Advanced Personalization Helps Top Retailers Make More Money and Hold off Amazon

Today’s retail and e-commerce email marketers face a twin set of challenges as they head into the holiday shopping season and beyond: making more money through email and competing against Amazon for the minds and wallets of their customer base.

Now, new research shows how they can fight both battles with the same weapon: advanced personalization, which can help their messages stand out from their inbox competition and make them the go-to brand for their customers.

Email marketers stand to gain at least two big advantages when they move from basic to advanced personalization:

1. Advanced Personalization = Higher Email Return

A new report from The Relevancy Group (TRG), shows that retailers who use sophisticated personalization tactics that draw on deep dives into customer data are better able to compete on Amazon and in the general marketplace.

In The Value of Personalization Optimization for Retailers, TRG found retailers who use real-time data and other advanced personalization, such as offers based on inventory, location, even weather forecasts, earn 17% more on average than programs that rely on basic tactics such as first-name personalization.

Personalization levels: TRG groups personalization into three categories: basic, purchase-based and advanced. Each one uses data to create a unique experience for each customer email, but they use different levels of data for different purposes:

• Basic personalization uses first-name and subject-line personalization to stand out in the inbox and create a personal, letter-like feeling in the message body.
• Purchase-based personalization uses purchase data to personalize subject lines and generate dynamic content within an email to persuade customers to buy again.
• Advanced personalization incorporates data based on click behavior, inventory level and real-time data to automate dynamic email content and create a 1:1 email experience.

Revenue results: TRG’s report found both purchase-based and advance personalization earned more monthly revenue than basic personalization. However, each of the three advanced tactics earned more than purchase-based tactics. (The full report lists the exact numbers, both as percentage gains and monthly revenue totals in dollars.)

Top Retailers Use Advanced Personalization to Compete Against Amazon

This challenge has taken on new urgency now that Amazon has been accused of changing its search algorithm to highlight its own brands over competitors in search results. Although Amazon refutes the claims, it’s still the retail behemoth that scooped up almost 50 cents of every online dollar spent on holiday shopping in 2018 according to TRG and has the reach and budget of a formidable competitor.

Retail and e-commerce email marketers can still compete successfully against Amazon when they combine advanced personalization with other tactics to create a customer experience that Amazon can’t match.

These two approaches help brands differentiate themselves from their competition, both in a crowded inbox and on Amazon. That’s because they offer a unique and personalized approach using data that shows the brand knows each customer individually, provides helpful information and reduces friction and frustrations.

Overcoming Challenges to Personalization, Plus Next Steps

“Lack of budget” is one reason why marketers don’t investigate advanced personalization. But retailers who use advanced personalization successfully can earn $20 back or more for every $1 they invest in these tactics, the report says. That’s on top of the $32 to $44 return on their email investments they’re already earning.

Marketers are more concerned about IT support and platform security, but that shouldn’t hold marketers back. Many personalization platforms are easy to manage and have robust security protocols to hold off hacking and other unauthorized access to company data, TRG says.

Budget concerns aside, marketers who want to move into higher levels of personalization should take two steps:

• Look for technology vendors that can integrate their platforms easily with the marketer’s own inventory and CRM systems.
• Seek vendors who already have partnerships with leading ESPs and Email Marketing agencies.

Today’s personalization technology can be deployed quickly and easily to drive greater returns and compete more successfully against Amazon and other big-budget brands. The technology is more secure and accessible than ever, and marketers can see results quickly using the KPIs that are most important to them. What’s holding you back?

Read more: The ROI of Upgraded Personalization