Retail Personalisation Driving Business Differentiation

The global personalisation solutions market is expected to grow massively to $2.2B toward the end of 2026. Consequently, Industry ARC recently released a report projecting that the personalised recommendation engine’s market size is to reach $12.03B by 2025, a whopping 95% increase from the $1.14B in 2018.

These figures point towards increased demand for personalisation in businesses. Personalisation is nothing new. Cast your mind back and consider the shops or places you frequented some years ago - do you recall how the owner would know your name and preferences?

Particularly over the past five years, personalisation has become vastly more important, relevant and necessary as a business must-have. National brands, FMCG providers and private labels have to leverage personalization to meet consumer expectations because eCommerce giants like Amazon and Alibaba have driven up standards by implementing hyper-personalisation, thus impacting what customers have come to know and expect.

Amazon Personalise, by the online marketplace giant, is a great example to demonstrate how personalised marketing is done. It enables developers to build applications with the same ML technology used by Amazon.com, offering real-time personalised recommendations for users. With this solution, Amazon goes beyond personalisation towards individualization, superior because it takes into consideration every touchpoint along the customer journey.

“For personalisation, we need to have automation and 360-degree visualization to manage customers online.” - Anupong Tasaduak (Tao), VP, Data and Digital Marketing - eCommerce Business, BIG C Super Center PLC

Personalisation is More Crucial Now than Ever Before

The increased e-commerce shopping which escalated during the pandemic gave consumers more exposure to highly personalised experiences, from marketplace giants like Amazon and Alibaba offering personalized recommendations to FMCG providers and private label brands. Now, the bar has been raised and consumers expect similar standards of personalisation from all brands.

With the introduction of personalised recommendations to shoppers, Alibaba recorded a massive gross merchandise volume of $30.8B in just 24 hours during the “Singles Day” shopping festival in 2018. By March 2022, Alibaba had a market cap of $225B. Alibaba continued with the pursuit of offering more personalization, introducing the AI OS online service platform that combines personalized search, advertising, and recommendations. With Alibaba paving the way ahead, FMCGs and private labels are under pressure to improve on personalisation to maintain a competitive edge. The concept of personalisation is about creating personal experiences and interactions for customers. It is based on data collected from a customer’s browsing information, past purchases, personal information, and geographic location.

In 2023, if we look closely, we will find the conversation shifting from personalisation to individualisation. A more advanced concept, individualisation requires richer data to understand customer behaviour and speak to each customer individually. With individualism, brands are moving from segmented personalization to focusing on providing an individual with truly personalised, context-sensitive experiences.

“Push notifications definitely play a role but your message needs to be super strong because you only have that one little mark where you need to tell your story. The more personalized that you can make it the better.” - Milou Steenvoorden, Global Senior Director - Consumer Engagement, Adidas

Let’s dive into how FMCGs, private labels and national brands are leveraging personalisation, especially with personalised marketing, to perform well against the competition.

Personalization driving sales in FMCGs

For many decades, the FMCG industry developed standardised products with centralisation and a specific distribution network to lower costs and maximize profits. Now, with personalisation on the rise, companies have to create more value for consumers while still making profits.

In 2020, Cadbury launched a campaign with the “Idomoo Personalized Video” platform to connect emotionally with consumers and expand their market in India. The campaign was promoting the idea of Cadbury chocolates as a gift.

Idomoo personalized video engagement platform, Image source: https://www.idomoo.com/blog/idomoo-introduces-personalized-video-engagement-platform-to-accelerate-brand-consumer-connection/

Through the personalised video platform, customers were able to create personalised videos with names and photographs from their Facebook profiles. You could visit the Cadbury Glow page, link it to your Facebook profile and enter the contact address of the gift recipient.

On receiving a box of Cadbury Glow chocolate, the recipient could view the video by entering their contact. Amazingly, about 90% of the recipients watched the personalized videos to the end and 12% shared these videos online.

With this personalised video marketing campaign, Cadbury saw a 65% click-through rate (CTR) and 33% rate of conversation. Cadbury leveraged data to connect with consumers and establish a lasting brand impression.

As the Senior Marketing Director, Anil says, the campaign enabled the company to strengthen its connection with consumers. It opened an opportunity for them to engage with the brand deeply and improve brand loyalty.

Private labels Personalization

In the past few years, there has been a huge consumer shift towards private label brands. This shift was caused by a pivot towards private label products during the pandemic when people were stocking up on items and sought more affordable pricing and value.

The statistics by Oracle show that 50% of the shoppers in APAC region find more value in private label products. Retailers can now achieve about 30% higher profit margins with the private brands compared to the national brand products.

During the peak of the Covid-19 pandemic, NTUC Fairprice, a Singapore-based Mass Grocery Retailer, reported a 25% increase in private label product sales. In the same period, NTUC introduced Meadows, a private label product line that proceeded to top its sales chart having been received with immediate success.

Private labelling offers advantages that make personalisation easier. The main advantages include product ownership and control, and flexibility which allows brands to create personalised products. By analysing consumers' specific needs, you can determine which products you should add to the business' private label portfolio.

Fairprice says that when the demand for ART kits increased in the Singapore market, the national brands were going for S$10. Guess what? Fairprice brought in a private label ART Kit and priced it under S$5. Private branding allows you to highlight product attributes that speak to your target consumers. When paired with customers' search trends, shoppers can easily find your private label products that meet their needs.

Fairprice also introduced a mobile app, “FairPrice@SingPost”, which provides customers with personalised promotions and product offers according to data collected from previous purchases. These offers are based on the individual customer’s preference.

The mobile app requires the customers to scan the products they’re buying to make payments, making it possible to track, record and analyze customer preferences. FairPrice says they’ve been able to increase their private label brand sales through this experience.

NTUC FairPrice mobile app allows customers to make payments by scanning the products.

Image source: https://www.fairprice.com.sg/go-digital-in-stores/pay-via-the-fairprice-app/