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Why Retailers Need Personalization – Tips & Strategies


“Personalization is the key to cutting through the noise and making a meaningful connection with customers.” – Angela Ahrendts, Former SVP of Retail at Apple



Imagine walking into a store, and everything, from product recommendations to interactions, feels perfectly tailored to your preferences. That’s the beauty of personalization.

This article discusses why personalization is a crucial strategy for retailers, regardless of their size. We’ll take cues from retail giants like Walmart, Costco, Kroger, and explore the data underlining its significance.

More importantly, we offer practical tips tailored for small and medium-sized retailers, empowering you to create distinctive, memorable experiences that enhance customer loyalty and set you apart in your local market.

What is Personalization in Retail?

Personalization in retail is the practice of tailoring every aspect of a customer’s shopping journey to provide a unique and customized experience. It uses real-time intent, historical data, and analytics insights to understand and meet individual customer needs and preferences.

Effective personalization creates emotional connections with customers, increasing loyalty and higher returns on marketing investments. It’s an essential strategy for modern retailers to enhance customer satisfaction and drive business success. 

Personalization at Walmart

Walmart aims to customize the customer journey by prioritizing mobile shoppers with personalized product suggestions and a streamlined, single-page checkout process. For example, Walmart has designed the website with tablet users in mind, featuring large buttons and swipe-friendly elements.

Personalization is a key focus at Walmart. The retail giant draws from online and in-store data to provide relevant content and improved product recommendations.

Personalization at Kroger

“Kroger pioneered the personalization approach because we wanted to understand how customers engaged with our offers to make them better and more relevant. Our best-in-class data science program creates personalized experiences that provide important savings on the very specific items we know our customers love.” – Yael Cosset, Kroger’s chief information officer


Kroger has significantly advanced its personalization efforts by investing in data and innovation to enhance the customer experience, resulting in $1.4 billion in savings for customers over the last year.

Kroger’s innovative approach focuses on understanding how customers engage with offers to create personalized experiences that cater to specific items customers love, increasing overall satisfaction.

For instance, a recent study found that shoppers who used coupons were 33% more satisfied with their shopping experience. By effectively targeting coupons to customers’ preferences, Kroger ensures more relevant and satisfying promotions, demonstrating their commitment to enhancing the shopping experience.

Why is Personalization Important to Small to Medium-Sized Retailers?

Personalization enables small and medium-sized (SMB) retailers to adapt to rapidly changing customer preferences, increase customer confidence, and improve competitiveness in local markets. For instance, Costco is a prime example of effective personalization in retail.

Costco uses personalization to offer exclusive memberships with tailored deals and rewards based on individual customer preferences, creating a sense of belonging. In-store, they strategically lead customers through various samples and surprises, making shopping memorable and boosting impulse purchases. Furthermore, Costco’s lenient return policy simplifies the post-purchase phase, ensuring customer satisfaction.

The company’s data-driven approach prioritizes customers and plays a crucial role in their long-lasting success. Small and medium-sized retailers can follow Costco’s lead by understanding their current customer experience (CX), identifying gaps, aligning their CX vision with overall strategy, and prioritizing specific, actionable projects.

What does the data tell us about Personalization in Business?

The results of business and consumer studies demonstrate the critical nature of personalization in retail:

  • 89% of marketers see a positive ROI when they use personalization in their campaigns (Source: Adobe)
  • 76% of consumers say they’re more likely to purchase from brands that personalize (Source: McKinsey)
  • 52% of consumers agree that personalization improves brand satisfaction (Source: Twilio Segment)
  • 66% of customers expect brands to understand their wants and needs (Source: Salesforce)
  • Companies that get personalization right have the potential to generate 40% more revenue (Source: McKinsey)
  • 43% of executives list personalization as a top reason for investing in hybrid experiences (Source: Deloitte)

How Can SMB Retail Stores Take Advantage of Personalization?

Small-to-medium-sized retail businesses can enhance the customer journey through personalization. This means creating unique experiences tailored to individual customers.


“Small retailers enjoy a distinct advantage when it comes to product personalization for one simple reason — consumers already see local and independent stores as being better equipped to create personalized experiences than large retailers.” – Travis Nagle, co-founder of Stem and Viesso.


Customers today expect personalized experiences throughout their interactions with a retailer, and it can lead to greater customer loyalty and revenue growth. Here’s how SMB retail businesses can make it happen: 

 1) Craft Customized Responses

Create a catalog of tailored offers for common customer behaviors. For instance, if a customer in your store frequently checks a particular product, offer them exclusive deals related to that item. 

2) Seamless Campaign Planning

Establish a streamlined campaign coordination process to ensure consistent messaging across various communication channels, such as in-store promotions and social media. 

3) Hire the Right Talent Mix

Find a blend of data-savvy employees and tech-savvy marketing professionals who understand the local market. Set the tone for a culture of personalized service from the top down. 

4) Start Small and Adapt Quickly

Begin with simple, effective strategies that enhance the local shopping experience. Continually measure and adjust based on customer feedback to refine your approach. 

5) Develop Partnerships with Local Suppliers

Collaborate with local suppliers to shift from broad promotions to personalized offers for the community. Ensure these relationships benefit both your store and the supplier. 

6) Leverage External Expertise

Partner with local personalization experts who understand the unique dynamics of your market. They can help your store accelerate its efforts to offer more tailored experiences.


Applying these strategies, SMB retailers can provide more personalized customer experiences, create customer loyalty, and stand out from local competitors.




“It comes down to relevancy. Being more personalized leads to more relevant offers, and differentiation for customers based on their engagement and investment in a particular brand.” – Stefan Ivic.


In the rapidly evolving retail landscape, personalization isn’t just a nice-to-have; it’s a must-have strategy for businesses to thrive.

When retailers actively harness the power of data-driven customization, SMB retailers can create meaningful connections with their customers, nurturing loyalty and driving growth.

In sum, businesses that master this art of personalization will set the bar for the next generation of retail.


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