5 Retailers That Do Personalization Best
The 2022 Retail Personalization Index includes findings from three surveys:
- Consumer personalization survey: 5,014 consumers aged 18–84 based in the US and the UK in a split representative of the ratio of the national populations (4:1), surveyed in October 2021.
- Retailer personalization survey: 260 brands and retailers that have an online presence and are based in the US and the UK in a split representative of the ratio of the national populations (4:1), surveyed in October 2021.
- Consumer privacy survey: 1,002 consumers aged 18–84 based in the US and the UK in a 50:50 split, surveyed in December 2021.
What are the top traits of retailers that get personalization right? It seems the answer is a strong utilization of data-driven personalization and a truly integrated online and in-store experience.
To uncover which retailers are personalizing the shopping experience successfully, Sailthru, a CM Group brand, examined 260 retailers to develop its fifth annual “2022 Retail Personalization Index.”
A team of researchers calculated the scores of the Retail Personalization Index, which come from a checklist of 80 attributes that a retailer could implement to personalize and/or enhance a customer’s experience across site, email, mobile, other digital channels (which includes in-store, social, and traditional mail), offline, and privacy.
This year retailers were scored out of a possible 80 points. Thrive Market, the health-first membership for conscious living, and Sephora, global beauty retailer, tied for the top spot with a total score of 65.
[See the “2021 Retail Personalization Index” rankings here]
With a combination of DTC start-ups and large brick-and-mortar companies at the forefront this year, top performers prove that every type of retailer can use the zero- and first-party data they collect to create highly successful personalization strategies that deliver more value for customers and higher returns for brands.
Email also proved to be a top performing channel for DTC and native digital brands, such as 1stDibs, Wayfair and Fashion Nova, which jumped from 69th in 2021 to 12th place in this year’s overall ranking. Ranked sixth, Fabletics scored highest in email for its advanced product filtering and curated product recommendations among many features.
“Over the past two years, brands have had to focus on short-term gains, whereas consumers have increased their expectations for meaningful personalization both online and in store,” said Jason Grunberg, general manager at Sailthru. “That means there is now a lot of work to be done in order for brands to meet these new customer expectations and see successful revenue generation at the same time. With more retailers turning to zero- and first-party data strategies to drive the future of marketing, it is more important than ever to create value-driven personalized engagement with customers to collect insights that offer continuously better experiences - and revenue opportunities - across every touchpoint.”
A study commissioned by Coresight Research and Sailthru as part of the 2022 Retail Personalization Index, found that 71% of consumers will shop more often with brands or retailers that personalize their communications. While the vast majority (98%) of retail marketers use some form of advanced personalization, many are not delivering personalized experiences that live up to consumer expectations. While 71% of retailers think they excel in personalization in marketing, only 34% of consumers agree. It is critically important for retailers to develop more value-driven personalization that encourages true consumer engagement across channels and supports zero- and first-party data collection to support personalized marketing and commerce in the future. There is ample opportunity for retail brands who rise to the challenge, as 80% of consumers noted that they would share data in exchange for deals and offers, while 70% would share data for loyalty points.
Below are the top five scoring brands in the 2022 Retail Personalization Index. For the full list click here.
Thrive Market
Thrive Market came in a close second last year, after Sephora, but this year has tied it up with the beauty retailer for the top spot in the Index.
The e-commerce membership-based grocery retailer earned high scores for its sophisticated mobile app and email experiences, said Sailthru, using a data-driven personalization strategy that enriches the entire customer experience. Thrive Market dominated the mobile category with its highly intuitive app that is driven by past purchases and preferences, and also earned high marks for its email approach, in which the experience is immediately personalized from onboarding data and continues to integrate even more advanced personalization elements over time. It also includes a combination of newsletters and triggered content in its emails that help gather additional insights and drive more sales.
“We are thrilled to have been crowned as a top performing brand in this year’s Retail Personalization Index,” said Lindsay McGovern, Senior Director of CRM & Lifestyle at Thrive Market. “Personalization is integrated into our entire customer strategy, from the moment someone lands on our webpage, to our ongoing relationship on email and on our app. Our approach to personalization creates incredible value for our members – and drives strong performance for the business. We see an accelerated first-to-purchase experience, stronger repeat purchase rates, and higher overall lifetime value.”
Overall Personalization Score: 65.
Sephora
Sephora saw success for its highly orchestrated online and in-store personalization approach based on loyalty and experiential marketing. said Sailthru. “Sephora topped the website category with a robust loyalty-driven experience that makes the beauty retailer’s vast product catalog feel relevant to millions of customers — and seamlessly connects online experiences to in-store shopping.”
Additionally, Kohl’s rolled out “Sephora at Kohl’s” experiences last year to around 200 stores and the retailers plan to bring “Sephora at Kohl’s” to at least 850 Kohl’s stores by 2023. The beauty care spaces are staffed by Sephora-trained associates to provide personalized service, and Sephora purchases made at Kohl’s stores and on its website are eligible for Sephora’s Beauty Insider rewards benefits, tying its loyalty plan into even more spaces.
Overall Personalization Score: 65.
DSW
DSW earned the third spot for its personalized communications during a customer’s first interactions with the brand and an online shopping experience that mirrors the one in store, said Sailthru. “DSW offers top-notch personalized shopping experiences on every channel, including more than 500 brick-and-mortar stores, which helps the brand build strong loyalty and makes it a shoe-in for the Index’s top tier.” The shoe retailer had a perfect score in the offline category.
Overall Personalization Score: 64.
Best Buy
Best Buy once again tops the Index this year, after placing third last year. The electronics retailer also boasts a perfect score in the offline category. “With the expertise of its Geek Squad, Best Buy has become synonymous with in-store (and online) expertise and personalization, making the electronics giant one of the best to do it,” said Sailthru.
Demonstrating true channelless retailing, Best Buy recently reported it has seen a 72% uptick in customers using the Best Buy mobile app while inside stores. “This also creates an opportunity for us to build more digital interactions and technology-related solutions to support their needs,” said Damien Harmon, Best Buy’s EVP, omnichannel. Additionally, the retailer said the number of employees who have the skill sets to complete a consultation has grown by 78% last year. “And with each consultation, we can inspire what’s possible,” noted Harmon. Customers spend 17% more across their lifetime value, and they purchase more often when engaged for a consultation, he said. “Customers are loving this experience, and we’re seeing strong NPS. When surveyed, 92% of customers say they will likely continue working our expert. And when customers engage with one of our consultations or designers, they shop with Best Buy two times more frequently.”
Overall Personalization Score: 60.
Adidas
“When adidas created customized videos for 30,000 Boston Marathon runners, it cemented the company’s commitment to (and skill at) creating personalized experiences,” said Sailthru.
The sneaker retailer is continuously moving up the ranks, jumping from its No. 9 spot on the Index in 2020 to No. 6 last year, now snagging the fifth spot. Adidas also notably had the top score in the privacy category out of the top five retailers on the Index.
The company has also been working to modernize its ERP system, providing the technology foundation needed to connect its data across its entire global operations. By creating a cloud-based consumer experience, adidas can offer personalized discounts, early access to new releases and collaborations, priority consumer service, and the ability to personalize experiences and offers.
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Overall Personalization Score: 59.