Why Omnichannel Personalization is crucial for D2C brands?
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Why Omnichannel Personalization is crucial for D2C brands?

Published : June 18, 2020
omnichannel personalization for d2c brands

In 2006, The Time Magazine named “You” as it’s person of the year, in recognition of the way user-generated content (UGC) created by individuals and made available to a wider audience was changing the business world. As a result of the 2008 recession many things changed in the business world, but the supremacy of the individual gathered momentum. 

D2C brands no longer had complete control on how their customers interacted with them. With vast amounts of user-generated content (UGC), consumers were able to obtain every detail of a brand’s offering as well as that of their competitors to make an informed purchase decision. This changed the world of marketing forever, marking the end of an era.

With this loss of control came the need and challenge for D2C brands to understand their customer’s needs, desires, expectations, where and when a customer prefers to engage etc. With content and information at the buyer’s fingertips there is no room for error, one misguided interaction can cause the customer to shift his/her attention towards competition who is also after the same goal – the execution of an impactful, personalized experience that will convert prospects into loyal customers.

This has led to the rise of The Omnichannel Strategy.

What is the Need of an Omnichannel Strategy?

An omnichannel strategy puts the customer and not corporate silos at the center of it’s strategy. A D2C brand that adopts this, acknowledges the fact that their customers can engage with them in multiple ways across multiple channels (website, mobile, social media, etc.) simultaneously.

 Omni-channel: unified customer view

This means the marketer needs to have a unified customer view of every customer, in order to ensure customers have a seamless customer experience; blurring the boundaries across channels.

Necessity is the mother of invention

The COVID-19 pandemic has accelerated digital adoption among consumers. Which means D2C brands, like you, need to rethink your strategy.

graph of digital adoption, by industry, % of digital access

Source : Mckinsey Insights

Now more than ever, you need to focus on customer-centricity. Remember a missed inflection point has cost a lot for brands in the past like Kodak and Nokia. 

What do you need to do?

Digital Transformation – is just the first stepping stone.

To ensure you regrow and sustain beyond this pandemic you need to deliver relevant, impactful, and cohesive experience to your customers across all digital touchpoints; leading to the dire need for Omnichannel Personalization.

What is Omnichannel Personalization?

Remember the times when seeing your name in the subject line of a generic email campaign seemed like a revolutionary advancement in digital marketing? 

But today personalization is offering every individual customer a tailored experience based on his/her behavioral data-points, previous interactions, geolocation, demographics etc; that will give your brand a competitive edge in this increasingly crowded and tech-savvy marketplace. 

A few questions you might have:

So, omnichannel personalization is customization?


Let’s define customization – the action of modifying something to suit a particular individual or task. 

They sound pretty similar, right?

While they both achieve the same goal, the path to that goal is different.

Let’s look at a common scenario to understand the difference better:

You roll out a form to each of your customers where they can choose their preference in type of clothing, size, pattern, price range, etc. and then you send them a customized email for relevant products. This is customization. 

Whereas, if you are using personalization, you would already know your customer’s choices. You would know that – Mary purchases from the Women’s section, prefers pant-suits in the price range of $100 – $150. 

Using this data you can now send emails,web push notifications, and app push notifications informing Mary about relevant products even before she asks for it! 

According to an Accenture Survey,  91% of consumers are more likely to shop with brands who recognize, remember, and provide them with relevant offers and recommendations.

So, personalization is leaning more towards segmentation/personas?


Let us look into this scenario to understand the difference:

Imagine you are a customer. You purchased a pair of running shoes. Based on this information you are segmented into a group of customers who purchased the same running shoes.

Let’s say the members of your segment group, a minor majority (let’s say 4 out of 10) purchased a watch as their next product, the remaining 6 out of 10 purchased various other products. 

Based on this minor-majority data, the product recommendation would be a watch. Which means for this segment 6 out of 10 times the product recommendation was wrong!

