Many factors contribute to a shopping experience. PwC found that almost 80% of consumers think speed, convenience, knowledgeable help, and friendly service are the most important components.
Retail personalization helps you achieve all four at scale, which is particularly helpful during high-traffic periods like Black Friday Cyber Monday (BFCM) and the holiday season.
Retail personalization has advanced significantly over the past few years. With sophisticated tools now widely available, businesses of all sizes can offer personalized shopping experiences to customers interacting with their products.
This guide shares how to implement effective personalization strategies with examples from retailers that have mastered their efforts, helping you prepare for BFCM, the holiday season, and year-round success.
Table of contents
What is retail personalization?
Retail personalization is a strategy that uses data you’ve collected on a customer to offer a personalized shopping experience tailored to them, both online and in store. This can include personalized product recommendations, discount codes, or marketing campaigns that promote items they’re most likely to buy.
What is poor retail personalization?
Retail personalization fails when customers are lumped together in a large segment.
For example, Customer A and Customer B might fit your buyer persona because they’re new parents shopping for sleep monitors. However, they’ve had different experiences with your brand thus far. One has already bought an item; the other hasn’t. It wouldn’t make sense to send both people a first-order discount even though they fit within the same customer segment.
Similarly, a pet store might have captured a customer’s email and create a customer profile, but without specific data about whether the customer owns a dog, cat, or bird, they can’t personalize their marketing content effectively. The brand can only send general messages to the customer, which can impact their reputation and sales.
Poor retail personalization strategies can also occur if the data you collect on your customers is inaccurate or outdated. You might think you’re reminding someone of a product they left in their online shopping cart, but your marketing software didn’t recognize that the same customer already visited your retail store to buy it in person.
How to improve retail personalization
Retail personalization isn’t just about knowing your customers’ names anymore. You have to create experiences that make them feel like VIPs every time they shop. It might sound like a tall order, but by following these steps, you’ll be ready to personalize any campaign:
- Collect adequate customer data
- Personalize the customer journey
- Recommend personalized products
- Try moments of customer delight
- Make retail personalization omnichannel
1. Collect adequate customer data
Personalization is most effective when tailoring marketing messages to customer behavior, purchase motivations, or pain points. The only way to uncover this at scale is by collecting customer data and creating customer profiles that capture a buyer’s behavior anywhere they shop with you.
You can group customer data into three buckets:
Zero-party data
Your target audience will volunteer this data through quizzes or feedback forms. It’s the best way to uncover what your target customers think.
First-party data
This is the data you’ve collected on owned channels like your ecommerce website, POS system, or social media accounts.
A powerful way to capture first-party data is through email capture at checkout, especially when combined with Shop Pay. This integration leverages Shopify's buyer network to create a frictionless checkout experience while providing retailers with valuable customer insights.
Shop Pay's ability to match credit cards to customer profiles gives you instant access to buyer information and purchase history for more effective personalization.
To further enhance your data collection, create custom fields attached to your customer profiles that allow you to capture and add to the customer information that matters most to your business. On Shopify, this customization is accomplished with customer metafields.
Customer metafields allow you to store additional information about a customer in a structured way. Metafields can support a variety of formats from open text fields and date selectors to true/false statements and drop-downs. This gives businesses the ability to capture information such as birthday, loyalty program status, personal preferences, or any other relevant data specific to your business needs.
Use this first-party data to determine which messages customers respond best to and personalize their shopping experience.
Third-party data
You can acquire this data through third-party platforms or online data aggregators. It’s considered the least effective way to source data because it tends to be grouped by a particular customer segment rather than an individual.
2. Personalize the customer journey
All three data sources are required to paint the bigger picture and build a unique profile for each customer. You can then enroll them in automated campaigns that personalize the customer journey from start to finish.
Here’s what that might look like for a customer based on the actions they display:
- Visit the “sofa” category on your online store → display a pop-up with an image of your bestsellers and a 10% discount code to redeem on their next sofa.
- Add a product to their online cart → send a cart recovery email 2 hours after their exited website session that explains your in-store pickup options.
- Clicks a link to view your Denver store details → uses proximity marketing to send an SMS that says they’re only 10 minutes away when you detect they’re nearby.
- Visits your store → have retail staff remind them of their unique discount code sent via email when they opted in.
3. Recommend personalized products
Data is a powerful tool in retail. The information you’ve collected on your customers can guide you in making informed product recommendations. Use it to suggest products a shopper will most likely buy based on their past interactions with your business.
Say your POS data shows that a potential customer enquired online about a sofa set but didn’t purchase it because the delivery estimate was too long. They’re moving into a new place and hoped to have it delivered on the same day they collect the keys.
A fast turnaround is a clear motivator for the customer, so the next time they visit your retail store, you can prioritize furniture with fast delivery times—even taking payment for their order in-store and shipping the item directly to their home. This would prevent the additional processing time that a delivery to the store would require.
4. Try moments of customer delight
Customer delight happens when a recipient is pleasantly surprised by their shopping experience. These personalized experiences are memorable because they’re unexpected. The customer is satisfied because they feel like you’ve truly listened to their concerts or motivations.
For example, you could send handwritten notes to customers who’ve purchased a product related to their pain points in-store. A student who bought a new study planner could receive one that says, “We hope this helps you prepare for your next semester!”
Another example would be offering an exclusive customer loyalty reward to regular customers. Your POS system could flag whenever someone’s shopping for their first anniversary and prompt your retail sales team to offer a $10 gift card with a “happy anniversary!” banner the next time they visit.
