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  • Writer's pictureKatie Tame

Invest a Little, Receive a Lot: The Importance and Value of Investing in Clienteling and Hyper-personalization in 2024

Staying competitive requires an astute understanding of emerging trends, consumer behavior, and the strategic deployment of technology. As we navigate through 2024, the imperative for retail brands to connect with consumers across multiple channels and offer the personalized shopping experiences they crave has never been more pronounced. Adapting to shifting customer expectations and market dynamics demands the use of data and technology, and the emphasis on hyper-personalization, both online and in physical interactions, has become crucial. This approach not only enhances client engagement, but ensures each relationship is context driven and exclusive to the shopper. The integration of Artificial Intelligence (AI) and other technological solutions into retail operations is not just a trend but becoming necessary to facilitate these personalized experiences and operational efficiencies that modern consumers demand.


Clienteling strategies empower sales teams to fine-tune their messaging across preferred channels, while also recognizing instances when outreach might not be appropriate. Today's consumers expect to be acknowledged as unique individuals, hoping to engage with brands that not only recognize their individual circumstances but also show a genuine understanding and empathy towards their needs.

By adopting hyper-personalization into their retail strategy, underpinned by data insights and a personal touch, sales teams can gain the insights and flexibility needed to align with their customers' evolving preferences dynamically. Adopting a digital-first attitude, employing clienteling technologies for deeper, genuine customer engagement, and harnessing these tools for data-driven insights pose substantial gain for sales teams. The culmination of these efforts is a sophisticated, data-oriented clienteling strategy that offers hyper-personalized experiences.


What Is hyper-personalization?


Hyper-personalization involves crafting personalized and precisely targeted experiences by leveraging data, analytics, and automation technologies. Hyper-personalization enables brands to deliver exceptionally relevant messages to specific customers, ensuring communications are timely, accurately placed, and transmitted via the most effective channels. In an increasingly competitive retail landscape, adopting a hyper-personalized sales strategy empowers sales teams to engage with customers on a more significant level, strengthening existing connections and building new ones, ultimately enhancing the overall customer journey. The implementation of such strategies not only boosts customer satisfaction but also fosters brand loyalty, increases spending, and drives business growth. As Allison Zeller states, “providing a personalized experience is one of the top three ways companies can encourage customer loyalty”.


What is hyper-personalization in clienteling?

Whilst segmentation categorizes customers into groups with common preferences, behaviors, and characteristics, hyper-personalization goes into the finer, individual distinctions for targeted customer engagement. Whilst segmentation has been a staple in organizational sales tactics, it falls short of attaining a deeper, more individualized level of personalization. Indeed, 90% of retailers maintain that hyper-personalization is essential for growth in today’s retail landscape. This innovative form of customization aligns with the concept of "hyper-relevance" in the digital age. It involves harnessing data, AI machine learning, and predictive analytics to gain insights into the individual behaviors of your audience, thereby enabling more targeted and relevant interactions.


AI and Retail


Artificial Intelligence (AI) is revolutionizing retail, from enhancing customer experiences with personalized product recommendations to improving operational efficiency. Hyper-personalization entails leveraging AI alongside real-time customer data to tailor content, products, services, and information to the unique preferences of each individual user or customer. According to IDC, the retail sector ranks second among all industries in AI technology spending, with search volume for "AI in retail" having grown nearly 600% since 2020. A recent study highlighted the tangible benefits of this investment, revealing that "retailers using AI/ML solutions saw sales grow by 2.3x and profits grow 2.5x that year compared with their competitors who had not adopted the technology" and projected a "similar performance for 2024 with a 2.4x growth in sales and 2.6x growth in profits compared to retailers that are not using AI/ML."


Clienteling technologies enable hyper-personalization, achieving superior outcomes by customizing communication initiatives to each individual customer based on specific data collected about them. This could involve sharing personalized product suggestions or exclusive offers informed by detailed customer data, such as sales metrics or their direct interactions with your brand. Adopting an AI driven and  omnichannel strategy allows for the precise targeting of individuals with critical messages and offers via the most suitable channels. Such a strategy not only improves customer satisfaction but also bolsters brand loyalty, increases opportunities to purchase, and enhances overall brand success.


