How personalization shapes the retail industry

Foot Locker unveiled a new loyalty program on Tuesday as it plots a turnaround course under CEO Mary Dillon, who is still relatively young in her tenure at the company. 

The refreshed FLX Rewards program comes as the athletics retailer is in the midst of a larger overhaul of its business, including much of its customer experience. That ranges from store revamps for the majority of its fleet and new store concept launches to various website improvements and a new mobile app, which will launch later this year.

“Kind of grounding in Mary's lace-up plan overall for the business is this fundamental idea of being more customer-led as an organization,” Chief Customer Officer Kim Waldmann said, noting that the retailer took an eye to its existing loyalty program through that lens. “What we found was, it was really engaging our sneakerhead-type consumer, who was excited about product heat and launches, but we had an opportunity to really democratize the program and provide value to more consumer segments.” 

Key to doing that is the new FLX Cash benefit, which allows shoppers to redeem points for discounts of $5, $10 or $20. Members of the loyalty program earn 100 points for every dollar spent. Foot Locker also introduced free returns as part of the relaunch, in addition to the existing benefit of free shipping with no minimum order. Some of these more value-oriented perks appeal to the average consumer more than the sneakerhead, and lead to higher wallet share, according to Waldmann.

Already, the company is aiming for 50% loyalty penetration by 2026, and in the future, it hopes to hit 70%, per a company press release.

“What we have seen in the pilot is even if they're redeeming cash back, that means that they're spending more frequently and consolidating their share of wallet with us, and so ultimately, it's incremental,” Waldmann said.

She noted that a pilot of the loyalty program in Canada saw customers shopping with Foot Locker more often and buying more when they did. And although a key goal of the program is to bring in more of your average consumer, Foot Locker is also introducing features geared at its sneaker-loving fan base.

For example, another use of loyalty points is to cash them in for an extra shot at getting access to new sneaker drops. Similar to buying multiple raffle tickets, purchasing an “extra boost,” as Waldmann calls them, ups your chances of getting selected.

“And that obviously matters a ton to get those Jordan Retro 4’s or whatever the high heat product at the moment is,” Waldmann said. “Some are really going to value that, and some are just going to value the ability to get rewarded financially for the more that they spend with us over time.”

The FLX program will also feature members-only sales events and one-off giveaways like the chance to win sneakers for a year.

When Foot Locker’s new mobile app launches later this year, it will be closely tied to the loyalty program, with a hub where shoppers can view points, rewards and scan their loyalty card in stores. The app will also include a “heat monitor” to tell shoppers how hot a product drop is likely to be — for example, just “hot” or “atomic.” The idea behind that is to give customers a sense of how many points they should put toward an upcoming drop, according to Waldmann. 

A “Store Mode” feature will allow shoppers to scan products in a given Foot Locker store and see what the retailer has in their size. When asked if a store associate will still have to go retrieve those products for shoppers, Waldmann said they weren’t sharing that information yet.

Looking ahead, Foot Locker plans to invest in personalization based on the data it receives from the loyalty program. That could mean more targeted marketing to different consumer segments, as well as more data insights for brand partners, like Nike. Nike has shown an interest in sharing data with its wholesale partners in the past, including by tying its loyalty program to Dick’s Sporting Goods in 2021 and launching a similar effort with Hibbett two years later.

When asked if that’s in the future for Foot Locker, Waldmann said Nike is “super excited” about Foot Locker’s loyalty program, “in terms of consumer engagement, but also the value that it brings back to them in terms of access and personalization. We're both very focused on getting this out the door and then we obviously always have conversations about what the future looks like and how we can integrate more deeply together.”

For Foot Locker, the loyalty program revamp and soon-to-drop mobile app represent another ticked box on a long list of turnaround priorities, and hopefully — a base to build upon next year.

“We're setting the foundation on all of these pillars this year,” Waldmann said, “and then we'll continue to build on them to deliver a great experience in the future.”

Stitch Fix announced Tuesday a partnership with Spotify to launch Style Tune Ups, which offers personalized outfit recommendations based on the findings from its 2024 Style Forecast report, along with curated playlists from Spotify.

Upon answering questions on Spotify about personal style, the interactive experience will reveal what trend from the style forecast best embodies the customer. Spotify then curates a personalized playlist with the shopper’s style and music preferences. Clients can share their results with a Stitch Fix stylist ahead of their next box, according to a company press release.

The company is also debuting Tune Up Styling Sessions starting Feb. 1 where customers can book a virtual appointment to create looks to wear to live concert events.

Stitch Fix is finding new ways to integrate personalization into its platform in order to attract customers.

Data from Stitch Fix trend report shows that more than half of its clients are likely to "dress the part" when attending their favorite artist's concert, according to the company.

