Personalization is a powerful tool in the durable goods retail industry — one that not only do customers expect but that competitors are using. Subsequently, companies that lack necessary consumer insight and personalization create gaps that allow the competition to step in and gain share.
On the flipside, brands that tailor customer experiences, recommendations, and even discounts to align with the specific needs, interests, and preferences of their shoppers can solicit increased investment — and greater loyalty — from their consumers.
Additionally, the utilization of personalization in the durable goods retail sector can offer numerous other benefits. According to a study on personalization by McKinsey & Company, this can include reducing customer acquisition costs by as much as half and improving revenue by 5 to 15 percent, and an overall increase in ROI by 10 to 30 percent.
Implementing Personalized Customer Experiences
However, implementation is not guesswork. Creating truly personalized customer shopping experiences involves using consumer data, technology, and SKU data analytics to better understand — and therefore better tailor toward — specific customer segments.
Nuanced data, such as SKU data and consumer insights that are offered through products like TraQline Durable IQ, Hybrid POS, and SKU Metrix, are making a big difference in the way companies can tap into these resources. These tools can help drive personalized shopping experiences, delivering more authentic experiences that create positive outcomes for customers and companies.
Understanding Consumer Behavior Through Data
Gone are the days when decisions were made by a “hunch” on the way consumers would act or what consumers wanted.
Today, data is readily available to create better decision-making opportunities for businesses. Consumer data helps companies understand what customers want, need, and expect, allowing them to customize the customer’s brand experience, ultimately leading to better revenue.
Importantly, accessing and analyzing consumer data is now more accessible than ever through data providers like TraQline and software-as-a-service (SaaS) platforms. With the use of these robust platforms, companies gain access to seemingly endless data points and consumer insights — delivered in a simple, efficient, and visual manner.
The key for companies is to identify the key customer preferences and purchase patterns within those bites of data to allow them to formulate product development, marketing, and engagement opportunities.
Data-Driven Product Development & Recommendations
As companies strive to deliver successful new products to market, using data-driven insights to understand what consumers need and want can make all the difference.
By aligning with market demand, companies can develop products that outshine the competition through the integration of customer-driven feature development, styles, functionality, and more.
Companies can also create personalized product recommendations for their customers. That is, deliver offers to customers for products they are more likely to buy, rather than random product pushes. While a company may have thousands of products, consumer data presents the opportunity to know which products to recommend based on market demand and buyer trend data — as well as through awareness of what the market is buying most at your top competitors.
Numerous product recommendation strategies exist, and all can be tailored to meet the individual needs of the company and customer base. Consider a couple key competitive intelligence product marketing tactics that can be done in the durable goods retail sector.
1. Personal add-ons or supportive products and services
If a company sells laptop computers, it’s likely their customer base isn’t going to purchase another in the next year. However, the customer base may need software, cables, as well as other accessories to make using the laptop beneficial.
2. Email marketing product recommendation strategy
With data about the customer’s needs, companies can then begin to market to them through email. In many areas of durable goods, customers need to analyze information numerous times before making a buying decision.
Companies that use email marketing as a touchpoint can deliver highly targeted messages about a product that encourages the customer to come back to the website. An interactive email, for example, showcasing the latest features of a car could entice the user back to the site sooner.
Customizing Marketing and Promotions
Data analytics is a valuable tool that can be used for personalized marketing campaigns. With this insight into the customer’s needs, interests, and wants, it is possible to this nuanced consumer information to deliver more effective promotional strategies.
A company that launches a sales campaign on one product can only assume to get customers interested in that one product to make the purchase. However, a company that, instead, is capable of sending targeted promotions to people based on their specific interests and proven needs is more likely to see amplified results in any campaign.
There may not be a better example of this than Amazon, which is consistently noted for its ability to provide highly targeted promotional content directly to interested parties. By leveraging what people do on their website, the retailer is able to suggest products for that category as well as for related categories that may interest them, increasing sales opportunities.
Creating Consumer-Driven Physical Retail Spaces
With tools like TraQline, companies can enhance the personalization process not just online but also through in-store experiences. McKinsey & Company pointed out that the use of creating an omnichannel experience for customers – where online and in-person interactions and all other touchpoints are equal, is a way of providing “moments of delight” for customers. It is in those moments that customers come back, time and time again, for support and to make purchases.
By implementing personalized customer service and assistance in physical locations, it is possible for brands to stand out from the competitors and leverage the data they have available to them to improve customer outcomes. The key is creating a seamless omnichannel shopping experience with personalization.
