Personalization has been a focal point of eCommerce for the better part of the last decade. It has its roots in traditional brick-and-mortar stores. Before the rise of eCommerce, a shopper like Sally would walk into a store and choose a couple outfits to try on. While she was in the dressing room, the sales associate would bring her a few other things she might like based on her previous choices. Now that you can purchase nearly everything online, personalization is everywhere. Think about the products that pop up on the home screen when Sally goes to Amazon, or when she views a specific pair of shoes on Nordstrom’s website and is shown several similar styles. All of these recommendations are based on data merchants are gathering about her preferences. It’s time to take this rich personalization data and apply it to the shipping and delivery process.
So why is now the right time to start applying personalization to shipping and delivery? Personalization data has been sliced and diced in myriad ways, and what we know is this: personalization drives higher revenues for merchants. According to Todd Scholl, Director of Marketing at Certona, 13% of the total revenue of Certona’s retail customers came from recommendations. Personalized emails produced 6 times the revenue of generic emails, as reported by the 2013 Email Marketing Study by Experian Marketing Services. Consumers like Sally are also aware of their behavior, with 86% of them citing personalization as a factor in their purchase decisions.
In addition to higher revenues, personalization has another unintended consequence: customers like Sally have come to expect it. Andrew Robbins, President of Paytronix, says “Customers are beginning to expect the messages. If you don’t speak to them in a relevant fashion, they can tell and they start to ignore you.” The available data confirm his statement – Infosys recently reported that 78% of consumer survey respondents are more likely to make repeat purchases with a retailer that provides them with personalized offers. Consumers not only want personalization, 86% of them are willing to pay for it to the tune of a 25% price increase, according to RightNow’s Customer Impact Report.
Even though personalization hasn’t made it there yet, expectations of consumers like Sally are already spilling over to the shipping and delivery process. 43% of respondents expect their delivery experience to be personalized based on their purchase history. Over ⅓ of respondents expect a better customer experience if they pay for shipping, have shopped with the retailer before, or are a member of a loyalty program.
Sally likes her personalized experience. She enjoys perusing recommended products while shopping at West Elm’s online store, and she loves the personalized emails she gets from Wayfair with recommended home decor items. She often makes purchases based on these recommendations, and wishes for that same personal touch in the post-purchase experience. What can retailers do to make Sally’s expectations a reality?
The first step for retailers is to take existing customer data and look at it with a new lens. How can retailers personalize the post-purchase experience based on data they already have, and what new types of data can they begin to collect that will take steps towards the personalization of shipping? Key inputs like frequency of purchase, average purchase amount, types of products purchased, shipment locations, return rate, and loyalty program subscriptions can all contribute to shipping personalization. One easy way to personalize shipping is to allow customers to interact with the retailer in their chosen fashion. Sally is a busy mom who is rarely at a computer. She prefers to receive all her shipment updates via text message, so she knows exactly when the couch she ordered will arrive and can make sure to be home. Other types of users might prefer the convenience of email notifications or access to an online portal for shipping updates.
Let’s use Sally to illustrate some additional ways shipping and delivery can be personalized. Sally ordered a train table from “ToyShop” for her son’s upcoming birthday party. As part of the checkout experience, Sally has several delivery options based on her preferences. She can choose to have the train table delivered from a distribution center, which means a lower shipping cost and a longer delivery time. Since Sally has a deadline for her delivery (the birthday party), she chooses her other option – delivery straight from the store, which costs a bit more and will arrive more quickly. She can also choose the type of delivery she wants – drop at the door (threshold delivery), or white glove delivery that includes set up of her train table. Sally has enough to do to get ready for the birthday party, so she chooses white glove delivery to insure the train table arrives and is put together in time for the party. Sally is also able to choose a delivery appointment time, so she can make sure the train table is delivered and put together while her son is at school and will be surprised when he returns home.
After selecting her shipping preferences at checkout, there are additional ways to personalize Sally’s shipping experience. ToyShop doesn’t know about Sally’s son’s birthday party, but they do know that Sally splits her shipments 50/50 between her home and her husband’s office. ToyShop notices that they can deliver Sally’s shipment to her husband’s office several days earlier than it would reach her home. Sally receives a text message from ToyShop, asking if she would like to change the shipment location and receive her package earlier. Sally decides to forgo the white glove experience in lieu of receiving the train table earlier. She types “YES” and replies, and she is instantly ready for her son’s birthday party a few days ahead of time.
Let’s turn this interaction around – maybe despite all the retailer’s efforts, Sally has a problem with her train table delivery that results in a phone call to customer service. Sally calls and reaches a live customer service representative (CSR) who has access to Sally’s customer history. The CSR can see Sally’s average purchase amount and purchase frequency and is able to send a new shipment with Sally’s train table with free two-day shipping, so it will still arrive before the birthday party.
These are the types of personalization interactions that drive customer retention. We know it’s true from the data on personalization in the purchase funnel. All retailers need to do is extend their personalization efforts to the shipping and delivery process.
In our next post of the series, we’ll discuss the need to be proactive in the post-purchase experience with each customer.