"Stitch Fix mined billions of data points from over 100 million Fixes to create the 2024 Style Forecast, our annual trend report, and found that music will play a monumental role in clients' styles this year, with nearly four in five of our clients taking outfit inspiration from their favorite artist, Taylor Swift," Jenny Herr, Stitch Fix Head of Trend, said in a statement. "Thanks to these and other music-related insights, it was an intuitive next step to team up with Spotify — a brand also known for its expertise in data and personalized recommendations.” 

The launch of the new feature comes as Stitch Fix faces changes, including C-suite shakeups and layoffs. Last week, Stitch Fix announced it cut 10 “styling leader” positions, and said it would get rid of full-time styling positions as of March 31. This followed job cuts last year: The retailer in October 2023 announced the closure of a Dallas distribution center, impacting 558 jobs. Earlier that same year, the company also decided to shutter a Pennsylvania warehouse, resulting in 393 people losing their jobs.

In its most recent earnings report, Stitch Fix’s Q1 net revenues fell 17.8% year over year to $364.8 million.

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By Acoustic

What’s the average email open rate?

Marketers have been asking this and other metrics-related questions for years. And as people keep trying to improve their marketing programs, benchmarking your brand’s performance is only becoming more crucial.

With this in mind, Acoustic is excited to share the findings of our 2019 Marketing Benchmark Report. It examines email and mobile marketing messages sent by thousands of brands in 2018 to share industry standards on customer engagement, delivery, device and email client type, and subscriber churn. All of this data helps marketers understand how their programs stack up to competitors and the report’s analysis and tips provide insights to help improve performance and results. (You can actually see how your own metrics compare to top performers in our interactive tool.) So let’s dig into a few of this year’s highlights.

Slicing through the data

Open rates and click-through rates continue to grow: Since 2014, open rates and click-through rates (CTRs) have increased steadily each year — with the biggest jump in 2018. Open rates rose to 24% in 2018 from 21% in 2014, a 14% increase. And click-through rates increased 19% to 3.8% in 2018 from 3.2% in 2014.

This steady rise is likely a combination of two factors: one, brands are focusing more on list hygiene and high-quality subscribers, and two, messages are more relevant due to the increased use of behavior- and preference-based personalization and journeys.

Privacy regulations such as GDPR and CASL (Canada’s Anti-Spam Legislation) that limit how data can be used and shared are rapidly changing the marketing landscape, forcing brands to find new ways to drive loyalty without jeopardizing the privacy of consumers. Because of these and other current and planned regulations, many brands are greatly increasing their focus on list hygiene, permission practices, and quality over quantity. As a result, with the denominator number in metrics improving (list quality), open and CTR metrics are rising and are likely will continue.

Auto races to the top of click-through rates: This is the first year we have metrics for the Automotive industry, and the results were impressive. Emails sent by auto brands clearly click with recipients with a mean of 10%, far above the second highest industry, Computer Hardware and Telecommunications, which has 7.3%. Lowest performing industries include Hospitals, Healthcare & Biotech, Industrial Manufacturing & Services, and Retail & Ecommerce all at 3.0% and Nonprofits, Associations & Government with a mean of 2.8%.

So why are auto brands on top? They tend to send emails infrequently, but when they do, current owners and shoppers often click on recommended service information or browse a new model of interest. So lower frequency and high consumer interest and relevance are driving high CTRs.

Mobile email engagement declines: The percentage of consumers opening emails on mobile devices dropped to about 44% in 2018 from 49% in 2017, likely because modern consumers use mobile devices primarily for inbox maintenance.

Comparatively, the average percentage of consumers opening webmail (such as Gmail or Yahoo) increased to 40% from 33%. As consumers increasingly use mobile for general inbox maintenance, they can more quickly identify and delete messages.

Transactional messages are top performers: Emails that are triggered by a customer’s behavior have average (mean) open rates 20 percentage points higher than non-transactional emails such as promotional offers or newsletters. Transactional messages sent in 2018 had a mean open rate of 47.6% versus 23.8% for non-transactional messages.

Transactional emails have always performed well because of their relevance and timing. Unfortunately, many marketing organizations neither own these messages nor are optimizing their design, content, and opportunities to cross- or up-sell customers or educate new buyers leading to greater customer experiences.

Mobile App Inbox Messages Outperform Push Notifications: Consumers open simple mobile push notifications about 5% of the time while mobile app inbox messages see average (mean) open rates of more than 22%. Push notification content — such as a flight delay, package shipping status, or breaking news — often doesn’t require further action from the recipient. Mobile app inbox messages, however, present a significant opportunity to create an email or web-like HTML experience for customers within the app inbox.

