Weak personalization can have a negative effect on consumers, with two in five saying they would stop buying from a brand if they perceive their ads to be unrelated or poorly targeted, according to a report by marketing platform Emarsys.
The study, which interviewed 2,000 consumers in the UK, highlights shopper’s growing demand for more personalized offers (60%), adding that only 6% of consumers currently believe they receive these.
Creating a tailored experience is therefore key, with 41% of respondents say they would shop again with a brand if the offers they received were clearly unique and personalized to them.
However, brands are struggling to scale their human-led personalization efforts, identifying the need for automation processes and artificial intelligence (AI) programs.
“The customer is expecting an experience that they want to be personalized in a speed that is impossible,” a representative for German agile-retail start-up Les
ara, told the audience at the recent Emarsys Revolution conference. He added how technology is an enabler for personalization, and how the company has been using data as a “north-star” to guide its efforts.
Also at the conference was membership-only e-commerce brand, BrandAlley, which shared how its effort to tailor its email content to previous purchasing behaviour with the help of AI, increased traffic to its site by 16%.
AI adds immense value to personalization strategies, noted Grant Coleman, VP and market director of the UK and Nordics at Emarsys: “AI tips this balance in [retailers] favor, doing all the legwork so that communication is always tailored across every channel along the purchase lifecycle, eliminating the risk of upsetting valued patrons.”
Across the industry we’re seeing a steady increase in brands focusing on personalization by deploying tools such as AI. Recently, H&M invested in Thread, a UK-based men’s styling service that uses a combination of man and machine to tailor recommended items for its users. The move shows that the Swedish group is well aware of such technology as an important catalyst for all future consumer interactions.
How are you thinking about personalization? We’re all about finding you the perfect partners for your innovation strategy.TheCurrent is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.
Who decides what we buy online? Well, we do of course. But other people have an influence too. Friends, family, significant others, and celebs (from A-list to Z-list) can all play their part in our final e-buying decisions, as well as how we shop in physical stores.
Which is why influencer marketing is so important and is going to become even more relevant to the luxury and premium brand sectors over the next decade, global influencer marketing platform Traackr and digital marketing agency The Myndset say. They reckon influencer marketing can be a way for smaller brands to compete with the major players.
The reason is that if brands get it right, influencer marketing can be both cost effective and generally effective, reaching the parts other marketing channels can’t and at lower cost.
Myndset president Minter Dial said: “Luxury market CMOs must re-evaluate and realign budgetary spend around achieving true impact. The measurable benefits of advanced influencer marketing practice are enabling niche luxury clients to compete on a level playing field with major players…[As a result] all luxury brands can achieve compelling ROI and demonstrably increase sales, brand resonance and achieve superior insights into their valued customers.”
So how do Traackr and Myndset reach this conclusion? A recent study by McKinsey and Altagamma Foundation estimates the percentage of luxury sales made online should rise from their current 6% of total luxury sales to 18% in 2025, reaching €70bn.
And influencers are key when consumers shop online. Luxury may have been late to this, but as they realise that the future is all about the younger millennial shopper and that this shopper is fully connected, they’re racing to come up with effective influencer marketing strategies.
Luxury brands have traditionally relied heavily on expensive marketing methods such as glossy print and flashy TV campaigns, as well as creating expensive online brand experiences and spending heavily on creating beautiful stores. But achieving the personalisation, true engagement with and impact on their customers has remained difficult to achieve.
Traackr thinks they’ve been missing a trick lately with “trust [being] largely driven by peers and authoritative content” with only 3% of individuals driving 90% of conversations and impact online.
Luxury and premium brands are, of course, taking notice of this. Traackr cites an Econsultancy report on fashion and beauty. Apparently, 59% of company decision-makers are planning to boost their budgets for this area this year and Myndset research reveals 67% of luxury brands and 60% of premium brands considering digital “important to very important” in understanding their customers.
That’s because digital has been such a huge disruptor for their business. While 11% of non-premium and non-luxury companies say digital is a disruptor, 42% of luxury brands and 28% of premium brands say so. If you want to know more, the white paper can be downloaded here.
This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday.
The idea of humans as contradictory beings isn’t a new one, but social media is making such personal dichotomies more evident than ever before, even in life’s happiest moments, according to a new report launched by off-price luxury e-commerce site, The Outnet.
Written in partnership with audience intelligence platform, Pulsar, the study analysed 33 million posts related to the way in which consumers share moments of “joy” and “thrill” worldwide across Facebook, Twitter and Instagram during May 2016.
