![Unlocking the Power of Personalization [PODCAST]](/uploads/rrpodcast-banner.jpg)
Personalization is the tool for staying ahead of the competition. Especially in a time when customers have less disposable income - knowing what they want, when they want it is key to increasing revenues and reducing returns.
Listen to Sarah McVittie, co-founder of Dressipi on The Robin Report podcast discussing how to drive a step-change in personalization for apparel ecommerce.
Don’t have time to listen now? Here are some key takeaways from Sarah:
1) Inflation will hit retailers hard
It’s no secret that the retail industry is going through a big period of transformation. There are pressures on pricing, pressures on the supply chain and as brands are more accessible globally, the customer is increasingly fickle and harder to retain.
“Retailers have to fight a lot harder to get those customers in and when you get them in, you’ve got to keep them” - Sarah McVittie
Add to this, the cost of living crisis. It’s going to hit hard. Customers are going to have less disposable income therefore spending less on clothing. Retailers have to figure out how they get that customer to spend with them over other retailers - this means personalization has never been more important.
“It is absolutely vital that when you’ve spent the money to get the customer to your site, you have to convert them. You have to be able to say they’ve come to my site to buy something, what is it? Let’s put the right product in front of them.” - Sarah McVittie
You need to make sure you show customers exactly what they want or need because you need to make sure their one purchase is with you.
2) What personalization actually means
“Personalization at the core of what it means is that you are able to hyper-personalize every single bit of the journey to every single customer in a way that is unique to them.” - Sarah McVittie
Online shopping in the fashion industry is stuck in the 1990’s - it’s embarrassing. Personalization efforts are only scratching the surface and they’re lacking relevance. It’s not enough to survive the next industry disruptor.
Customers do not want a flat journey that shows the same products in the same order. They want an inspirational, personalized journey that is completely relevant to them and they are increasingly expecting hyper-personalization.
Companies such as Netflix and Spotify have driven these personalization expectations and retailers need to take learnings from them to start delivering truly relevant content to every single user.
Personalizing to the individual is now a must and this is what makes Dressipi different.
“We’re like Netflix-level personalization for online-apparel retail.” - Sarah McVittie
Dressipi has everything a retailer needs to scale personalization and to show customers the items they’ll love - and keep. This includes personalized recommendations and outfits across the customer journey, updated in real-time. What is apparent now is that if you don’t give this level of personalization, you will get left behind.
3) The ongoing returns issue
It’s increasingly important to reduce your returns in a time when you really need to protect profits AND with the cost of returns going up due to increased delivery costs. This is becoming very apparent with retailers such as Zara announcing they are going to start charging for online returns.
“There’s no point helping retailers to increase their revenue if you’re not also reducing the return rate because your net benefit will actually be negative. You need to make sure customers only buy things they’re going to keep.” - Sarah McVittie
Consumers are also becoming aware of increasing prices which leads to an increase in returns. For lower to mid priced retailers every £1 increase in a garment price, the return rate increases by 0.4% (Dressipi data). Retailers need to be careful increasing prices as it might not lead to an increase in net revenue if return rates also increase. But even more important is to make sure that the garment they have bought is perfect for them and price is not the defining factor of whether they keep or return.
Dressipi’s core business focuses on helping fashion retailers increase their revenue whilst reducing their garment return rates. We are the only recommendation provider that builds return rate propensities into their algorithms which means that we typically see return rates drop by 10-15% when the same customer buys through Dressipi recommendations versus the normal customer journey.
4) Why there is no ‘one size fits all’ solution
There are a number of reasons why you cannot take a standard off-the-shelf approach to personalization if you want to provide the best possible experience for the customer and grow your profit:
- In fashion, we typically buy things to go with items we already own, and our tastes and preferences change based on our propensity to buy into trends and our lifestyle etc.
- Turnover of product is fast with much higher levels of newness every week and month with on average 33% of their catalog changing every month.
- There are some very specific problems that are unique to the actual business of fashion, namely high return rates and size fragmentation.
“Fashion is very dynamic, it’s not static like other categories. That’s why retailers need to take a more considered approach when it comes to really thinking about how they want those journeys to work within their own brand.” - Sarah McVittie
A quick recap
Personalization is now a necessity. Retailers need to think about the product discovery process that genuinely delivers for each and every customer.
“Do not sit back and do nothing. We have to call time on old-school fashion ecommerce experiences. Data-driven retailing is here and it’s here to stay.” - Sarah McVittie
Want to start making a step-change in personalization? Download our guide on redefining the discovery process.