The data in the latest Acoustic Marketing Benchmark Report shows that email and mobile marketing continue to not only thrive but that marketers can expect to see improved results from these channels. See how you stack up by downloading our report.

Nordstrom has launched a “Stylist Ambassador” program, enlisting store stylists from each of its top 20 markets, which include cities in the U.S. and Canada.

The stylists will work as influencers, helping to “bring the Nordstrom experience to life in a variety of ways including social media, events,” media opportunities and other channels, according to a company blog post.

Nordstrom’s top 20 markets are Los Angeles; New York; Chicago; Dallas; San Francisco; Boston; Philadelphia; Seattle; Toronto; Washington, D.C. (including Baltimore); Atlanta; Austin, Texas; Denver; Detroit; Houston; Miami; Minneapolis; Portland, Oregon; San Diego and West Palm Beach, Florida.

Last year, Nordstrom finally ended its long-struggling Trunk Club apparel subscription, a service akin to Stitch Fix where customers would sign up to receive a box of clothing curated by a combination of algorithms and human stylists. But even then, CEO Erik Nordstrom said the retailer would expand its styling services to include more virtual touchpoints.

Nordstrom sought to make clear that the retailer is aware of how much stylists can influence a sale. Customers engaging with a stylist, online or in a store, spend seven times more and report higher levels of satisfaction, he told analysts in May. As a result, the company is investing in styling, ranging from what Nordstrom called “low-touch outfit inspiration through our digital channels to a high-touch and personalized relationship with a stylist.”

That low touch can nevertheless be powerful, according to Deb Gabor, CEO and founder of Sol Marketing. She praised the diversity of the first group of stylists, as seen in a video provided by Nordstrom, and said the campaign overall fits with her recommendation that retailers and brands bring “authentic human connections to a customer experience.”

“The combined approach of personalization and localization enables consumers to take advantage of a high degree of market-level knowledge and might empower shoppers to deepen their relationships with Nordstrom, powered by real humans,” Gabor said by email. “Nordstrom can extend its brand value through interpersonal relationships. This represents a novel 360-degree approach to giving customers access to Nordstrom when, how, and where they want.”

The company will choose a new group of stylists each year, “and our hope is that this program helps them continue to grow their business and expand their styling expertise,” Nordstrom said in its blog post. 

NEW YORK — Target wants the retail industry to know it’s brought its “Targét" touch to grocery and omnichannel. 

Ease, joy and affordability are the pillars of the retailer’s framework for differentiating itself to customers, Chief Growth Officer Christina Hennington and Chief Food and Beverage Officer Rick Gomez said during the National Retail Federation’s conference in New York earlier this week.

Like other mass retailers, Target has benefited from the initial pandemic years prompting one-stop shopping, as well as recent months-long high inflation placing a renewed focus on value — leading to mass retailers attracting more grocery shoppers and posing bigger competition to traditional supermarkets. 

While Target a few years ago lagged other large national retailers in areas such as grocery assortment and having a loyalty program, the Minneapolis-based retailer has not only worked to catch up, but now, according to Gomez, sees its innovation in food and beverage and omnichannel as providing competitive advantages over traditional grocers and other mass retailers. 

That innovation ties into Target positioning itself at the intersection of affordability, one-stop shopping and experiential retail, both in-store and online, with “affordable joy,” Gomez noted. 

“At Target, we think about building a shopping experience that's differentiated on multiple dimensions. But it's really about creating an emotional connection to that consumer,” Hennington said in a one-on-one session with Kantar with a packed audience on the last day of the conference. 

Here’s what Hennington and Gomez, who are also both executive vice presidents for the retailer, shared in separate NRF sessions Tuesday about how Target is innovating with grocery and omnichannel.  

Taking a ‘holistic’ approach to value

With the challenging economic environment and the looming threat of recession, Gomez said Target is tapping into different components of value to appeal to consumers. 

“Value is top of mind, but we have to think about value more holistically than just price,” Gomez said, noting consumers also want quality, ease and convenience. 

Gomez highlighted Target’s private brands as a prime example: Good & Gather, which launched in 2019 and is now a $3 billion brand, offers high-quality, better-for-you options at an affordable price while Favorite Day, which debuted in 2021 and is growing by double digits, focuses on indulgence.

“We call them ‘own brands’ and not ‘private label’ because we put as much care and attention into the research, the design, the packaging, the quality as any great brand,” Hennington said.

To provide value through ease, Gomez spotlighted Target’s dinner solution meal bags, which cost around $15 and include the ingredients needed to make family-favorite recipes: “It’s been a huge success.”

Using assortment as a differentiator

Target’s multi-category offerings provide one-stop shopping that people can’t get at most grocery stores, Gomez said: “We’re a $20 billion grocery business. It's a big business for us — bigger than a lot of regional grocers — but it's only 20% of our mix.”

