Imagine walking into a store that feels like it was designed just for you. Shelves stocked with your favourite brands, displays showcasing items you've been eyeing-off online, and helpful staff who seem to anticipate your every need. That’s hyper-personalisation, and for those working in the retail sector, it’s a game changer that brings with it significant reward.

What is hyper-personalisation?
At its root, hyper-personalisation is about understanding your customers via their purchase histories and online behaviour. It uses artificial intelligence and machine learning to go beyond customer segmentation. It’s about collecting a ‘golden record’ of what your customer likes and how they spend their money.

For a long time, loyalty programs have helped retailers collect this information. But now, with the advent of AI, this information can more deliberately be mined and analysed so that promotions and advertising appeal more strongly to the individual. For example, a supermarket chain using hyper-personalisation would know the bulk items that a shopper is likely to purchase on a 6-8 weekly cycle and would advertise to them accordingly. Likewise, they know the brands an individual is more likely to buy in a two-for-one deal.

By understanding the customer’s interests and motivations, retailers can achieve higher returns and are more likely to get a bigger piece of the customer’s pie.

Benefits of hyper-personalisation
Retail operations managers understand the importance of customer satisfaction and loyalty. Hyper-personalisation is a game-changer in this area, offering a multitude of benefits that can directly impact a retailer’s bottom line:

Increased sales and conversion rates: Personalised recommendations guide customers towards products they are more likely to buy, leading to higher conversion rates and increased sales. It accelerates results.

Enhanced customer experience: People crave a sense of connection. Hyper-personalisation fosters loyalty by making shoppers feel valued and understood. Imagine a customer receiving in-store notifications about products on their wishlist, or loyalty points redeemable on their favourite brands.

Boost customer lifetime value: By understanding individual preferences, retailers can tailor promotions and loyalty programs, encouraging repeat business and increasing customer lifetime value.

Improved inventory management: Hyper-personalisation insights can help predict customer demand for specific products. This allows retailers to optimise inventory levels, reducing periods of empty shelves and overstocking.

Data-driven decision-making: Hyper-personalisation generates a wealth of customer data. Retailers can leverage this data to refine marketing strategies, optimise store layouts, and personalise future promotions.

Significant growth for sporting event
When organisers of a major sporting event in Australia came to Avanade in 2018 looking for ways to better engage with their customers, increase attendance and build the overall reputation of the event, Avanade offered them a choice of paths. One was to consider more traditional marketing strategies, while the other was to utilise hyper-personalisation. Seeing the potential benefits of this innovative strategy, the organisers chose hyper-personalisation.

The first step on the journey was for Avanade to analyse their existing CRM and then develop a multi-layered approach to build a 360-degree picture of each customer – their ‘golden record’. To improve engagement levels and enable more data to be obtained from each customer, Avanade next overhauled the organisation’s mobile app. The new version collects data revealing how each customer spends their time on the app, their purchasing history for both tickets and merchandise, and whether they are buying food and beverages at the games. From this data, analyses can be made as to what their likely level of passion is for the sport itself, as well as what their budget is for merchandise and whether they are expected to be an ongoing customer.

The collected data is then fed back into the organisation’s marketing strategy, and personalised marketing campaigns are rolled out to individual customers to capture their spend. A two-and-a-half-year process, hyper-personalisation has brought the organisation a significant uplift in revenue. The app itself has also been popular, generating 65,000 new active downloads, and increasing from a 1.7-star rating to a 4.19-star rating within the first year.

Start making it personal
As brands continue to compete for consumer attention in a crowded digital landscape, retailers should look for opportunities to interact with customers more efficiently and to make offers with the highest probabilities for conversion. Hyper-personalisation enables this, and more.

By embracing hyper-personalisation as the future of retail, retailers can create a compelling customer experience, build stronger brand loyalty, and ultimately drive long-term success. Leverage your data and technology to create a tailored shopping journey for each customer and reap the rewards.

Find out how Avanade can help you create a hyper-personalisation strategy for your business or more help accelerate retail digital transformation in an AI-first world.