How Personalization Drives Profitability

March 12, 2021

Delve Goes Deeper: Retail Marketing

Learn how data-driven optimization helps retailers accelerate market share gains in their most profitable segments.

This is the second post in our Retail Marketing series, dedicated to helping brands improve their marketing ROI and accelerate revenue growth by identifying and converting their most profitable audience segments.

Retail leaders understand that marketing efficiency is all about aligning the right message, in the right medium, at the right time, to the right audience to maximize conversion. Doing it well means having a deep understanding of audience segments (both prospects and customers) so that the appropriate message, medium and timing can be orchestrated. Simply put, when it comes to digital media, industry leaders “buy smart, not more” by hypertargeting high-value, high-conversion potential audiences. They also realize that consumers want purchase experiences—and that includes personalized offers that speak to their lifestyle, life stage, and/or aspirations.

By deepening customer understanding and orchestrating the right message and right medium at the right time, retail marketers eliminate budget waste from their media campaigns and broader marketing investments.

What Retail Leaders Do Differently

The payoff of personalizing the right offer at the right time can be significant and measurable. McKinsey & Company notes that “Today’s personalization leaders have found proven ways to drive 5 to 15 percent increases in revenue and 10 to 30 percent increases in marketing-spend efficiency.”

While this can sound daunting for retail marketing teams that are struggling to assimilate their data and apply analytics, it doesn’t have to be. In fact, McKinsey & Company notes that “Marketers often view personalization at scale as a daunting undertaking, requiring millions in IT investments. But successful players often start small, generate top-line impact quickly—in a matter of weeks, often—and self-fund the initiative after that.”

Mapping first-party omnichannel data to build customer journeys is a core discipline for retail leaders. According to McKinsey, “during the [COVID] shutdown between 12 and 21 percent of survey respondents said they switched to brands that sent them relevant messages or promotions in their preferred channel.”

Clearly, given today’s unpredictable consumer demand patterns, retail marketers must focus on campaign efficiency. By taking a continuous, data-driven approach to identifying and converting their ideal consumer segments, marketers are well-positioned to improve conversion and lifetime customer value. In our next article in this series, we’ll look at the tactics marketers can employ to drive greater personalization.


Ready to take your ads, and your business, to the next level? Get in touch with the DELVE team today.

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