Hennington said Target is looking to provide inspiration with its assortment. 

Drilling further into assortment advantages, Target has a three-pronged approach to its food and beverage business that sets it apart from conventional grocers: own brands; national partners who can offer exclusive, limited-time items; and small, emerging brands often from BIPOC founders and women, Gomez said.

Target is growing its private brands portfolio. “Our own brand portfolio is actually growing 2X [compared to] national brands, and I think that's our guests saying, ‘We are looking for value during these tough times,’” Gomez said.

The retailer introduced a new private label line of pre-mixed cocktails called Casa Cantina last year and in 2021 added a plant-based line under its Good & Gather brand. Target’s Favorite Day is one of the top fastest-growing private label brands by household penetration in the second quarter of 2022, according to findings from Numerator. 

Target’s over $30 billion worth of own brands is a large part of its “secret sauce,” Hennington said.

Gomez noted that Target supports emerging brands to help them scale their business at Target “and beyond.” For example, the retailer worked with the McBride Sisters wine brand to launch varietals: “They've gone on to other retailers and they're selling in other places, but we're really proud that we were able to partner with them in the beginning,” Gomez said, adding that the brand’s Black Girl Magic wine has been “hugely successful” with Target shoppers. 

Hennington also pointed to the commitment Target made in 2021 to invest more than $2 billion in Black-owned businesses by 2025, which the retailer said in May it’s on track to achieve.

While Target, like many other food retailers, has had to stay focused on supply chain availability for the last couple of years, increased innovation in food and beverage that provides “newness” is an area Gomez is especially excited about. Health and wellness, in particular, is one area where Target customers are leading edge and interested in trying new things, Gomez said, pointing to its vegan, plant-based line launched with Tabitha Brown at the start of this year. 

“[It’s] very approachable, very affordable and it has done incredibly well,” Gomez said about the exclusive line.

Experimenting with store formats

Target has completed over 1,000 remodels to date and is rolling out different store formats to meet different markets, Gomez said.   

In March 2021, the retailer promised to invest $4 billion annually in remodels, new stores and online fulfillment enhancements. Last year alone, Target pledged $5 billion to scale its operations in 2022 with work on its digital, fulfillment and distribution capabilities.

For example, the retailer has dozens of small-format locations, which it heavily leaned into in recent years, in Manhattan and paired with college campuses, Gomez said. 

Last spring, Target unveiled its first net zero energy store, which is located in Vista, California, around the same time Amazon announced its pursuit of a net zero carbon certification for a new Amazon Fresh in Seattle.

Now, Target is seeing opportunities to also open larger stores, such as the nearly 150,000-square-foot location it opened in the fall in Katy, Texas. Leveraging different store formats is all about meeting the needs of individual markets, Gomez said.

“We want to show up in a way that's appropriate for that community” regardless of store size, Gomez said.

Boosting omnichannel services

Target has long had a strong reputation for its in-store shopping experience, but the retailer is positioning itself as an omnichannel retailer that blends in-store and digital, Gomez said, noting customers are intertwining different shopping methods. 

“They may start digital and end up in stores or start in stores and end up in digital. They may be in stores and they're on their app at the same time,” Gomez said. “So we need to build both and we need to have the best of both. ... One of the things that we're doing is we recognize that the store experience is just as important as digital.”

The pandemic prompted Target to transform its business overnight, Gomez said, by expanding same-day services and allowing shoppers to get dry and frozen grocery, alcohol, fresh produce and more in a four-minute drive-up pickup. Target has also brought its widely popular in-store Starbucks cafes into its curbside pickup service and has also expanded its pickup and same-day delivery options for alcohol. 

After testing Starbucks drive-up orders in about a dozen stores, Target has now rolled the option out to approximately 250 locations.

“We’re not advertising [the Starbucks drive-up option]. We’re not marketing it. Quite frankly, we don’t need to because the social media alone is driving a ton of trial,” Gomez said. “And our guests, they love it.”

It’s a prime example of how Target is turning to innovation to bring “a little bit of happiness to people’s everyday moments,” Gomez noted. 

Creating a customer-focused loyalty program

Collecting data is important but Target learned the hard way it needed to build a customer-first loyalty program in order to successfully glean shopper insights.

When Target first tried to launch a loyalty program about four years ago, its initial offering was “transactional” by rewarding spending with points, said Gomez, who admitted that Target was lagging other major mass players in offering loyalty programs. 

After roughly a year and not getting the desired results, Target pulled the program: “We lost sight of what we do, what we believe in, which is: data is in service of our relationship,” Gomez said.  

