If you check your phone right now, how many apps do you have for a loyalty program or retail store? We’re talking about everything from the Target and Kohl’s app to your favorite restaurant’s rewards app—who doesn’t want a free burger on their birthday?
Most big-name businesses and retailers have an app, and if they don’t, they’re most likely falling behind or missing out on important data. AdExchanger reported that retailers are “investing heavily in first-party data assets (aka their loyalty and membership programs) and in first-party data vehicles like retail media platforms.”
From a Twilio survey we learned that 77% of consumers become frustrated when they receive sale notifications or promotional texts that don’t interest them. Brands have a greater need now, more than ever, to shift toward the “next great advertising trend”—hyper-personalization.
Why Personalized Ads Perform Better
Many retailers are adapting to consumer behavior and gathering data of their own. Some examples include Macy’s Polaris plan, the EXPRESSway Forward plan, and Target’s 100-million-person loyalty program.
Last year, Target offered a regular mass discount in addition to a more personalized offer. They tested these two offers against each other and found that personalized offers converted 70%, while mass discounts saw a 40% conversion.
Macy’s has been delivering personalized discounts for a while—these ads help move specific inventory that needs to be cleared out as well as saves the company money on per-hour labor.
AdExchanger also talked about Best Buy, saying they could serve ads to customers instead of offering low-price promotions. They wrote, “If the campaign drives as many sales but to full-priced products, then the ad spend still improved the profit margin. An ad campaign that prompts online shoppers to store pickup rather than home delivery also saves the company money.”
Let’s Get Personal
Genius Monkey knows all about personalizing the user experience. In our recent blog, “Are You Treating Every Customer The Same?”, we share this: “If you use the same Login prompts or pop-ups for each user, you’re not customizing the experience. For example, when we worked with a large pet veterinarian group to boost their sales, we knew we could target pet owners even more. When they came to the veterinarian site, we could tailor their experience to what kind of pet they owned, what services they needed, and what location they lived in.
By making their experience customized, we better targeted the right customer and provided them a more memorable site visit. Because of this, the veterinarian group saw an increase in every area of their business.”
How Consumers Benefit from Personalization
Adweek shared an example of how personalization actually improves our lives. They talked about people traveling and waiting at airports. “In a hyper-personalized world,” they wrote, “an algorithm may have known the traveler was waiting at the airport. It would have consulted weather reports, traffic conditions and airline schedules. It could then provide suggestions: winter hats and umbrellas, ideal transportation options, restaurant and theater ideas, etc.. Because those things matter in the moment, a traveler is more likely to pay attention.”
This is just one example of how hyper-personalization can do a deep dive into the data and benefit consumers in almost every situation.
Adweek also highlighted how Netflix utilizes its recommendation engine, which has been huge for customer retention—80% of users follow recommendations, while 20% search for content. This shows that people are responsive to personalized recommendations or suggestions.
The moral of the story? Personalization of ads and user experience matters. And these retailers are proof of it.