Data is the sector’s most valuable currency. Yet all too often retailers don’t take full advantage of the quantity and quality of customer data at their disposal.

“They're collecting a lot of data, but what they don't tend to do very often is take intelligent actions off the back of it. The whole point of personalisation is that you can capture the exact needs of that individual customer,” says Martin Shave, retail industry lead for Microsoft Business Applications.

Brands that use data to its full potential are able to piece together a single view of the customer and use it to make effective marketing decisions. HSO’s Hickmott says these retailers and brands have “got the ability to engage with their customers in a way that creates a sense of magic. If you don't have that, you're going to be outgunned over time.”  

Many of our disruptors are raising the bar in their use of customer data to enable personalisation, which in turn drives customer loyalty. Bloom & Wild has put data at the very heart of its model, employing six data scientists among a 50-strong tech team to ensure the business has the right number of bouquets to sell in any one week, minimising waste.

“We figure out how many we’re going to sell based on traffic and marketing inputs, we track if we’re ahead or behind the cumulative curve of where we should be and recommend action based on that. If that message shows up saying ‘not available’ too often then we become less useful to our customers,” explains Gelbard.

Bloom & Wild’s algorithm can predict when a customer is likely to shop for a specific type of bouquet – for a family member’s birthday, for example – by monitoring saved occasions stored in customers’ accounts. It also calculates the optimum time to send out emails to prompt orders.

Pasta Evangelists takes a similarly scientific approach to optimising the customer experience. “We gather significant amounts of data about our customers' habits, likes and dislikes,” Lagun says. “For instance, we invite customers to rate the dishes they eat and provide us with comments – these are passed directly to our chefs so we can make targeted improvements to dishes that do not delight our customers.”

The company uses heatmaps to analyse website visits and understand which areas are most appealing and which need to be earmarked for redesign or improvement.

Data is also used to identify customers that might be on the verge of cancelling their subscription and initiate strategies for retention. “Through CRM and email automation we are able to contact customers when they display signs of lapsing or losing interest, to attempt to win them back with product launches. For instance, telling customers who have previously bought only plant-based products about our new vegan carbonara,” says Lagun.

Many subscription-based businesses use questionnaires and consultations to gain an initial picture of customers’ preferences and then use transaction data to build upon that knowledge base.

Skin + Me has put a heavy focus on its online consultation process, ensuring it captures all the personal, medical and lifestyle information a dermatologist would discuss in a face-to-face appointment. “The more customers that use our service, the more we learn from their behaviour, to refine and improve the experience,” says Jones.

“We’re incredibly privileged to really understand exactly what our customers want for their skin and we use that data daily, throughout the business, to drive all our decisions, from ingredient selection and formulation planning to packaging design and content ideas.”

The personal touch

New Bower Collective customers are invited to answer questions on its homepage to ‘build their own Bower basket’.

“We use this data on their unique household to tailor products to suit them,” says Hill. “By using data, we deliver the right amount of product to our customers at the right time.”

In the early days, Bower Collective took the opportunity to speak personally to customers on the phone after purchases to gather feedback. It would then combine these qualitative insights with data from Google Analytics to make incremental changes to the shopping experience. For example, the simple addition of a four-step infographic helped users better understand its reuse and refill proposition, which improved the website conversion rate.

Brands using data to improve the customer experience can’t afford to stand still in an ever-evolving consumer landscape. “When you're in success mode, you've got to invest in the basic infrastructure and modern way of operating – otherwise that’s you done,” says Hickmott.

Seasalt is one brand committed to continuously learning more about its customers and responding to their changing demands. At the end of 2020, it launched a renewed focus on data to help it gain a greater understanding of customer behaviour.

“We are using this insight to deploy targeted customer lifecycle retention campaigns and personalised experiences,” says Thom. “In 2021, we replatformed our website, allowing us to create distinct customer journeys. Our focus on data forms a significant part of our business plan through to 2025.”

For many businesses, the use of artificial intelligence goes hand-in-hand with the ability to personalise the offer. But there is still a place for a human touch.

“We really believe in the power of human curation,” says Vanderbilt from Bookshop.org. “Our site experience is centred on lists created by people, not algorithms – people who work in bookshops, love books and actually read and respond to titles before recommending them.

“While we will never be able to replicate the experience of going into an indie bookshop – and we suggest everyone does so whenever they can – we believe our lists bring a small piece of human curation and expertise to the online experience.”

