How important is Hyper-Personalization in Fashion Retailing?

Written by InsightsNow

December 28, 2022


Hi. Welcome to Expert Talks at InsightsNow. A recent article by Mackenzie mentions that 71% of customers expect a hyper-personalization interaction with their retailers and if done well, the retailers can see a ten to 15% sales uplift.

Areas in which Hyper-Personalization is used

So retailers are today trying hyper-personalization communication, product recommendations, and shopping experience, to name a few. From a communication perspective, retailers leverage the past purchase data of customers, their browsing history, their preferred medium of engagement, and personal milestones like birthdays and wedding anniversaries to create an individualized communication plan and if done well, the engagement rate for such customers tends to go up by 50% to 100%.

Equally omni retailers are trying to provide a connected experience to their customers by ensuring that the content and recommendations that they make on outbound campaigns, over email, app push, WhatsApp, etcetera, are in sync with the content and recommendations that are displayed to that customer when she initiates the interaction with the retailer’s digital property, for example, eCommerce, app, website, et cetera. So this connected experience generally leads to a higher omnichannel penetration for the retailer.

The second area where retailers are providing hyper-personalization is in the area of product recommendations. Again, based on a particular customer’s previous purchase history, the products that are there in her wish list, the earlier size fits, and the brand she has bought. Retailers are able to create product affiliates for each customer. They then overlay it with the available range that is there in the store or on the eCommerce side and then showcase the products which are a union of the customer’s choices as well as what is available. And this generally again tends to increase e-commerce and app conversion by around 10 to 15 percent.

Another area is where visual AI and computer vision platforms are used to scan millions of global fashion shoots and create a combination of multiple ensembles so that when a particular customer has to buy a top, the system is able to use the backend AI to recommend the right bottom footwear, accessories, etc. That would go well with that particular top for various occasions. Again, customers are able to see value in this and they tend to increase their quantities and categories shop if they get great recommendations.

The third area where hyper-personalization is being used is in the area of the shopping experience. So Sephora’s Virtual Makeup is a great example where customers could engage with the makeup mirror and use multiple combinations of beauty products and then choose the one that they best like. Rebecca Minkoff’s Smart dressing Room is another example where a customer’s body contours and size are generated and then she can try multiple dresses the system would recommend what best fits her and then the customer can make a choice.

So, as you will see that various areas of hyper-personalization are being used to give great customer connections and experience. And businesses that are able to do this in a seamless fashion not only create an increase in sales but create a great customer experience and customer advocacy. So I hope you found this interesting. Please do follow us on InsightsNOW. Thank you.

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