Central to the findings is the idea that consumers are indeed extremely fickle. We celebrate uniqueness for instance, but we seek to be part of a tribe. We’re less concerned about material wealth, but what we wear and how we display it is more important than ever in our images. And we’re eagerly searching for time to disconnect, but we continue to capture those rare moments by digital means.
None of that may sound at all surprising, but the depth of the study provides some valuable lessons for businesses playing in the content marketing space and looking to figure out what motivations lie behind consumer behaviour today.
The perfect example lies in the selfie – one third of all photos in the study included a person or people in them. Rather than being solely about personal image or a means to draw attention to the creator, however, the report suggests these portraits are increasingly leaning towards supporting individuals’ growth and development.
Social media has long been a place for users to curate and edit the best versions of themselves, but the focus of that is moving to being primarily about positive steps to self-improvement and the achievement of one’s goals.
In fact, personal growth as a theme was the number one driver of discussions around joy and thrill globally (49%) in the study, which maps to broader evolving consumer trends currently in existence. Wellbeing and mindfulness have moved the topic of health, for instance, beyond a conversation surrounding just diet and exercise, to entire mental and physical lifestyle choices, which are in turn impacting businesses at every level.
This makes personal growth as a whole a really interesting one for companies to consider in terms of the way they speak to consumers – it’s not only about selling products to them anymore, but ideas and emotions that will both fit with and help fulfill such lifestyles. Brands should be thinking about how to help consumers feel more empowered, and to provide them with a service that improves their lives.
As Andres Sosa, EVP of The Outnet, said: “Having these results available for the business will be a key focus point in helping to drive our communication strategy forward. We can create touch points in relation to these moments, ensuring what we offer as a brand truly replicates and resonates with [them].”
The same goes for the way in which consumers look at the idea of belonging (referenced in 31% of posts globally). There’s desire to find joy in solidarity with others, even with the individuality that so anchors social media otherwise.
The digital era has brought about a quest for uniqueness as well as the idea of existing as part of a tribe. Businesses today should therefore be thinking about offering greater personalisation than ever, but ensuring their fans and followers feel a part of their community alongside.
The final trend in the study surrounds the idea of joy and thrill as it relates to experiences and discovery (16% of posts). Consumers are not only travelling more than any other time in history, but valuing such adventure in order to have greater things to share on social media. We’ve shifted to a time of less conspicuous consumption and instead happiness in discovering and capturing the everyday beauty of the world.
This directly relates to the fact that shoppers are valuing experiences over material wealth to a greater extent than ever before. According to the Boston Consulting Group , 55% of all luxury spend today is on luxury experiences, and that number rapidly scales when looking at the millennials market specifically. This is about being able to say “I did this” rather than “I bought this”.
Again, it’s crucial for businesses to respond to these changing motivations to best serve their customers – to think about experiences and that broader lifestyle piece as a part of their brand in the same way they curate their product proposition.
The Outnet, which is part of the Yoox Net-a-Porter Group, focused on thrill and joy as the foundation of the study to relate to its recently launched #TheThrillOfTheFind social campaign and its “Everything Reduced But The Thrill” tagline. Overall, the results serve as a positive outline of seemingly incongruous trends to consider for content strategy, but in a broader sense, they’re also a unified reminder that consumers today seek meaningful relationships and not just transactions.
Disclaimer: The author Rachel Arthur served as a consultant and contributor to this study on behalf of The Outnet.
Despite the fact email is one of the most cost effective forms of digital marketing, and a proven route to drive traffic, only 30% of luxury brands are using it to its full potential, says customer engagement specialists ContactLab.
Its new report, conducted in conjunction with Exane BNP Paribas, suggests email marketing practice is relatively primitive in the sector, and reveals an opportunity gap surrounding better segmentation and personalisation of content, as well as integration with other channels.
It highlights brands including Burberry, Cartier and Armani as leading on its “Email Competitive Map”, comparative to others such as Cèline, Prada and Givenchy who are dragging behind. Unsurprisingly, such email performance seems to align with overall digital competency, according to the research.
Other negative factors specific to email strategy include excessive frequency and an overwhelming commercial bias. But it’s brands who do not exploit data collection to achieve full segmentation that create the largest impression of complacency, it suggests.
Marco Pozzi, author of the research, says: “Achieving customer segmentation will always be a challenge but there remains a lot of room for luxury brands to differentiate in their emails and create more personalised campaigns. Simply sending generic content and treating all customers as one does not build a relationship with customers. Customer shopping habits have changed and they expect an integration of different channels as part of the omnichannel experience. ”
It’s not all bad news however, there are a few luxury brands who do already distribute personalised messages. Of those, Dolce and Gabbana is leading, followed by Armani, which addresses recipients according to gender/title, building a strong relationship with customers in the process.
