Brands and retailers have an opportunity to pause and listen to what their customers want before blindly marketing products at them, says Sarah Curran-Usher.

If your customers seem happy to fit into the box you designed for them, then you are making the false assumption that they will be happy next time.

Consumers are fragmenting into what is sometimes called the ‘niche of one’. A successful product purchase increasingly relies on the retailer being able to support them with personalised social, email and text communications. But how can a brand or retailer actually know what the customer really wants?

There are many valuable data points that businesses may not know about their customers but that benefit how they can engage: a customer’s preference on style, colours, fit and size; what they feel about sustainability and how it affects how they shop; their delivery preferences, whether to store or home; their communications preferences; their public persona on social media or the price points in which they shop.

But this is not a one-way street; we call this the loyalty loop, where retailers gain an increasingly deeper understanding of their customers as those customers interact, buy and feed back. 

“Consumers don’t just wear brands, they own and live them, and they are telling the world what they want through Facebook, TikTok, YouTube and blog sites. But are brands listening?”

This then enables the retailer to only display products, prices and packages that they know the customer is looking for.

Using data to learn about a customer and market in a meaningful way strikes me as one of the biggest opportunities still available in retail. 

Consumers don’t just wear brands, they own and live them, and they are telling the world what they want through Facebook, TikTok, YouTube and blog sites. But are brands listening?

Selfridges does it well because it knows who its customer is in real life and what they want in store, and works with its brand partners to build amazing in-store experiences.

Boden is another. Having seen conversion rise for womenswear by enabling customers to use a fit tool to express their exact preferences, it is now adding kids. Ugg has taken a similar route because it is a unique product and customers found it hard to choose their perfect fit. Conversion has doubled since it offered personalisation tools.

The rewards are significant because retailers can then act in near real time based on what they are seeing, on particular spending trends, so they can make seasonal product drops rather than holding stock for months ahead. They can identify their full-price shoppers as opposed to discount-only shoppers and play to their strengths.

New segments

Such insight might reveal new potential segments, such as customers who want to buy some things second hand or rent rather than buy. Brands are experimenting with this, but they are reading the macro market trends rather than tuning in to individual customers’ preferences.

Privacy is important but only to the extent that customers need to trust retailers not to share information with the wrong people. (This does not mean they do not want to share it if the rewards are visible and generous.) The most generous reward a brand can give is to show customers that they understand exactly what they want.

“The most generous reward a brand can give is to show customers that they understand exactly what they want”

How many companies have been launched by people who said they could not find what they wanted on the internet so they did it themselves? The answer of course is many. Here is the clue for brands to respond by creating a more level- and data-rich playing field on which both they and their customers can participate as equals.

But the bottom line is higher revenue. Personalised communications based on insight into individual preferences translates to higher conversion, increased purchase frequency, higher average order value over time and lower returns, leading to a positive lifetime value measure. 

And of course, current investment in acquisition, re-marketing and returns management can all be reduced as retailers get it right first time more and more often.