In its next attempt to create what is now Target Circle, the retailer made personalization the centerpiece, allowing members to unlock offerings that are tailored and relevant to them and also letting them vote for which local charities in their communities they want Target to make donations to. With more than 120 million members currently, the program is one of the largest and fastest-growing loyalty programs in the U.S., the Target executives noted. 

Hennington said that Target is connecting its loyalty program data with its retail media network, Roundel, to further boost its customer experience and also deepen its vendor relationships.

“You have to put the consumer at the center ... The point of innovation is to make sure that you are either addressing their pain point or providing the delight that your guest is looking for. I think innovation comes big and small. It's in products and services. And we focus a lot of innovation on ease, providing the joy [and] providing affordability,” Gomez said. 

In an effort to expand accessibility for beauty consumers, L’Oréal last week showcased its new handheld, computerized makeup applicator called HAPTA. 

The beauty corporation’s HAPTA technology aims to help those with limited fine motor skills apply makeup more easily using an ergonomic handle with a magnetic attachment at the top, per a company press release. HAPTA also has a “clicking” function that allows users to maintain the application position they’re in, and save it for future use. 

HAPTA will be piloted through L’Oréal brand Lancôme this year, beginning with a lipstick applicator and expanding application options in the future.

"For years, Lancôme has sought to provide every woman with beauty solutions adapted to their needs. Beauty tech has enabled us to fulfill this mission in an even more powerful way, revolutionizing the way we develop beauty products and services and enabling greater personalization," Françoise Lehmann, Lancôme global brand president, said in a statement. "With HAPTA we are going one step further by making beauty more accessible to use, because everyone should have equal access to it."

Along with HAPTA, L’Oréal also released a new eyebrow makeup applicator called L’Oréal Brow Magic, which offers in-home AR technology through a handheld device with 2,400 tiny nozzles to print a recommended shape onto a user’s brows. The technology will officially launch this year, with the goal of providing more precise eyebrow application without the need for more invasive procedures like microblading.

L’Oréal isn’t the only beauty company interested in making the industry more inclusive, however. Estée Lauder on Wednesday released a voice-enabled makeup assistant mobile application to help visually impaired users apply makeup. Guide Beauty was created by founder Terri Bryant in 2020 to help makeup users have an easier time using products. Bryant founded the brand following her Parkinson’s disease diagnosis, and brought on actress Selma Blair — who has multiple sclerosis — as chief creative officer.

Guide’s patented design eyeliner applicator uses a “wand” shape with a built-in finger rest and a window on the tip for application visibility.

Perfect Corp. on April 2 announced its AI tool that can identify a customer’s hair texture, thickness and curl patterns in seconds, according to a press release. With the results, hair care brands and retailers can offer an, “enhanced and customized shopping experience,” per the company.

The tech can identify up to ten distinct curl patterns and shapes. By scanning with a camera, shoppers learn their hair type and can receive recommendations personalized to address their own hair care needs. 

The AI Hair Type Analysis places a customer in one of nine hair type ranges across ten categories, from straight to coily. The tech can be applied by brands as an e-commerce web module or in-store with consultations, per the company’s site.

Perfect Corp identifies hair as follows: 1 (straight), slight wavy, medium wavy, thick wavy, loose curls, medium curls, tight curls, kinky soft, coily and 4C (extremely coily). For customers with multiple hair textures, the tech company's tool can also accurately detect a curl range for a shopper.

 “The innovative AI Hair Type Analysis technology simplifies the purchasing journey, empowering individuals to make confident, well-informed decisions when selecting hair care products,” CEO and founder Alice Chang said in a statement. “We are excited to introduce this cutting-edge solution to the hair care retail industry as it drives satisfaction and loyalty through personalization.”

The technology is meant to streamline interaction between hair care brands and its customers. It will help the “pain point” of customer confidence when purchasing, with the help of insights into a shopper’s own hair characteristics, Perfect Corp said. Perfect Corp on its website said the tool can help brands establish their business as a leader in the hair care industry with tailored recommendations for each customer, boosting sales and customer satisfaction. 

Personalized hair care has existed in the industry with brands including Function of Beauty, Prose and now Curology. Typically, these brands offer an online quiz with relevant health questions or can require photos of the area wished to be treated. 

Prose offers custom hair care products and branched out into skin care in June 2023 with an AI-powered line offering different formula combinations. Personalized hair care brand Function of Beauty made a similar move in August 2021, acquiring customized skin care company Atolla. 

Curology, another personalized beauty brand, recently expanded into hair. Originally offering personalized skin care prescriptions, the company’s Hair Formula RX is a personalized prescription hair growth treatment. Curology’s ingredients could help regrow hair in three months, per the company.

Expanding its Elfa product line, The Container Store has launched Decor+ by Elfa as part of its efforts to expand its Custom Spaces offering, the retailer announced Wednesday. 