Continuing on a positive note, ContactLab pointed out that, across the board there is good performance on email localisation (key languages) and structure (composition, visualisation).
“With the modern customers having an overload of content and often bombarded with emails, brands need to ensure the emails they distribute are relevant and thus capturing the attention of the consumer,” Pozzi adds. ContactLab’s study suggests customers prefer a varied mix of content that isn’t too commercial. Hermès leads the way with a balanced mix of branding, commercial and store-focused content, it highlights.
The report outlines the fact email marketing offers opportunities for brands to receive large amounts of traffic via smartphones and tablets particularly. Time spent browsing on such devices is notoriously short, so targeted emails that stand out from the crowd are essential.
So what does the future look like for email marketing? Luxury brands need to review the different services they offer and integrate cross-channel communication. A small number of brands ask for ZIP codes and postcodes, which could be used in conjunction with store locators. Elements like ‘buy now’ buttons and links to shoppable apps should also be introduced. Right now, only Cartier includes a “Book an Appointment” tab and only Burberry offers a “Collect in Store” option. Technology to incorporate cross-channel communication through email is already available, so expect to see more of this sometime soon.
It’s worth remembering that although email is only one aspect of the ecosystem, the impact of effective digital marketing can result in a 40% increase in revenue. A separate study by McKinsey also shows that 75% of luxury consumers interact with at least one digital touchpoint before making a sale in the offline world. A strategic use of email that caters to the user’s needs must be implemented.
Hey, guess what – e-commerce is becoming really important to the luxury sector but not enough luxury brands quite ‘get it’ yet.
OK, tell us something we don’t know. But cynicism aside, it’s always interesting when someone pulls that kind of information together and puts it into context. And that’s what L2’s latest Digital IQ Index for fashion has done.
I decided not to cover this story when it came out last week as the headline that Burberry’s doing so well in digital didn’t really throw up any surprises. But digging deeper, it stunned me how so many luxury brands are still not thinking truly digital.
Why does it matter? Well, as much as 83% of luxury growth last year came from online sales. A year earlier the figure was just 33%, up from a pretty pathetic 5% from 2010 to 2013 (I say pathetic, of course, because the mass-market had been happily getting online for years before that).
Why is luxury so slow?
Not that it’s such a surprise that luxury has been slow coming to the table. The sector’s $129bn in offline apparel sales are pretty impressive without the relatively tiny $210m in online sales. But with the latter figure set to double in five years and continue soaring after that, and with many consumers increasingly expecting a sophisticated approach to online, luxury can’t continue to bury its head in the sand.
Some brands are getting it right – very right. L2 said that the top 10 brands accounted for less than a quarter of that $129bn in offline sales. But online, they account for 65% of sales – yes, you read that right. On the downside, it also means that plenty of brands are getting it wrong – very wrong!
From genius to feeble – how brands fare
Anyway, the report looks at a large number of luxury brands and how they’ve performed online generally and in e-commerce, taking into account the many features designed to make the user journey easier/more pleasurable.
So, who’s doing well? Yes, Burberry’s out there in front (as it usually is, although it did drop back a little in last year’s list). It beats Kate Spade by one point with both given ‘genius’ status by L2. Burberry stands out for its well-rounded approach to both established platforms and emerging ‘cool kid’ platforms like Periscope and SnapChat, and for its upgraded mobile channel.
Burberry has invested heavily in improving the buying experience on mobile and its mobile penetration tripled after it updated its m-commerce channel.
Cole Haan was also singled out for praise in this area and for reducing mobile checkout from around 15 clicks to one thumbprint by using ApplePay.
Plenty of other brands are getting it right too. Digitally ‘gifted’ brands in L2’s list include Ralph Lauren, Louis Vuitton, Gucci, Michael Kors, Bottega Veneta, Hugo Boss, Jimmy Choo, Diane von Furstenberg and Dolce & Gabbana. Valentino also came into the gifted category, which is great given that it was so slow getting online in the first place. In fact the New York Times said that since arriving on Instagram, the brand has posted more than almost any other. Go Valentino!
But L2 is pretty scathing about some other luxury labels. Chanel, Paul Smith, Balenciaga, Prada, Alexander McQueen, Alexander Wang and Dior may be fashion influencers to you and I, but L2 said they’re digitally ‘average’. It also said Chloé and Pucci are ‘feeble’. And Céline, Jean Paul Gaultier, Givenchy, Kenzo, Miu Miu, Sergio Rossi and Vivienne Westwood are ‘challenged’. Ouch!
What’s the problem?
