During the latest webinar produced by WWD, “Fashion’s Rebound,” Sherene Hilal, senior vice president of marketing and operations at Bluecore joined WWD executive editor Arthur Zaczkiewicz in discussing consumer trends and predictions heading into a digital-first holiday season.
In the past, for a retailer to meet a consumer where they were, it was about physical proximity and price. “Fast forward, past the era of Amazon and we’re now in this arena I like to call personal commerce, where every shopping experience can be encoded to the individual,” Hilal said. “It’s no longer just about price and proximity it’s about curating the best product and context to set up someone’s preferences, every single time.”
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As a result, there has been a shift in the consumer mind-set around convenience and value and further a discrepancy between the current state of retail and the modern consumer. With so much access to information, the modern consumer has changed the way of the economy and what a brand must represent.
“You see it all around us, consumers caring about sustainability, while making customization selection and if you don’t get the informed consumer what they need to buy, we’re left with that subset that falls back on price, making it harder and harder for your brand to be profitable,” Hilal said.
According to Hilal, there are a number of variables and environments of today’s informed buyer. The first variable is e-commerce as a place of exploration and evaluation. Whereas stores were previously the best equipped to facilitate discovery, advancements in personalization technology, “e-commerce is the epicenter of the most successful brands.”
The second variable is digital transformation. Legacy technology for e-commerce is built for transactions but does not support lifetime value commerce.
“At Bluecore, we think of digital transformation not just through the lens of automation, but through the lens of intelligence,” Hilal said. “Artificial intelligence and applications like machine learning are what make it possible to cater to the informed buyer through every step of the exploration and evaluation phase. Personalization technology that can also execute real-time decisions, supports the transformation of a store-first retailer to a digital-first retailer by taking each individual and their preferences and turning them into the right product, content and offer recommendations that facilitate a shopper buying again and again wherever they are.”
The final variable is the surge in social responsibility and transparency becoming a decision driver for consumers. Consumers want to know that they are buying from brands that not only sell a product that is “best for them” but also aligns with their personal values.
Brands who are getting it right, Hilal said, are those going back to fundamentals. “Similar to revisiting the fundamentals of convenience and value, the most galvanizing brands are looking at their own business models and doubling down on core product value, customer experience, retention and loyalty, and social responsibility.”
Hilal pointed to key examples of brands that have successfully adapted including Madewell and Paula’s Choice. Among legacy luxury brands, she applauded Dior for its adaption of marketing and operational structures to champion accessibility and exclusivity. “I thought it was important to highlight a luxury brand because typically luxury is made up of highly considered purchases at high margins and with little discounting so it bucks the typical vicious cycles,” Hilal said. “And yet, even here Dior is innovating to double down on their mission of true luxury that enhances lifestyle. This means branching out with partnerships with accessible and mainstream brands like Nike, shifting from gowns to more practical daily wear, and supporting their higher price points, not just with high-quality materials, but reinvesting dollars back into education and health programs to benefit women.”
Further, Hilal points out that Dior was also one of the first luxury brands to launch an e-commerce site leaning into digital early on and focusing on online exclusives to broaden their available products in a smart way.
“These brands — Madewell, Paula’s Choice, Dior — did not become digitally savvy overnight,” Hilal said. “They regenerated constantly, focusing not just on consumer preference but they anticipated and experimented with new ways to connect with shoppers.
According to Hilal, there are three actions brands can make to move at the speed of the consumer. The first is to move from transaction to connection to optimize marketing for existing customers.
“Acquisition drives revenue, but retention drives profitability,” Hilal said. “Currently, most brands are only marketing to a small subset of their more active subscriber base and ignore lapsed buyers, non-buyers or inactive buyers. Instead of chasing the future buyer and then ending your marketing after the first transaction, use your core product value to develop personalized programs that include recommendations unique to the individual that create cross-category buying and repurchase.”
In catering to the informed buyer, there needs to be a continuous two-way dialogue focused on what a brand stands for and the distinguishing features of a product. This can be done, said Hilal, through “personalization technology that uses shopping signal to determine the most compelling experience for every person.”
“The quality of your product is becoming table stakes compared to the value shoppers find in a sense of community-driven by brand beliefs,” Hilal said. “These beliefs not only include fair pricing and positive shopping experience, but it also extends to sustainable processes and support of local organizations. Legacy brands who traditionally have not displayed their beliefs openly can redefine their image in a genuine way by surfacing what they’ve represented to their customers all along.”
The second action is to optimize for customer lifetime value and the long run over quick wins and shrinking margins. “Instead of focusing on measures at the campaign level, or by channel, these brands have evolved their programs to optimize for the lifetime customer,” Hilal said. “That means shifting some of those highly promotional and expensive acquisition budgets to new programs where the key measures focus on second purchase rates, purchase frequency, cart size and customer lifetime value.”
Across apparel, 80 percent of first-time buyers never make a second purchase with that brand, but a second purchase can represent a gateway purchase with an increased likelihood of a third and fourth purchase for improved lifetime value.
“By shifting your key measure from just list growth and first purchase to purchase frequency, you will build programs that reactivate buyers to replenish products, that trigger and prioritize campaigns and that align with shopper preference,” Hilal said. “And because this is being done in a digital environment you can automate the optimization of these campaigns so the intelligently learn and improve with little manual work.
Lastly, the third action is making investments in best-in-class personalization tools to attract and nurture informed buyers.
“As exploration and evaluation begin to merge, your marketing channels and e-commerce channels need to become more seamless and coordinated,” Hilal said. “This means coordinating your technology instead of just layering new vendors on top of one another or adding a widget in your e-mail programs or on your web site. The right technology here doesn’t just aggregate data somewhere or act on data elsewhere, it unifies signal in order to learn and simultaneously act to recommend the product, content and offers unique to each individual’s preference and buying behavior.”
In short, building personalization with these key actions in mind will be a journey with the consumer rather than an “outcome.”
“We’re in this new era,” Hilal said. “Personal commerce is using all of the developed habits we have around information consumption in the speed of digital to create informed buyers and informed buyers are the key to driving repeat purchase.”
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