2019 Hyper-Localization Strategies for Success in Retail

Go local with your CRM strategy to boost long-term shopper loyalty.

By Sandra Gudat,
President/CEO

retail localization women shopping

According to a Salesforce study, more than 75% of customers expect companies to understand their needs and expectations.1 What’s more, a report from Epsilon showed 80% of shoppers are more likely to buy from a brand that offers a personalized experience.2 One of the hottest ways to engage customers today and leverage personalization is through hyper-localization.

A hyper-localization approach includes a wide range of tactics, from brick-and-mortar staff making personal recommendations, to mega brands offering products and services that meet local demand, to retailers sending customers localized offers on their preferred channel at the right time (and in real time).

Read on to learn more about what your organization stands to gain by adopting a hyper-localization approach, and how you can integrate these strategies into your retail campaigns.

The Benefits of Localization in Retail

Incorporating hyper-localization — also referred to as extremely well targeted personalization — into your CRM strategy is an important step toward driving growth and giving your brand a competitive edge. Here are some ways that retail localization can positively impact your organization and your brand.

  • Increase operational efficiency: Stocking stores with the products customers want at a local level minimizes returns and results in more satisfied customers
  • Provide a more relevant and rewarding experience by helping to ensure that shoppers find the products they want, when they want them
  • Improve the customer experience and boost brand loyalty by making customers feel more valued and therefore more connected to your brand and the community
  • Gain more insights into customer behavior through real-time interactions
  • Increase sales by offering a selection of products, services and experiences that are most relevant for each individual store

5 Hyper-Localization Strategies for Success

Retailers of all sizes — and budgets — can bring localization into their CRM strategy. For a national retailer, this could mean stocking an assortment of products aimed toward a certain demographic. For a mom-and-pop retailer, it might mean sourcing locally produced services and products. Above all, though, it’s crucial to understand who your customers are to deliver a more personalized shopping experience. Below, we share five hyper-localization strategies you can use to build stronger (and more profitable) relationships with your customers.

1) Combine personal information with location information to deliver more locally relevant messages.

Consider layering a customer’s personal information, such as name and interests, with information like demographics and location to create hyper-localized communications. A popular hyper-localization tactic is to utilize weather information. For instance, a shoe retailer may begin to advertise sandals in its warm weather store locations while still advertising boots at their locations in colder climates.

Using AI and GPS capabilities, retailers can take it a step further by using local weather data to deliver a specific personalized offer to a shoppers’ smartphone. For instance, if rain is in the forecast for a specific geographic area, you can promote a selection of umbrellas or rain boots at nearby locations.

In another example, Shoe Carnival leverages demographics and shopper behaviors in real time to keep tabs on margins at the local store-level. Based on current store traffic and shopper demographics, store managers create on-the-spot offers via a microphone, often updating offers on an hour-by hour basis.

2) Use customer data to understand your customers on a deeper level.

Get to know who they are and how their tastes, interests and shopping behaviors may vary based on geographic location. For instance, do you have locations where many customers are price conscious, highly affluent or represent a specific ethnicity? Do you have a store in a college town where locals love to show off the school colors? Leveraging your customer data can better inform localized preferences and guide inventory purchasing decisions.

For example, Nike developed a Nike Live concept store in southern California, driven entirely by local loyalty member data. Store inventory includes Nike best sellers in addition to city-specific styles based on nearby ZIP codes.

In another example of hyper-localization, global retailer H&M leverages shopper data to customize inventory at individual store locations. By using technology to analyze store receipts and loyalty card data, the retailer has been able to minimize returns and maintain better control over supply and demand. For instance, data may reveal that skirts are more popular in one store, but less appealing to customers in another location.

Keep in mind that for mega retailers, this doesn’t mean that you must localize the inventory at every single store. By blending a large selection of what’s available across all stores, with a minimum assortment based on local relevance or known customer preferences, you’ll show your customers that you understand what they’re looking for. This type of retail localization can enhance the shopper experience and help you build stronger relationships with your customers in every location.