The personal touch of AI-driven recommendations plays a pivotal role in customer loyalty, with "65% of customers saying they’ll remain loyal to a retailer that offers a more personalized experience and 33% expressing frustration over irrelevant product recommendations." This aligns with Deloitte's finding that providing a personalized experience ranks among the top three ways companies can encourage customer loyalty, with "half of retail executives planning to prioritize this strategy in 2024." Alison Zeller agrees, writing “many retailers are turning to AI/ML solutions to improve the speed and agility of their strategies”.


Data and Privacy


In the past, gathering customer data was a challenge, often limited to disjointed systems, call centers, and point-of-sale interactions. Now, the rise of digital technology, alongside advancements in data processing, empowers organizations to merge their own data with that from external sources. This marrying of these two factors creates comprehensive customer profiles, enriching understanding of consumer preferences and behaviors. The vast availability of customer data equips sales teams with the foresight into consumer needs and preferences, even before they actively engage in the marketplace. Utilizing this data, brands can tailor their outreach, ensuring higher engagement and conversion rates through strategic offer customization, including pricing and product bundling.


Through clienteling technology, retailers can navigate through this extensive data in real time, guiding them towards the most insightful customer interactions. To thrive in the market, retailers must harness data and technology to enhance outcomes and deliver hyper-personalized experiences. By embracing a hyper-personalized retail strategy that integrates data, advanced analytics, and clienteling technology across all customer touchpoints, organizations can unlock new depths of industry-specific insights and drive actionable outcomes.


As retailers strive to offer more personalized experiences, they must navigate the delicate balance between personalization and privacy concerns. "90% of retailers say hyper-personalization is a must-have capability," yet consumer apprehension about data privacy remains high. Retailers must employ AI and clienteling technologies judiciously, ensuring that personalized marketing efforts enhance the customer experience without infringing on privacy.


data privacy with hyper-personalization and clienteling

Competition and Personalization


In an increasingly saturated market, brands are ramping up their investments to capture customer attention. Within this intensely competitive environment, clienteling emerges as a key strategy to create lasting impressions with the limited interactions customers may have with a brand. This approach enables brands to establish deeper connections and stand out in the marketplace.


Many retailers are lagging behind in delivering the personalized experiences customers expect, often due to a lack of clear understanding of personalization's definition and the necessary capabilities. Sales teams who embrace hyper-personalization as part of their strategy are making strides, indicating that the journey toward effective clienteling is ongoing. Despite the potential, most retailers are still in early stages of personalization maturity, facing challenges such as poor data management and organizational silos. However, leading retailers demonstrate the significant rewards of advanced personalization, with best-in-class companies achieving substantial revenue lifts. To progress, retailers need to invest intelligently in personalization capabilities, break down organizational silos, and monitor the customer experience in real-time. Ultimately, achieving a highly personalized and connected shopping experience is essential for retailers to remain competitive in the evolving retail landscape.


Experiential Retail


Creating memorable shopping experiences is a powerful strategy for cultivating customer loyalty. Experiential retail, which transforms shopping into an entertaining and engaging activity, is gaining traction. Aldo's innovative Pillow Walk popup in New York is a prime example, offering customers a multisensory experience that extends beyond transactions. Such initiatives underscore the evolving expectations of consumers, with more than "half of consumers saying they’ll return to a brand that offers a positive shopping experience online or in-store.", as Zeller comments.


Sales teams need to understand that delivering an exceptional customer experience isn't just expected; it's adding a vital edge in today's competitive market. Offering a standout experience is essential for attracting new customers and keeping the current ones, thereby sustaining, or growing their market share in the densely populated marketplace.


