Rethinking Personalization: Transforming Retail in the 21st Century?

Rethinking Personalization: Transforming Retail in the 21st Century?

We ended up having a profound discussion about the evolving landscape of personalization and its critical role in shaping the future of retail. Most retailers today have too narrow a view of the use and potential of personalization: they think of personalization in terms of segments, widgets on a site, and possibly some AB testing.

Fashion retailers are facing continually growing customer expectations as well as competition from economically more efficient businesses. To thrive in this environment, we discussed the importance of understanding shopper and product behaviours at a very deep level and leveraging that data to transform the entire business operations.

“What we mean when we talk about personalization is not just the ability to create tailored customer experiences but transforming the whole business end to end so we have the right product, in the right sizes in the right amount at all times” Matt Horn, Country Road Group

Personalization, when done correctly, holds the key to improving all aspects of retail. It’s about determining true demand for products, a sense of magic for consumers and reorganising the business to be seamless and operationally efficient.

Here is a summary of the key takeaways (you can also watch the video);

The Essence of Personal Intelligence

The core of this transformation lies in what we refer to as “personal intelligence.” When harnessed effectively, personal intelligence can lead to substantial increases in profits, revenues, and customer loyalty. However, achieving this requires a holistic approach to personalization, one that transcends the traditional, vague definition of targeting customers with the right message at the right time and executing through widgets on a page.

Importance of Alignment

We both talked about the need for a unified approach to personalization, where every part of the business is aligned and interconnected. There should be a single source of truth, with no silos, which holds the predictions for all customers and products to be used by all teams including buying, merchandising and marketing. This approach doesn’t stifle any creativity processes but enhances them by informing it with data-driven insights.

“If you tackle the topic of personalization in a disconnected or siloed way, you’re just going to create a disconnected experience. There might be moments of brilliance but to what degree is that really meaningful for changing the customer experience and your business as a whole.” Matt Horn, Country Road Group

Challenges and Solutions

While the benefits of personalization are undeniable there are also significant challenges involved. Legacy issues in data architecture, data quality, and technical capabilities must be addressed. However, these challenges are not insurmountable.

“The challenge of course is that the reason why everyone’s not doing this or hasn’t been doing this well [until now] is that it’s pretty bloody hard.” Matt Horn, Country Road Group

The Power of Data

Dressipi highlighted the importance of data integrity, stressing the need to decompose product data into customer-led data points. This, for example, allows retailers to understand customer intent in real-time, leading to highly innovative and personalized experiences. Data quality is key to the success of personalization efforts, as well as domain-specific models.

“One of the key lessons that we learned at Dressipi is if you can decompose the product into data points, as a customer sees it, and put a customer and fashion lens onto those products it means you can start to truly understand the customer’s intent in real time” Sarah McVittie, Dressipi

Solving Real-World Problems with AI

We then looked at a couple of examples of where we are using our AI within the Country Road Group brands. The first, showed how it is optimizing size curves and ratios, preventing fragmentation, overproduction and waste. This demonstrates the tangible benefits of personalization, not just in customer experiences but also in supply chain and sustainability efforts.

“When Dressipi approached us on this one, we were like, oh wow, there’s a whole world here that we’re not even thinking about. We just found it so incredibly energizing, the power of this and what it means for our business, particularly when we overlay any sustainability aspirations that the business might have as well.” Matt Horn, Country Road Group

The second case study showed the multiple ways Dressipi is developing new customer experiences which have led to higher revenue and lifetime value across all channels.

The Exciting Potential Ahead

We are both super excited about the future of personalization in retail. By harnessing the power of personal intelligence, we are excited about creating unique and engaging experiences for customers, driving loyalty to new levels, reducing fragmentation to zero (I mean the dream!), optimizing all operations, and contributing to a more sustainable future.

“This is genuinely the time for fashion retailers to start to embrace this because those that don’t, just won’t exist in five years time.” Sarah McVittie, Dressipi

“We’re fully bought into and pursuing this as hard and as fast as we can in, in its fullest sense.” Matt Horn, Country Road Group

4 Key Recommendations for Businesses to Thrive with Personalization

  1. 1. Define Personalization for Their Business: Personalization should be tailored to each retailer's unique needs and goals.

  2. 2. Build Data Capabilities: Developing the capability to structure and scrub data effectively is crucial. As is creating new, more high signal data.

  3. 3. Choose the Right Partners: In a crowded space, selecting the right technology and service providers is essential. Generic models do not work well in the fashion industry. Specific models outperform by some margin.

  4. 4. Experiment and Iterate: Personalization is an ongoing process that requires continuous refinement and experimentation.