Some brands are doing lots of things wrong, it seems. That can include not bothering to find out any extra information about their customers online, apart from their gender and birthday. While face-to-face they’re falling over themselves to find out as much as they can about them in order to improve their in-store shopping experience, online, they just don’t seem to care. Bizarre.
And many aren’t global enough online, even though they are offline. They appear to think their brands are strong enough not to have to speak to potential customers globally in their own languages. Big mistake says L2.
Any more faux pas? Yes plenty. One of the most interesting is that they don’t get that search is key and a social media ad video strategy isn’t enough to make them visible. Paid search is being neglected, which is a major obstacle to growth in an increasingly crowded e-commerce space, L2 said.
There’s more, a whole lot more but I doubt many people would read that far if I reported it all. It does seem strange that such a report full of criticisms could come out as late as 2015. We live in a world in which online just shouldn’t be ignored by so many companies that are so far ahead of the pack in so many other areas.
Can’t wait for next year’s list to see whether the “must try harder” message has got through.
This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday
Are selfies now impacting our spending habits? Perhaps that goes without saying on the basis of wanting to look good, but new research from TK Maxx in the UK, also shows the population is buying more in a bid to not appear online in the same clothes twice.
In a move that sounds more Kim Kardashian than Kate Middleton, the retailer asserts that while the ultimate fashion faux pas used to be turning up to a party in the same outfit as someone else, today it’s all about being tagged more than once in it on social media.
A reported 28% of Brits admitted they buy new clothes just to avoid being multi-tagged in the same outfit, while 18% of them said they wouldn’t wear a look again if they knew there was a chance of it appearing online.
Better yet – men appear the biggest culprits, spending an average of £61 to “safeguard against this modern day anxiety”, as opposed to women’s £53.50. Facebook, Instagram and Twitter were cited as relevant platforms.
The study from TK Maxx, which polled 2,000 men and women from ages 18 to over 60, follows the launch of its spring/summer 2015 campaign celebrating the style of 10 of its customers.
Association with such insights is of course a smart move for a retailer that bases its branding on offering more for less. As Deborah Dolce, group brand and marketing director at TK Maxx, encourages: “We encourage people of all ages, shapes and tastes to enjoy expressing their style from within the wide and ever changing selection of designer finds and unique gems in our stores. Since our savings are outstanding, we’d love people to have some fun creating their own looks. Shoppers can find great labels and quality and curate many outfits that they love for less to ensure that their wardrobe is socially media-proofed.”
Paid search is still considered to be the most effective customer acquisition tactic, according to the 2014 State of Retailing Online study, released by Shop.org and Forrester Research in the US this week.
A survey of 81 retailers during May and June 2014, showed search engine marketing is considered top by 85% of them, and they’re accordingly spending more of their interactive marketing budgets on it than on anything else.
Also on the list for acquiring customers were organic traffic (41%), affiliate programs (40%) and remarketing/retargeting through online ads (29%). The latter, alongside behavioural targeting, sees display ads now ranked as the second highest area of marketing spend behind paid search.
Meanwhile, social media is also getting increased attention from retailers. Over half of those surveyed said they are dedicating more spend to the likes of Instagram, YouTube, Pinterest, and Twitter in the coming year, while 62% plan to spend more on Facebook interactive marketing efforts this year than last.
“Thanks to the effectiveness and renewed budget focus on display advertising, Facebook cannot be counted out from a retail advertising standpoint,” said Forrester VP and principal analyst, Sucharita Mulpuru. “People think of Facebook as a social network, but in reality it’s another medium for personalised display advertising – likely explaining why Facebook has surfaced so high in planned budget spend this year.”
The study also found that 42% of retailers’ email opens now happen on smartphones, up from 28% in 2013, while email open rates on tablets grew from 16% to 17%.
Online retailers in the US will prioritise site optimisation, mobile and tablets in 2013, according to a new report from Forrester Research in conjunction with Shop.org.
The State of Retailing Online 2013 (SORO) study shows the aim will be to “improve the customer experience and increase web conversion and loyalty across all devices”.
Over half (51%) of those surveyed cited site optimisation as key, referencing a focus on checkout optimisation, alternative payments, user experience, testing, and product detail page enhancements.
Meanwhile, 43% outlined that they would be focusing on mobile and tablets this year, investing in new or improved mobile apps and mobile-optimised sites, analytics, and traffic and conversion growth.
Shop.org executive director Vicki Cantrell, said: “While direct mobile commerce is still small, mobile services are now an established and significant part of the shopping experience. Retailers this year are smartly investing to create a holistic customer experience across stores, desktop, and mobile to improve conversion rates, grow crucial repeat customer business, and even capture their share of customer demand from international markets.”