Social Commerce


In the race to capture consumer attention, brands must seek efficient ways to engage customers and present offers that are most likely to lead to conversions. By leveraging data collected throughout the customer journey and augmenting it with external insights, retailers can proactively engage consumers, anticipating their desires before they even consider a competitor. Hyper-personalization allows for customization at every stage of the customer journey, from enticing potential customers with tailored webpages and adaptive pricing to offering bespoke services post-purchase. This strategy moves beyond the broad reach of mass media, which relies on assumptions about viewer demographics and preferences. Instead, hyper-personalized marketing employs sophisticated data analysis on the same platforms to display highly specific offers tailored to the individual currently viewing them.


Social commerce is redefining how consumers discover and purchase products. With global social commerce revenue nearing "$1 trillion in 2023" and expected to grow exponentially, the importance of platforms like TikTok, Instagram, and Facebook in the retail sector is undeniable. Indeed, social commerce revenue could total more than $6 trillion by 2030. Zeller underlines that whilst “the number of social media buyers is predicted to grow slowly, but the sales per buyer is set to increase dramatically in the coming years”.


Brick-and-Mortar Retail


Despite the rise of e-commerce, physical retail stores remain relevant, particularly among younger generations like Gen Z, who "are more likely to shop at a brick-and-mortar store than online." Indeed, the Pew Research Center held a study examining consumer demographics, and found 57% of adults prefer buying in-person versus online.This continued preference for in-store shopping highlights the importance of offering engaging, physical retail experiences as part of a holistic retail strategy. Retailers like JCPenney and dollar stores are adapting to this reality, investing in store modernizations and expansions to attract and retain customers. McKinsey reports that personalization in retail can half customer acquisition costs and boost revenue by as much as 15%, outlining the importance of establishing a strong clienteling strategy for your brand and sales teams, whether in person or online.


Advantages of hyper-personalization


The era of broad, generic sales strategies aimed at engaging a diverse customer base is fading, replaced by an expectation for direct, meaningful connections with brands, facilitated with technology that personalizes every interaction. Hyper-personalization emerges as a strategic response, enabling organizations to pierce through the clutter, align with consumer preferences, aid in their decision-making process, and cultivate lasting relationships that deter them from turning to competitors.


Advantages of hyper-personalization and clienteling

By delivering hyper-personalized experiences to customers, businesses can realize the following benefits:

 

  • Increased Revenue: Hyper-personalization significantly correlates with sales, as customers are more inclined to engage with companies offering personalized experiences.

  • Data Quality: Effective hyper-personalization relies on accurate, comprehensive data. By prioritizing data quality, organization, and accessibility, brands can enhance data integrity and cohesion across various channels.

  • Streamlined customer journeys and experiences: Tailoring offerings and content to individual preferences reduces the time and effort customers expend on sorting through irrelevant information. This demonstrates value to customers as individuals, fostering better retention and positive word-of-mouth marketing.

  • Communication: Unlike traditional sales tactics, hyper-personalization strategies tailor messaging to individual recipients, optimizing channel selection and timing for maximum resonance and engagement.

  • Conversations: Hyper-personalization empowers teams to engage with customers on a personal level, adding a human touch to every interaction. For instance, utilizing technology to access a customer's purchase history, browsing activity, and past inquiries during live chat interactions allows sales associates to tailor responses to the customer's specific needs, thereby offering truly personalized customer service.


Upon entering the digital or physical retail space, personalization ensures that the shopping experience is uniquely catered to the individual. From virtual shopping assistants to customized product options, retail is transformed from a mere destination into an immersive brand experience, further amplified by omnichannel strategies. Clienteling technology enables sales teams to blend their online and in-store experiences seamlessly, using mobile devices for personalized product recommendations and navigating the retail environment more efficiently. This modern take on traditional sales methods underscores the transition to a digital-centric approach.


BSPK recognizes that the essence of forging meaningful consumer connections remains unchanged; however, the implementation of hyper-personalized clienteling strategies is becoming indispensable. Leveraging data, analytics, and new technologies, brands can develop hyper-personalized approaches that resonate deeply with consumers, strengthening bonds and ensuring competitive advantage in an evolving marketplace. Embracing hyper-personalization is not just beneficial—it's necessary for success in today's retail environment.

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