Personalization Success: Why Sephora and Leading Brands Thrive
As marketers, we have long acknowledged that our discipline is a combination of science and art. With the rapid advancement of digital marketing technologies, these two components are merging. We’re shifting to a more personalized brand experience for consumers, and some leading brands are seeing results.
We’re only starting to scratch the surface. Few brands have rolled out comprehensive digital personalization campaigns at this time, but some have pushed personalization through specific channels. For instance, email marketing has experienced a personalization boom. By now, we’re familiar with the impact of email subject lines on open rates. But did you know that emails with personalized subject lines have 26 percent higher unique open rates than nonpersonalized emails? That kind of lift is hard to ignore. The disappointing truth is that 70 percent of brands in 2013 were not personalizing emails!
However, a few brands, such as beauty retailer Sephora, have taken action to personalize their customers’ experiences based on demographic and behavioral indicators.
Personalization can be achieved with two necessary elements: data and permission. Data is key to achieving relevancy. It might go without saying, but personalization requires accurate data. We can’t misspell a name or misinterpret a digital behavior. Our targeting has to be nearly perfect to see real benefits from our personalization efforts. Establishing and nurturing a personalized relationship takes time, and that time has to be spent building trust with consumers. That means we need to be accurate.
Gaining permission to advance the relationship is also critical to success because consumers are in control. Once we’ve earned their trust, consumers are more likely to share personal characteristics that can refine our personalized targeting.
Brands that are successful at personalization campaigns take mini-conversions such as a newsletter signup to develop profiles that can lead to macro-conversions (sales, loyalty, advocacy). But those brands are few and far between. Unfortunately, only 22 percent of respondents to an Econsultancy survey performed for Adobe indicated that they have leveraged customer profiles or behaviors to create personalized messaging. This is not good. We have examples of personalization success stories across several verticals.
Earlier this year, Janrain shared that 74 percent of online customers get frustrated with brands that deliver content that appears to have nothing to do with their interests. Clearly, consumers want us to serve them more personalized content.
One Adobe customer—Sephora—is doing just that.
The beauty retailer has 1,700 stores in 30 countries, so imagine the variations among consumer profiles Sephora must manage. Julie Bornstein, EVP and Chief Marketing and Digital Officer for Sephora, gives much of the credit for the company’s personalization success to its loyalty program Beauty Insider, which enables the brand to convert anonymous visitors to recognizable entities. Through its ColorIQ feature, which defines skin pantone, the company can match existing products to individual skin shades.
Sephora can match shade to products in the store, seamlessly enabling a more personalized customer experience. Folks, matching shade to products is not simple—there are 110 skin tones in Sephora’s universe. Without personalization, the customer experience is clunky. Customers trying to match products to skin tone must use trial-and-error until they find a match. Bornstein explains that, “It takes women about seven tries to find the right foundation.” With its ColorIQ personalization campaign, Sephora reduces the number of attempts it takes to find the right match to their skin tone. In some cases they can find the perfect match immediately.
When a customer becomes part of the Beauty Insider program, a profile is created that can be accessed through mobile and desktop devices—and through the iPad located at counters throughout its stores. This connectivity enables Sephora to link, for example, a customer’s skin tone with products for sale within the store. So Brad can find the perfect match for his 3R08 pantone.
This interactive personalization campaign, by the way, is a boon for both consumers and salespeople, who can recommend suitable products with deeper relevance.
Other personalization success stories include Swisscom, the largest telecom company in Switzerland. The enterprise has been personalizing subscribers’ Web experiences across all its assets. Swisscom relies heavily on analytics to drive personalization campaigns. And it has not been disappointed with results. It has achieved a 40 percent lift from restructuring Web resources toward a more personalized experience for its subscribers and prospects.
Online beauty retailer ASOS has also seen success with its personalization strategies. ASOS must depend on digital-only data to shape the customer experience. Their deployment of analytics tools has provided significant lift because the brand is able to create personalized experiences based exclusively on digital interactions.
Sephora, Swisscom, ASOS, and others have founded their programs on the people, processes, and products that move their brands. They are successfully leveraging customer feedback, in the form of both anonymous and known visitor data, to enable personalization across their digital marketing platforms. As Sephora’s Bornstein points out, technology has moved control to the consumer and out of back-end IT groups. So she starts with the end user in mind and builds out Sephora’s digital marketing campaigns to match consumer sentiment and preferences. This then enables the company to match solutions to needs.
She does this with the help of analytics tools.
Adobe Target, for example, enables a convergence of user-based signals and measures against a “general score” comprised of wider market behavior related to certain experiences. The outcome is a weighted indicator representing an individual’s past behavior versus the “wisdom of the crowd,” so that we may clearly predict how that person might respond to different experiences in the future.
Sephora et al. have leveraged their creative talent to uncover new ways to deploy personalization campaigns that get them closer to their customers. They recognize the strengths of data and the art of gaining permission and trust. For those brands that have not experienced the lift that personalization enables, I encourage you to move your marketing teams toward campaigns that create a sharper image of your customer and provide them an experience they will reward with loyalty.