How The Warehouse Group is using dynamic creative and personalisation to drive revenue
The promise of data-led creativity is one that many marketers are hoping for, but without a willingness to be imperfect and allocate resource, it’s not a goal that many are reaching.
The Warehouse Group (TWG) is one of New Zealand’s biggest retailers and it recently invested into personalisation via McDonald’s-owned personalisation specialists Dynamic Yield. According to the brand, it reached its annual incremental revenue target “within months” and is now looking at how this technology will shape its strategy for 2020.
Yaniv Navot, vice president of marketing at Dynamic Yield, explains that TWG had quick success because it was able to push through innovation quickly, and with the resource, even though it wasn’t always perfect.
“Far too often, we run into teams who are overly concerned with ‘breaking the brand’ and won’t ship a piece of creative until it’s perfect but aren’t allocating enough resources to solving a real pain point. What good is a piece of creative if, in the end, it has no bearing on the customer experience? The Warehouse Group isn’t afraid to push ideas forward and make mistakes. In doing so, they’ve actually accelerated the rate of insights generated and sharpened their understanding of the customer,” he explains.
This is backed up by TWG’s Nathan Martin, an e-commerce personalization manager at the brand, who led the project.
“Our results so far have exceeded our expectations. We initially thought things would start small and build up slowly. What we found is that by just splitting our user base into a few key behaviours and showing them different messaging, as well as revamping our product recommendation strategies, we were able to make our annual incremental revenue goal within months. With additional investment into personalisation and adoption from the wider business, we expect 2020 to have a similar trajectory,” he explains.
Martin also explains that personalisation for such a big retailer is crucial, particularly as they look into how the technology will also work online.
“Being New Zealand’s leading general merchandise retailer, we sell everything from dresses to gaming consoles to trampolines. However, we only have a certain amount of real estate on our homepage to promote those items. Before personalisation, we actively promoted the top revenue drivers or what is trending at the time, making up only a fraction of our total range."
"What about the customers who had no interest in that? They are forced to either use the search bar or menu navigation, leading to high exit rates. With personalisation, we are able to give every customer a unique journey by predicting their next actions and showing them what they came for,” he says.
The need for personalisation is also set by other retailers, particularly those born from e-commerce, rather than traditional brick-and-mortar stores.
“Global retailers have set personalisation as an expectation, so much so that users will leave at even the smallest roadblocks. Our online web stores only make up a small portion of our total revenue. Marrying online and offline journeys are crucial and becoming an expectation from our customers. Someone who researches a television online and goes in-store to purchase it doesn’t want to be bombarded with television recommendations online for the next two months. Omnichannel personalisation allows us to know when those events happen and to then recommend home setup services, audio equipment, and sofas,” he explains.
Aside from allowing imperfection and allocating the right resource, both TWG and Dynamic Yield that starting simple and not getting carried away by the possibilities is the top piece of advice for brands looking at personalisation.
Navot explains: “The Warehouse Group’s initial use cases were meant to be revolutionary, but instead, aimed to improve upon current strategies or tools for influencing the customer experience. It’s easy to get swept up in all of the possible ways to implement personalisation, however, it’s important to exercise good judgment and start by making small optimizations to the site. Testing simple elements such as the banner on the homepage, images on PDPs, or deploying something like social proof messaging can produce quick wins that can actually help to achieve greater buy-in, establish trust in a program, and ultimately increase testing velocity.”
Martin adds that focusing on scalability is also something brands need to consider when investing in personalisation and the resources it needs, as well as training teams.
“Avoid the shiny object syndrome. These are the personalised campaigns that sound great but require a lot of resources and will only show a fraction of the user base. If you think you will struggle to recoup the costs, it is probably not worth pursuing."
"Focus on the scalable. These are ‘always on’ campaigns that, once set up, can be left to run indefinitely. They are the campaigns that don’t require a lot of clear-cutting images and shooting lifestyle imagery."
"Train the wider team. Our personalisation team might be small, but we have several content loaders and planners in the wider team who have mastered our personalisation tool. They are able to show dynamic content to different audiences without any involvement from us. This lets us focus on the development of new campaigns and templates,” he explains.
As for what is next, higher regulation on data and more consumer awareness on how data is being used is something that brands need to be cognisant of, according to Martin, while the business will be looking at how it can extend this strategy across all of its touchpoints.
Navot also believes that expanding personalisation across touchpoints is a major trend for 2020 because while consumers do expect more trustworthy treatment of their data, there is also a hunger for experiences that are personalised and relevant, whether it’s online or offline.