How Best Buy, Nordstrom and Nike bring personalization to physical stores
Emails with personalized subject lines have stronger open rates. Consumers are more likely to purchase from a retailer that recognizes them by name and recommends products based on previous purchases. In other words, countless studies have come to the same conclusion: people prefer personalization.
Personalized marketing is a way for brands to take consumer data to use it to help curate the vastness of the Internet. And as long as it’s relevant, people generally don’t mind. Netflix has more content than anyone can possibly watch in a lifetime; its sophisticated recommendation engine keeps people from experiencing choice paralysis, ultimately saving the company $1 billion each year.
Personalization is crucial for digital marketing, but the vast majority of sales still take place in brick-and-mortar stores. And savvy retailers like Best Buy, Target and H&M are bringing it there.
Smart speakers, TVs, Rokus, video games: They’re all items you can purchase at Best Buy. They’re also all featured on Amazon’s Gift Ideas, a round-up of popular gifts that updates daily. One advantage Best Buy has over the ecommerce juggernaut is the ability to bridge on- and offline personalization.
Best Buy is another retailer that utilizes its app in that regard. Walk into the store and the app enters “local store” mode, sending relevant push notifications and tailoring the experience to that location’s inventory. There’s also an On My Way feature that lets sales associates know when someone is on their way to pick up an online order.
Last month, Nike opened a new flagship, a 68,000-square-foot store in Midtown Manhattan designed to be as personalized as possible. The sportswear giant offers NkePlus members one-on-one stylists and the ability to create customized products.
Smartphones factor heavily in brick-and-mortar shopping; they influence 56 cents of every dollar spent in physical stores, according to Deloitte Digital. Nike plays into that by making the app the centerpiece of the experience. App users get access to exclusive features and content, and even recommendations directly from Nike+ Experts. Those products based on people’s individual style and sports preferences, and they can be scanned for more information, purchased or reserved to a fitting room, all via app.
H&M uses data and artificial intelligence to customize the merchandise mix of individual stores, reducing inventory pile-up. The Swedish retailer also uses technology to let consumers customize their own shopping experiences.
At its Times Square flagship, H&M has voice-activated mirrors created by Microsoft and a pair of Stockholm-based agencies. Look at the mirror long enough and facial recognition “wakes it up,” offering personalized style advice, as well as QR code-activated discounts and selfie opportunities.
Clienteling is a well-established practice for higher-end retailers. Technology allows them to make that experience digital, both at home and in-store. Sales associates use Style Boards to create personalized outfit recommendations for their clients. Earlier this year, Nordstrom acquired BevyUp and MessageYes, a mobile clienteling and conversational commerce tool, respectively, to improve its in-store personalization capabilities.
Nordstrom was already strong in that department, thanks to its use of beacons. When someone runs the app in-store, beacon technology transmits messages about items on sale that may be of interest. If they’re lucky, they’ll also get coupons for the items in their abandoned shopping carts.
Last October, McKinsey found that the two aspects of personalization shoppers value most are relevant recommendations they may not have thought of on their own and communications with brands when they’re in shopping mode. Nothing says “shopping mode” more than being inside a store, and the 2014 acquisition of Pittsburgh start-up Powered Analytics helps Target hit both of those at once.
Powered Analytics combines mobile technology, location data and machine learning to connect retail apps to in-store shopping. That helps the retail giant pinpoint someone’s exact location in a store, delivering product recommendations based on their personal preferences, as well as the section they’re in.
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