parents3.

The true impact of these advances, however, will only be felt in the years to come. With the value of CX set to outweigh even price and product offering within two years11, the ability to nurture brand-customer relationships will become increasingly vital to companies hoping to survive in the modern world. Unfortunately for companies who are slower to adapt, early leaders in personalisation will enjoy strong customer relationships which could stand as barriers to their competitors' advances3. Whether they know it or not, modern retailers are in the midst of a personalisation arms race as they battle to establish themselves as purveyors of market-leading CX.


  1. J Boudet, B Gregg, J Wong & G Schuler, What shoppers really want from personalized marketing, 2017
  2. Signal, Digital Marketing in 2017: Trends and Predictions, 2017.
  3. M Abraham, S Mitchelmore, S Collins, J Maness, MKistulinec, S Khodabandeh, D Hoenig & J Visser, Profiting from Personalization, 2017.
  4. Segment, The 2017 state of Personalization Report, 2017.
  5. Monetate, Retailers at risk of alienating customers as 83 per cent expect a personalised experience, 2016.
  6. K Saleh, Online Shopping Personalization - Statistics and Trends.
  7. B Tuttle, Here's a Good Indication of How Much People Hate Car Dealerships, 2015.
  8. Autotrader, New Autotrader Study: Consumers Want Big Changes to the Car Buying Process, 2015.
  9. M Ariker, A Díaz, J Heller & J Perrey, Personalizing at scale, 2015.
  10. Econsultancy, The Realities of Online Personalisation, 2013.
  11. Walker, Customers 2020: A progress Report.