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In the Battle Against Amazon, it Pays to Personalize

For brands attempting to score in the age of digital commerce, personalization pays off—and the proof is in the data.

According to marketing automation firm Sailthru, which released its third annual Retail Personalization Index on Tuesday, brands that offer multi-channel personalization benefit from higher consumer satisfaction, and are more likely to report a higher repeat purchase rate.

The report culls data collected from 1,500 consumer surveys, ranking the best 100 brands of 2019. The results showed that successful brands find ways to engage shoppers “on mobile and email, not just on site and in store,” Jason Grunberg, vice president of marketing at Sailthru, said.

The majority of the Index’s top 25 brands employed personalized recommendations on-site (88 percent) and in emails (96 percent). And 84 percent of the top 25 brands use push notifications on mobile.

Beauty retailer Sephora ranked first in the Retail Personalization Index for the third year running, scoring well on mobile and email channels, and with its popular Beauty Insider program. Nordstrom came in second place, having improved its mobile score from last year with location-based services for in-store shoppers.

Rent The Runway placed third, jumping 23 spots on the index from last year due to its improved social media channels and thorough customer profile settings. Off-price retailer DSW took the No. 5 place for its implementation of a personalization quiz for shoppers and well-timed push notifications on mobile.

Luxury resale website The RealReal moved up one spot from last year to No. 14 on the Index, with its high-quality editorial content and personalized pages for each shopper who visits the site.

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Walmart took a steep fall to No. 25 on the Index from third on last year’s list. The retailer garnered strong positive feedback on its website but average reviews of its other channels. The company’s recent investments in AI, however, could put it back in contention for a top 10 spot next year.

Amazon ranked 56th, with strong support for its website but lackluster enthusiasm for its unpersonalized mobile and email strategy.

Embattled luxury retailer Barney’s ranked 84th on the list, receiving credit for its omnichannel approach, which includes personalized push notifications, a blog, and a strong integration of mobile and in-store experience. Athletic brand Under Armour came in at No. 89, lauded for a quiz querying shoppers’ favorite activities, celebrity role models and more.

Taking the No. 99 spot for being the most size-inclusive retailer for women, Universal Standard now offers clothing ranging from sizes 00-40. A “See It In Your Size” feature allows shoppers to view pieces on models who wear their same size.

While most retail marketers understand the importance of employing some form of personalization, few are using the advanced methods needed to thoroughly penetrate their audiences, according to Liveclicker, a B2C email marketing firm.

The group’s latest report, released Monday, showed that 90 percent of the 147 retail marketing professionals surveyed have tapped into personalization methods—though many of them are using just the most basic tools instead of deploying data-based tactics.

Those who are investing in advanced technologies, though, stand to reap upwards of $20 in revenue for every dollar spent. Retailers employing advanced methods—which rely on “math-based personalization” that measures click behavior and inventory data—earn 17 percent more revenue than peers using basic methods.

Liveclicker’s report revealed potential roadblocks for those brands that haven’t yet adopted more advanced personalization tactics. More than a quarter (26 percent) admitted to having concerns about having the right IT infrastructure, and an equal number expressed misgivings about potential privacy issues.

Still, advances in personalization may be the best hope for digitally native brands hoping to compete with Amazon. More than half (52 percent) of the marketing professionals surveyed said that providing a more relevant, enriching customer experience was their dominant strategy in differentiating their companies from Amazon.

“Great personalization is often invisible to the consumer. If a brand gets advanced personalization right, it serves to make messages more compelling, images more relevant, and shopping more intuitive,” said Kenna Hilburn, VP of account development and partnerships at Liveclicker.

“This research proves that those efforts drive customer sales and brand differentiation, even if they can go undetected when they work best.”