One characteristic that unites all our disruptors is their commitment to ethics and sustainability. Responsible retail brands are increasingly having to interrogate every aspect of their supply chain and operation to ensure they minimise their environmental footprint and treat people with respect.

Those that fail to do so risk a backlash from customers. Retail Week research released in March 2022 revealed that the majority of consumers (55%) are more likely to buy from a retailer or brand with strong ethical and sustainable credentials. Gen Z, in particular, is more likely to be sustainability conscious when it comes to buying decisions.

Investors, too, are increasingly giving weight to businesses’ net-zero commitments.

Jones says sustainability was at the heart of Skin + Me’s decision-making process from day one. “We knew we wanted to design packaging that could give customers exactly the right amount of product every day, minimising wastage, and something that could be easily recycled, too. In addition, all of our formulations had to be vegan and cruelty-free.”

When the business looked at the packaging that was readily available, most contained high levels of plastic. “Most skincare products today still come in single-use plastic bottles with pumps. On average, they use six types of plastic and a steel spring – which makes it virtually impossible to recycle,” Jones explains. “So we invested a large amount of time and money in developing our innovative aluminium Daily Doser packaging in house, from scratch.”

Packaging is an area where subscription-based brands are stealing a march on more mainstream rivals, in part because the logistics of home delivery make it simpler to return packaging for reuse or recycling. Bower Collective customers, for example, simply decant the product into one of the company’s reusable dispensers and return the packaging in a pre-paid envelope.

Businesses are also making products last longer. Estrid’s razor is made from steel and can be reused for years, while the flexible nature of a subscription service means customers can get new cartridges delivered to their doorstep as often or as rarely as they like.

Meanwhile, Who Gives a Crap has put international development at the heart of its business model. It partners with a range of charities to provide proper sanitation in the developing world, with a focus on sustainable, scalable solutions.

Its partners include the NGOs Splash, which brings water, hygiene and sanitation services to children in the world’s densest cities; and Water & Sanitation for the Urban Poor, which works to prepare cities for urbanisation and addresses the current lack of services in informal settlements.

Businesses are also looking to build sustainability into the manufacturing process. Innocent’s new carbon-neutral factory in Rotterdam will use electricity from renewable energy sources, including solar panels and two on-site wind turbines. Water use will be reduced through the installation of a cleaning system that uses mostly air, rather than water. The water used on site will be returned to Rotterdam's water network through an on-site treatment plant, while rainwater will be used to flush the toilets.

For businesses looking for ways to reduce their environmental impact, Microsoft’s Shave says data can hold many of the answers. “All of your buildings and assets are constantly churning out data about things like energy and water usage. These kinds of things are now measurable so collecting that data and having a dashboard view of it is quite a simple thing to do. Once you have sight of that, you can take action and make improvements.”

Logistics is another focus for brands looking to reduce their environmental impact. Innocent, for example, is targeting transport emissions. Juice that needs to be distributed by road will be transported using the world's first heavy-duty, zero-emission electric trucks.

Meanwhile, Bloom & Wild is rethinking the traditional distribution model for flowers, which usually involves the product passing through a large number of hands between being cut and reaching the end recipient – a journey that can take 10 to 14 days. Each step adds cost and waste, which increases the environmental impact and ultimately shortens the life of the flowers in the vase.

To combat this, Bloom & Wild works with partner growers in Kenya that ship directly to a cargo airport in the UK, where the flowers are rehydrated and conditioned, packed and given to Royal Mail to be delivered within three days or less, meaning customers get to enjoy them for longer.

The brand has won plaudits from customers and other retailers for its responsible approach to marketing. Back in 2019, the business started receiving requests from customers to be kept off their Mother’s Day mailing lists. Now Bloom & Wild makes sure customers who have opted out see no products related to that sensitive occasion on the website or the app. It also began a campaign to bring other brands and businesses on board, gifting them with tools to remove mentions of certain products for customers. 

Concerns around the concentration of corporate power and inequality are also spawning new ways of doing more ethical business. Vanderbilt says Bookshop.org’s entire reason for existence is to try to provide consumers with a more ethical way to buy books online. “Our biggest commitment is to the independent bookshops who benefit from each and every sale on the platform and who receive the majority of the profits,” she says.

As sustainability and ethics rise up the priority list for consumers, brands need to be on the front foot. Not only must their business models stand up to scrutiny, but they must learn how to communicate this to customers and leverage it as a point of difference.