The additions to the line were designed for closet and living spaces like offices. Decor+ by Elfa is available at all stores and online.  

The expansion comes after the launch of Garage+ by Elfa, which was added in late 2023 and surpassed initial sales expectations, per the company. The retailer said it plans to promote Decor+ by Elfa in a marketing campaign this fall. 

The Container Store’s product expansion is part of the organizational retailer’s effort to propel its Custom Spaces to a new level. The retailer introduced new offerings to its Custom Spaces product lines, including its Garage+ by Elfa system and its Preston lines, last year.

With the debut of Decor+ by Elfa, customers can have free in-store, virtual or-in home custom design, or can shop for individual products or purchase a pre-designed space. Items can be installed independently or with the help professional installers. 

Decor+ by Elfa has the same wall-hanging adjustable framework as Elfa, but with new features including enclosed full-extension drawers, LED lighting and solid wood drawers, fronts and trim. It is made of steel and solid birch and comes with the option of back panels. Among the other products in the assortment are mesh drawers, knobs and accessories, per the company’s website.

“Expanding our assortment so that we are meeting the needs and desires of today’s consumer is one of the key elements to increasing our Custom Spaces business to 60% of annual sales and capitalizing on the $6 billion addressable Custom Spaces market over time,” Satish Malhotra, CEO and President of The Container Store, said in a statement. “We believe the unique proposition of Decor+ paired with our complementary organizing solutions gives us a competitive market advantage and look forward to seeing how customers respond.”

As the company aims to grow its Custom Spaces arm, The Container Store reported a 20.7% drop in Q4 consolidated net sales from last year to $206 million. Store comps fell 21.8% year over year, while e-commerce was down 30.8% during the quarter. The New York Stock Exchange notified the company that it is out of compliance with average closing price rules. The company is working to return to compliance. 

In February, the company reduced its workforce by 2.5%, roughly 100 staffers. The retailer provided laid-off workers with severance and other support from human resources.

Joining other retailers investing more in augmented reality, Walmart announced this week that it will release two new app-based AR tools for at-home and in-store shoppers, according to a blog post by Walmart eCommerce Senior Vice President of Site Experience Brock McKeel and Walmart Global Tech Senior Vice President of New Businesses and Emerging Tech Cheryl Ainoa.

The new “view in your space” feature, which will be rolled out to all customers by early July via the iOS app, allows shoppers to view select furniture and decor items in their spaces. This will initially be available for 300 items but Walmart will expand the offering to back-to-college items in the coming months.

The other feature – which does not have an anticipated launch date and is still in development – is an in-store AR app feature to personalize product information. Shoppers and employees will be able “to simply point their mobile device camera at our store shelves via the Walmart app to filter our assortment based on your personal preferences,” per the post.

Walmart’s latest announcement shows a sense of confidence that its shoppers want more personalized, immersive experiences – at home and in stores.

“We believe the closest store to our customers is in their pocket, and we are focused on making that always-on experience as easy, engaging and personalized as possible,” said McKeel and Ainoa.

The “view in your space” feature uses haptic feedback as well, vibrating the phone when users drag furniture or decor beyond room boundaries. It was also developed with customers with disabilities in mind, per the post, with voice-based instructions for blind or low vision shoppers, and gesture controls for those with limited mobility.

This is not Walmart’s first step into AR technology, and it is focusing its efforts on both customers and store associates. A LinkedIn post from Walmart Global Tech’s Executive Vice President Srini Venkatesan last year discussed the launch of an AR tool “that instantly maps and tracks every box in the backroom for store associates,” allowing employees to avoid lifting each box to read content labels.

Other large retailers have been utilizing similar AR technology as well. Earlier this month, Amazon launched a new AR app feature for shoppers to virtually try on select sneakers. Beauty brand Sally Hansen released an AR nail polish try-on tool in February as part of a partnership between its parent company Coty and the technology organization Perfect Corp. Image sharing company Pinterest also released a home decor and furniture AR feature in February, with items from Walmart, West Elm, Wayfair, Crate and Barrel and more.

After appointing new digital leaders, Build-A-Bear Workshop, Inc. has redesigned its website with improved checkout, payment and product visualization features, the company announced.

The company enhanced the Bear Builder 3D Workshop tool to guide shoppers through the bear building experience, from stuffing their bears to finalizing their design. Shoppers can also choose from a wide selection of clothes and accessories to customize their bears, the company said.

The company added a buy online, pick up and store option to allow customers to pick up their bears at a local workshop. Deloitte Digital also helped the company modernize its website to improve how it showcases its products, shares events and promotions with shoppers and view the site across various mobile devices.