3)Leverage customer insights to personalize your physical stores.

Stock different types of merchandise in different locations that appeal to that geographic and/or demographic segment. This allows your organization to offer the products and services that are most relevant for the customers of a particular store. Amazon’s brick-and-mortar bookstores do this successfully by using data from online shoppers to stock their physical store shelves. Books are displayed based on what’s popular in the region and state, while also including national best sellers.

In another example, retailer West Elm promotes products from local designers in several of their stores, to tie inventory to local shoppers and become more connected to their community.

If the idea of embracing a retail localization approach feels daunting, try a small test first to get your feet wet. For instance, you could pilot a local assortment of merchandise in-store or online and gauge customer response. Or, decide on a percentage to devote to local merchandise, such as 5%, and monitor customer feedback. As another tactic, consider reaching out to local designers and artists, and feature a selection of their products in your store.

4)Seamlessly blend the online shopping experience with dedicated in-store service.

This allows you to deliver a more personalized experience — in essence, bringing the global online experience down to the personal, local level. Retailer UNTUCKit leverages a smartphone app to deliver an unlimited selection of apparel with localized service. For instance, a shopper orders online and picks up in store. The store associate has all the customer information, allowing them to greet the customer by name and even suggest additional items based on personal preferences and shopping history.

In addition, if a shopper finds an item they like in a store, but the item isn’t available in the right size or color, UNTUCKit store associates can quickly access inventory from any one of their stores to help complete the sale while the customer is still in the store.

To improve retail website localization and create a more seamless shopping experience, Walmart underwent a website redesign to feature both national and local merchandise. When a shopper visits Walmart’s website, they are shown the top selling items available at their closest physical store location, while being able to search for any items on Walmart’s site.

5)Ensure that your hyper-localization approach aligns with your overall brand strategy.

Before enacting a hyper-localization strategy, ensure that all levels and departments in your organization are on board with this approach. Consider the resources and process changes that may be required, such as new technology to optimize and automate floor plans and assortment optimization. One key to success: Give front-end staff easy access to customer data so they can engage shoppers on the sales floor.

Pet Supplies Plus is an example of a national retailer who gets this right. Part of their overall corporate strategy is to build stronger connections with shoppers by ensuring that each store has a local feel. They focus on local advertising, staying within the surrounding neighborhoods of each store. They also personalize customer experiences based on shopper spending patterns and geographic trends. For instance, stores in the sunny south may promote year-round flea and tick prevention, while stores in the colder northern states might advertise their selection of sweaters and booties for most the year. Franchises also have the capability to personalize offers through the Preferred Pet Club loyalty program and on their website.

The Value of Hyper-Localization in Retail

Retailers that include a hyper-localization approach as part of their overall marketing strategy only stand to benefit — by gaining a deeper understanding of their customers’ shopping habits and their communities. And the more retailers can use those insights to anticipate shopper needs, the better positioned they’ll be to meet shopper expectations, ultimately leading to long-term loyalty and increased sales.

The experienced retail strategists at CCG have been helping retailers build long-term customer loyalty for more than four decades. Our retail marketing services include customer research, data analytics and proprietary loyalty optimization tools — helping retailers gain accurate insights into the specific interests and needs of their customers. For a free consultation, click the button below or call us at 303.986.3000 to start a conversation today.

Sources

1 “State of the Connected Customer,” Second Edition, Salesforce Research, published 2018,
https://www.salesforce.com/content/dam/web/en_us/www/documents/e-books/state-of-the-connected-customer-report-second-edition2018.pdf

2 “The Power of Me: The Impact of Personalization on Marketing Performance,” Epsilon, published January 9, 2018, https://www.slideshare.net/EpsilonMktg/the-power-of-me-the-impact-of-personalization-on-marketing-performance/1

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