This is where AI-based personalization makes sense. Every customer is seen as an individual and individual-level data is tracked like age, gender, device , geolocation, pages browsed, time spent on each page, product categories viewed etc. to truly know an individual customer’s interests and intent. 

Don’t just think persona – think persona and behavior.

71% of consumers feel frustrated when product recommendations are based on impersonal segment data.

Omnichannel Personalization is good for your business

  • Inventory – the largest asset for D2C brands

For most D2C brands, the cost of inventory is the heaviest expense item and what leads to the most financial woes. Obviously there is a direct correlation between inventory turns and a brand’s success – you sell more, you turn more inventory!

Imagine you are sitting in a restaurant and the waiter says “Your favorite pasta when paired with XYZ wine tastes the best”. This is classic cross-selling, let’s look at two views here:

Customer: Impressed and satisfied 

Restaurant: Sold both pasta and wine, which means increased sales; more inventory turned.

With personalization, you can understand your customers better by tracking their onsite and cross-channel behavior and use this knowledge to cross-sell products across your inventory range. Thus, decreasing your month-to-month inventory holding costs.

You can reduce your inventory costs by 10% by reducing inventory distortion.

  • Customer Lifetime Value (CLTV) : Customer Acquisition Costs (CAC)
Graph of CAC v/s  CLTV

Paying to acquire users might sound paradoxical. But, unless you’ve created a viral marketing campaign that organically drives customers to your website – through strong word-of-mouth, you will have to invest a sizable portion of your marketing budgets into acquisition efforts. You will be waiting forever and a day by the time your marketing and advertising efforts catch up.

Your CAC is increasing!

Which means you need to increase your CLTV !


Improve your Average Order Value (AOV) and Purchase Frequency by providing your customers with personalized product recommendations based on an ideal price point for each individual customer, you can ensure an increased frequency of purchase.

Use your unified customer view to choose the right customer and the right time to send personalized and meaningful relevant product recommendations to upsell a product. Thereby, increasing your Average Order Value (AOV) per customer.

You can send these recommendations across all channels: email marketing campaigns, web push notifications, app push notifications etc.

This will help you maintain a healthy CLTV:CAC ratio.

  • Customer Retention – Brand Loyalty

In an increasingly competitive landscape, building customer loyalty is one of the biggest challenges marketers face. And if they aren’t personalizing their customer experience they are missing a trick.

56% of online shoppers are more likely to return to a website that gives personalized product recommendations 

A research by PWC uncovered 12% of online shoppers choose their favorite retailer because of personalized offers.

  • Aid product discovery – increase sales 

Tailoring a home-page 1:1 to show relevant content and relevant products aids a customer in product discovery thus increasing sales by 7%.

  • Reduce customer churn rate – Personalized cart-abandonment emails

You are losing a huge number of sales unnecessarily, when customers put products in their cart and drop out before completing their purchase.

Collecting real-time data from shoppers as they browse and if they abandon their cart can help you end them triggered personalized “cart-abandonment” emails to nudge them back to complete their purchase; thus increasing sales by 8%

  • Return on Advertising Spends (ROAS)

The average global CTR for digital display ads is just 0.17% which translates to fewer than two clicks per 1000 impressions. 

The solution for this abysmal performance is personalised ads! 

A research states that personalised ads can increase CTRs by 158%.

Ultimate Nirvana – Low costs, High sales!

Increase your ROI – a recent survey says brands have had $20 return for every $1 invested in personalization, that is nearly a 20X return!

Nike has stopped selling on Amazon – all of us read this groundbreaking headline. That was just the beginning – since then it has been setting benchmarks by evolving into a true D2C brand – investing on Omnichannel personalization and garnering a 3X increase in their sales. 

Evolve into a true D2C e-commerce brand, see increased profits and higher ROI – Just Do It! 

[ This is the first in a series of blog posts to help you understand “WHY you should” and “HOW you can” become a true D2C brand ]

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