Build-A-Bear Workshop said it invested in marketing technology to provide a personalized experience for its customers. Jenn Kretchmar, the company’s chief digital and merchandising officer, said in a statement that it had grown its digital demand by 180% for the first half of 2022, up from the first half of 2019. 

“We want our guests to get the same wow factor they do when they walk into a retail store as when they engage with the brand online,” Kretchmar said in a statement. “Our website plays a critical role in the guest experience, from pre-shopping before visiting a Workshop location, to building and personalizing a furry friend online for home delivery. With the site’s enhancements, we will soon be able to show product availability specific to store locations, making same day delivery or in-store pick up gift-giving options even more seamless.” 

In addition to modernizing its website, the company has also shaken up its leadership to steer its digital direction. In November 2021, the company hired Char Nicanor-Kimball to serve as its vice president of e-commerce. The company also promoted Art Huggard from the director of e-commerce development to vice president of digital technology.

After suffering steep losses early in the pandemic, the company reported a 28.4% increase in Q1 2022 revenue to $117.7 million. The next quarter, it reported a 17.1% increase in total revenues to 218.3 million, the highest in the first half of the company’s history, according to its Q2 2022 earnings report.

“We continue to make progress on our strategic initiatives including accelerating a broad-reaching and comprehensive digital transformation, continuing to evolve our retail experience and footprint while optimizing our expanded omnichannel capabilities, and leveraging our solid financial position to invest in initiatives intended to drive growth and return value to our shareholders,” Sharon Price John, Build-A-Bear Workshop president and CEO, said in a Q2 earnings statement.

Alongside its digital investments, the company has been attracting in-store shoppers again. In an investor presentation, the company said that less than 60% of store visits are planned, and the top reason for visiting its stores is birthday celebrations. The company also noted in the presentation that it plans to add about 20 stores in North America this year and celebrate its 25th anniversary with exclusive events and products.

Grocery stores and hotels might at first glance seem to have little in common. But for Ryan Draude, the similarities are crystal clear.

Just as hotels offer rewards to people who regularly stay with them and take steps to recognize guests when they walk in, Draude, head of loyalty and digital for Giant Food, thinks one of the most effective ways food retailers can build ties with their customers is by turning grocery shopping into a personalized experience built around their needs and preferences.

To accomplish this for the Ahold Delhaize-owned grocery chain, Draude is looking for inspiration to his former role overseeing the frequent-guest program operated by lodging chain Choice Hotels International. Among his key takeaways from that job is that customers want to feel that a merchant appreciates them and is committed to helping them get what they want — and won't hesitate to leave if they spot a better option, Draude said.

For now, Draude is focused on using Giant Food's e-commerce program, Giant Flexible Rewards, to deliver personalized pricing, product recommendations and rewards to customers that also relate to their experience in the chain's stores. Later, the company may add technology to its locations that gives customers the ability to signal their presence in stores using a smartphone and then receive location-based promotions, he said.

"My biggest fear is if a grocery store opened up half a mile closer to my member's home than a Giant was, what are we doing [that is] so differentiated that would continue to make them drive that extra half a mile to go to our store?" Draude said

Giant Food is focusing on personalizing the shopping experience at a time when grocers are looking for strategies to maintain the momentum they have made connecting consumers with essential goods during the pandemic. 

Findings from a poll of 1,000 consumers Grocery Dive, Retail Dive's sister publication, recently conducted with market research firm Inmar Intelligence suggest that the grocery industry faces obstacles as it looks to convert customer relationships built in stores to online — especially where the center store sales that are key to grocers' bottom lines are concerned.

Three-quarters of participants in the survey said the center store is "absolutely" or "mostly" relevant to their shopping habits. But just 9% of respondents said they use their local grocery store's e-commerce service to shop this department, while more than nearly 70% indicated they turn to Amazon, Walmart, Sam's Club or Costco for their favorite center store staples.

Customization strategies built atop loyalty programs like the one Giant Food operates may hold at least part of the answer for grocers as they look to hold onto customers smitten by e-commerce, experts said. Grocers now have access to a variety of personalization tools, including customized coupons and promotions, shoppable recipes based on a customer's nutritional preferences and spending-related discounts. But retailers need to carefully test options and prioritize those that make it easy for shoppers to find their preferred products and also discover new items amid what can be an overwhelming center store assortment, sources noted.

Serving shoppers a selection of center store goods that they are likely to be interested in is critical to retaining their allegiance online and alleviating the "click and scroll fatigue" shoppers run into while online shopping, said Spencer Price, co-founder and CEO of Halla, a startup that specializes in grocery personalization technology. 

"A process of elimination to some extent is one of the most important parts of personalization because you don't want to be inundated with tons and tons of products that you know you're never going to try or buy," said Price.