Consider how this can influence business decision-making, competitive intelligence, and product strategy.
Before a company can evaluate new store locations, it must have access to valuable data about the potential market within that area. Before any marketing can take place, it is critical to understand the customer.
Some of the data that helps with making these decisions falls into four categories.
1. Environmental data
Is there a local customer base for the product? This is often the most obvious of all factors to consider but is the critical first step. Does the local community support the needs of the business? You would not build a farm in Manhattan, for example.
2. Consumer behavior data
Next, consider who the customer actually is. This includes gathering valuable data related to the following:
- Who buys based on demographics
- What do they buy on average
- When do they make such purchases
- What is their pain point
- What motivates them to make a purchase
This information helps to define if that customer base exists within a target location.
3. Economic conditions
The financial elements within a company also play a strong role in how well a company can perform there. For example, are there enough customers within the target area to meet the company’s needs? Does the location have the financial means to support the company? This provides insight into the demand for the product based on the economic conditions present. For example, in a community with significant new housing expansion, an appliance center makes sense.
4. Competitive data
Who is the competition, and what are they doing well? Key to competitive business intelligence is understanding is not that there’s no competition but that there’s an opportunity to compete with that organization.
This information allows for demand modeling, a method that addresses how well a local community can support the company’s revenue needs.
Data-driven decisions are core to every business, no matter the industry. Consider the demographics carefully based on any location data available. For example, in a college-centric town, opening an IKEA, which offers competitively priced, modern furniture, could be a good idea. In an older community with larger homes, perhaps even historic homes, offering a luxury and high-end appliance store fits the bill.
Invest in High Quality SKU Data
Another data point for companies to consider is high-value SKU datasets. Most companies are already using SKUs to sell to their customers, and that often enhances the rate of selling as well.
However, SKU data allows brands to get to know their customers even better, further enhancing marketing and personalization. That could include information such as time, volume, and geographic level data. With this information, it can help brands to put the right products in front of the right customers at the right time.
Specifically, SKU data can help companies:
1. Make better decisions about which products sell within a smaller, highly targeted area, thus enhancing the decision to open locations within one area or the next.
2. Enhance their offerings to better meet the needs of the customer by putting the right product on the store shelves to meet those customer’s unique needs, maximizing the use of space while prioritizing their niche client base
3. Gain better insight into the length of time it takes products to move off the floor. This allows companies to notice, for example, if a slow-margin SKU is sitting for a long time and subsequently make a change, replacing it with a higher demand product within the local market, moving more products faster
4. Empower small retailers, even those with highly specialized inventory, to stand out from full-size stores in larger cities. Larger retailers tend to offer a bigger selection of products with the goal of targeting the biggest audience of customers. By providing more specialized products, smaller competitors can stand out.
Enhancing the Online Shopping Experience
With all of that consumer, product, and retail sales data available, how can companies translate it into online personalization opportunities as well? It may be easier to accomplish this than many organizations think. Personalization on e-commerce websites can be diverse and far-reaching, creating numerous opportunities to connect with customers in meaningful ways.
- Product Pages: Product pages can provide an exceptional way of educating customers and providing them with more of the data they need to decide.
- User Interfaces: User interfaces should be designed to create an omnichannel experience that aligns with the in-store experience. This includes everything from branding to how a person navigates the online site compared to how they navigate the local, physical location.
- Dynamic Content: Providing online consumers with access to dynamic content allows them to gather information they need that they could not obtain in a simple e-commerce store format, encouraging the buy.
- Product Suggestions: With tools that can provide better insight into the customer’s actions on the site, it is possible for companies to create more product suggestions, either encouraging a related product if the customer does not make a purchase or suggesting an added feature, further keeping them on the site exploring their options.
The impact of personalized shopping experiences is not just on increased sales, though that is typically one of the most valuable of the benefits. More importantly, though, it improves customer satisfaction. As noted in Forbes, not only does personalization in marketing for durable goods create good results, but it also creates an opportunity to maintain lifelong conversations with customers.
Investing in Personalization in Durable Goods
From SKU data to marketing insights from consumer behavior, personalization in the durable goods market is one of the most important tools companies have for improving their sales funnel, increasing sales, and building a better, more recognizable brand. Data analytics provides customized shopping experiences that consumers need and expect.
As a durable goods retailer, it is critical to embrace personalization to enhance customer engagement and loyalty, even over the long term.