Personalisation creates stronger connections with customers
The success of Aussie mass customisation startups Mon Purse and Shoes of Prey has put a spotlight on the re-emergence of personalisation in the retail landscape. The broader trend can also be seen in initiatives like McDonald’s “Create Your Taste” menu and Trunk Club’s personal stylist service.
Retailers are increasingly looking for ways to give customers more creative control over their products and services. This was the topic of the Australian Consumer, Retail, and Services (ACRS) research unit’s thought leadership seminar in Melbourne on Wednesday.
ACRS managing director Sean Sands said personalisation is partly a flow-on effect of social media use, which has made people less risk-averse, an advantage when asking them to do something they have never done before, like design a shoe. But it is also a reaction to the kind of anonymous, transactional shopping experience that has cropped up with e-commerce.
According to research Sands presented, some customers are willing to pay 150 per cent more for things they are able to personalise.
Both luxury and budget brands have started offering ways to personalise the products they sell, with Gucci allowing customers to add embroidered patches to a thousand-dollar handbag, while Japanese fashion company Uniqlo lets shoppers design and print their own graphic T-shirts for around $26.
But retailers also need to think carefully about the amount of effort their personalisation initiatives require from customers, Sands said.
When Shoes of Prey first launched, the startup offered over a billion different options to design a pair of shoes. This created an overload of choice for customers, and 98 per cent of visitors abandoned the website before purchase. Over time Shoes of Prey has made its design process less burdensome for customers by streamlining options and recommending designs that go well together.
Most personalisation initiatives today have focused on products, but there is a great deal of potential to personalise services too, Sands said.
Tory Burch has developed a virtual Client Book, which retail staff use to recommend new merchandise to individual customers based on their past purchases. The system only suggests items in stock in that particular store to increase the likelihood of a sale. Jeans company True Religion uses a similar tool.
As Sands pointed out, these examples actually recall the way retail operated in the past, when store owners were likely to know the preferences and past purchases of all their customers. Technology is simply making it possible for retailers to deliver personalisation at scale.