Using analytics to offer smart substitutions when items are out of stock is also essential to building relationships with consumers, said Sean Turner, co-founder and chief technology officer of Swiftly, a startup focused on digital loyalty technology. In 2021, Walmart introduced online shopping substitutions powered by artificial intelligence, boosting customer acceptance of those items above 95% as a result.

"It used to be personalization was just about 'how can I get shoppers products that they're interested in at a good price?'" but that has changed as retailers look to build deeper relationships with customers, said Turner. Now, he said, grocers face the tougher challenge of convincing people they understand their needs and are ready to meet them — without making them feel like just another customer.

Another factor behind the growing interest among grocers in developing personalized customer relationships is that shoppers themselves have an unprecedented ability to track prices, putting pressure on retailers to closely follow their competitors to ensure their customization strategies remain relevant, experts said.

"Whatever response you're going to take — whether it's a price change, whether it's an assortment shift, whether it's a new promotional cadence or approach — it all demands tracking your competition with much more granularity because that's what ultimately the shopper is able to do now," said Ben Reich, founder and CEO of Datasembly, a California-based company that gathers information from e-commerce sites for clients, including grocers, through a process known as web scraping.

Building a grocery store for every customer

While brick-and-mortar grocers have added shortcuts that help shoppers find relevant products in center stores and other departments, they're only beginning to scratch the surface of what a truly personalized shopping experience can be, according to online grocers that specialize in this approach. 

Because they don't have storied brands and physical locations to build awareness, e-grocers are focused on offering new customized shopping platforms built around advanced technology like machine learning.

"Based on what I know about you, based on what I know you'll buy [and] what you won't buy, I can build a specific grocery store" for every customer, said Abhi Ramesh, founder and CEO of e-grocer Misfits Market. "That power exists in the digital universe in a way that can never exist in person."

Ramesh's company, which started three years ago in 2018 selling cosmetically defective produce, has since raised hundreds of millions of dollars to feed its ambition of becoming a full-fledged grocer. Every customer who opens Misfits Market's app sees a personalized assortment of foods determined by the company's in-house machine learning technology, and Ramesh wants to take that personalization to an even higher level.

The company's goal, Ramesh said, is to only show customers items that might interest them and cut out all the products they're not likely to purchase. In addition to providing a "less mentally fatiguing" grocery-shopping experience, such a high degree of personalization can also help prevent food waste by enabling Misfits Market to precisely determine what it needs to keep in stock and when to bring it to its facilities, he said.

"Every off-the-shelf piece of technology and software that exists today is all designed for kind of the old-school model of buy from distributors, bring the same standard product into your warehouse, send it from the warehouse to the grocery store," said Ramesh. "There's very little machine learning, very little predictive algorithms built on top."

Given that an online shopping trip can take just a few minutes, California-based e-grocer Farmstead places a premium on only showing customers products they are likely to be interested in, said Pradeep Elankumaran, the company's co-founder and CEO.

"You're taking an amount of time that this customer is willing to spend on your site and you are maximizing the relevance of the product shown to that customer to maximize the possible basket that they will shop with you," Elankumaran said.

Farmstead, which also offers technology and dark store services to grocers, accomplishes this in part by encouraging customers to subscribe to the staple goods they always buy so they can use their time spent on the company's website or app to discover new items, he said.

"You can't have a high basket just by showing people the same things over and over," said Elankumaran. "It becomes especially important that you're showing people the right things that really resonate with them while also surfacing the things that they probably won't [otherwise] get to see, but surfacing it to them in a more relevant way to capture the thrill of the hunt, which is a very real thing."

High-touch doesn't have to be high-tech

Gary Hawkins, CEO of the Center for Advancing Retail & Technology, pointed out that personalization strategies don't have to be high-tech. 

For example, a retailer could invite their best customers to bring knives to the meat department to be sharpened, Hawkins said. Another option would be to offer a customer who signs up for a loyalty program a tour of the store with a manager, he said.

"I've worked with retailers all over the world … and one of the things I found no matter what country I was in, no matter what culture I was in, [is that] we as human beings like to be recognized," Hawkins said.

Bob LaBonne Jr., president and CEO of LaBonne's Markets, a chain of four supermarkets in Connecticut, said one of the most effective ways to build bonds with customers is to give them a selection of treats — complete with a personalized letter from a store director — as a tangible show of gratitude. LaBonne's runs a points-based loyalty program that automatically sends customers coupons when they reach spending thresholds, but has discovered that giving people something they might not have bought is especially effective, LaBonne said.

LaBonne said he has found that distributing holiday gift baskets filled with items like nuts, snacks, olive oil and balsamic vinegar to especially loyal shoppers can go a long way toward making them feel special.

"Customers felt like we gave them a trip to Hawaii," he said.