5. Make retail personalization omnichannel
Omnichannel personalization means that customers get the same seamless experience regardless of the technology or sales channels they use.
Examples of this in practice include:
- Allowing shoppers to spend online-accumulated customer loyalty points on an in-store purchase
- Using in-store order data to personalize the online shopping experience, like showing products related to their initial purchase in social media ads
- Offering alternative fulfillment methods such as buy online, pickup in-store (BOPIS), and buy online ship to store (BOSS) not only boosts checkout conversions by offering more flexible delivery options, but can also drive additional in-store sales.
You’ll need to make sure that your platforms speak to each other to make this possible. Shopify, for example, helps you overcome the personalization gap by connecting 8,000+ apps to offer a central repository for all the historical data you’ve collected.
But it doesn't stop there. Shopify's true power lies in its ability to seamlessly connect all your sales channels—from your online store to social media, marketplaces, and even physical locations.
With this interconnected approach, you can see everything your customers are doing and craft a convenient and personalized experience for them at every touchpoint.
Best retail personalization examples
These innovative sellers showcase top-tier personalization strategies in action:
- Cozmo
- Vadham
- Skin Inc
Cozmo
Cozmo is a furniture brand that personalizes its Black Friday and Cyber Monday marketing campaigns. Instead of sending the same blanket discount code to every subscriber it’d accumulated, Cozmo handpicked its “VIPs”—likely people who’d spent the most money with the brand—and offered early access to its biggest sale of the year.
This retail personalization strategy is effective because it rewards loyal customers. These people account for 44% of the average brand’s annual revenue despite only accounting for 21% of its customer base, so it makes sense to offer them better incentives.
Vahdam
Valdham is a health and wellness brand that ships products from India to 130 countries worldwide.
With so many customers to personalize the shopping experience for, it turned to Shopify and third-party apps—including Klaviyo for segmentation and Attentive for SMS marketing—to personalize retail experiences at scale. That meant:
- Creating customized product launch pages for customers in each country
- Adding product upsells at checkout related to what a shopper has in their cart
- Offering gifts to improve conversion and average order value
This approach proved profitable for the brand. Valdham has tripled its direct-to-consumer revenue and experienced a 25% increase in on-page and checkout conversion.
Skin Inc
Skin Inc ’s entire business model is based on personalization. It offers custom-formulated skincare products designed to address each customer’s skin concern.
Shoppers can browse the skincare products they want on its online store. Once they’ve found one they like, Skin Inc prompts them to conduct a small quiz that asks:
- Their age
- Whether they’re pregnant or breastfeeding
- How their skin reacts to the sun
- Their biggest skin frustrations (dark spots, large pores, etc.)
- Whether they smoke
- If they often feel stressed
- Whether their diet is balanced
- How often they travel
Skin Inc uses a customer’s answers to create a customized version of the product they’ve selected. Even if the customer didn’t buy the product immediately, the process wasn’t a waste.
The brand now has a ton of data to personalize future retail experiences—like tips on reducing stress (coincidentally with a tip on creating an evening skincare routine using the brand’s products) if they answer “yes” to the stress question.
BFCM and personalization
Black Friday Cyber Monday is the busiest shopping season of the calendar year. Last year, Shopify merchants processed over $9.3 billion in online sales. At its peak, that meant $4.2 million in sales per minute.
Discounting is the most popular way to sell to these holiday buyers. The shopping season comes with an expectation that our email inboxes will be overloaded with better-than-ever deals, but personalization can help your brand differentiate when blanket discount codes no longer suffice.
Consider segmenting your audience into categories like:
- Deal hunters
- Last-minute shoppers
- VIPs
- Window shoppers
- Impulse buyers
Each segment should receive a personalized offer rather than a generic sitewide discount that’s available to everyone. For example, deal-hunters could receive your most generous discount, whereas last-minute shoppers receive coupons to redeem on expedited shipping.
Personalization throughout the holiday season doesn’t just immediately affect sales. The positive retail experience you’ve offered is memorable. That, combined with a love for the product when their first order arrives, helps you turn one-time seasonal shoppers into repeat customers.
Find the right balance for retail personalization
Retail personalization can be a powerful lever to attract and acquire customers, but only if you find the right balance. More than nine in 10 customers are concerned about the security of their private information. Another 46% say that time-based promotions, a form of hyper-personalization, can come across as “creepy.”
The best strategy is to start small and gradually increase once potential customers become comfortable sharing their data with you. Die-hard customers are likely more grateful to receive personalized campaigns from their favorite brand than someone who’s just visited your store for the first time.
Retail personalization FAQ
What is retail personalization?
Retail personalization means providing potential customers with a unique experience when visiting your store. It uses data you've already collected on the customer to recommend personalized products, send targeted email campaigns, or offer unique discount codes that entice them to buy.
How do you personalize the retail experience?
Personalized recommendations are the simplest way to personalize the retail experience. If someone downloaded your lead magnet on how to design a small bedroom, for example, you could show them smaller-sized furniture items most likely to fit in their home.
What is in-store personalization?
In-store personalization is a strategy retail brands use to make each customer's shopping experience unique. It uses data from marketing campaigns and sales channels to analyze what customers are most likely to be interested in.
What is the value of personalization in retail?
Retail personalization can dramatically improve the shopping experience for potential customers, which increases their likelihood of buying and becoming loyal customers.
