Becoming the Netflix of retail

  • In association with VMob
  • October 7, 2015
  • Scott Bradley
Becoming the Netflix of retail
Image: Kerryn Smith

In this difficult environment, marketers are no longer focused solely on advertising and promotions; they now own customer experience and all its massive impact on the bottom line. Having only just got to grips with the idea of 1:1 communication using targeted emails, retail marketers have had to rapidly evolve and invest heavily in customer-centric innovation, starting with mobile.

The retailers that succeed in this increasingly mobile age will be those that best meet the needs of their customers, and those best equipped to do that will be the ones that can actually anticipate what their customers want, whenever and wherever they want it. This drive towards personalization has led to data-savvy organizations using unprecedented amounts of live customer data; building relevancy algorithms that drive engagement by delivering the content most relevant to each individual. And the company blazing the personalized service trail? Netflix.

What Netflix does well

Netflix analyzes thousands of data variables to classify users based on their preferences for film and television; enriching each piece of content with huge amounts of metadata to help describe it in very granular detail, then combining that with customer data. When a customer opens Netflix  its algorithms instantly process a huge range of facts about that person including time of day, the day of the week and what they have previously watched or previewed.

The algorithm can now look at all the content that similar people have watched under similar circumstances and suggest the shows and films that are most relevant to that customer right now. The more relevant it is the more likely they are to watch, the more they watch the more engaged they become, and the more engaged they become the less likely they are to churn. Today, more than 75 percent of all the content viewed on Netflix was suggested by the Netflix algorithm.

The key to ongoing engagement is continuous refinement of the algorithm and ongoing data collection; Netflix must constantly personalize its service and recommend relevant content. If I've watched everything in my queue and there's nothing new being recommended, where's my incentive to come back? Powered by its intelligent use of massive data, Netflix successfully meets the expectation of a personalized experience at every touch, and critically, provides that service without making the customer work for it.

Becoming the Netflix of retail

Retailers should be focused on using technology innovation to invisibly enhance the customer experience. Relevancy algorithms powered by real-time customer data from a multitude of connected devices can ensure that shoppers encounter relevant recommendations at every possible interaction point: the experience I have is shaped by every experience I've had before, and different from every experience everyone else is having – it's completely personalized to me.

Applying the Netflix lesson to the real world

The most unique opportunity mobile brings to retailers comes at the very end of the purchase process - the checkout. When we combine the data collected along the customer journey with that last critical piece of transaction data, we can do really useful things. Now we know which promotion resulted in a sale, how long it took to close that sale, and what else a customer purchased at the same time. We also have the contextual data that shows us what other factors played a part in that sale - location, weather, app usage, social, public transport and local events.

This means that within this one data set we now have a true picture of the cost, value and context of each promotion a retailer is running. And it’s with that data that the marketing program can be extended to actually predict outcomes and recommend promotions that will best engage customers and achieve bottom line goals – a la Netflix.

This story was originally published in NZ Retail magazine issue 739, August/September 2015.

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.


Countdown’s top team members honoured at its annual trade show

  • News
  • September 22, 2019
  • The Register team
Countdown’s top team members honoured at its annual trade show

Tom Jones-Griffiths from Countdown Newmarket is the grocery chain’s Store Manager of the Year 2019. He was recognised among other winning team members in a ceremony at the company’s annual trade show in Rotorua.

Read more

A temporary slowdown

  • Opinion
  • September 21, 2019
  • Satish Ranchhod
A temporary slowdown

Westpac senior economist Satish Ranchhod discusses how household spending growth has slowed in early 2019.

Read more

Pams Pantry: The groundbreaking convenience store shaking up rural Canterbury

Dairies have a special place in the hearts of heartland New Zealanders, but now there’s a new format in town.


Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

Concept to closet
Business coverage of New Zealand Fashion Week.
Regional rollercoaster
What does retail look like in 2019 for ...
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
The future is bright
We spoke with four retailers in their twenties ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...

Diamonds in a rhinestone world: How jewellers are holding fast

Pricier products from retail’s apparel segment are often described as an ‘investment purchase’, but finance professionals would disagree on most counts – except when it ...


Come and celebrate our industry with the who’s who of retail

  • News
  • September 19, 2019
  • The Register team
Come and celebrate our industry with the who’s who of retail

Our Gem Retail Hotlist is about celebrating the vitality and innovation of New Zealand’s retail sector. Get your free ticket and join our industry’s top retailers for the networking event of the year.

Read more

The simple excitement of inflatable advertising

  • News
  • September 17, 2019
  • Courtney Devereux
The simple excitement of inflatable advertising

Our advertising landscape continues to rotate around the growth of digital and how digital can be used to further capture the attention of viewers.Yet there is one type of adverting so simple, so primal, so no-nonsense that even in this computer run society it has survived. We’re talking here, about inflatable, or balloon, advertising.

Read more
Next page
Results for
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

The Register

Content marketing/advertising? Email or call 022 639 3004

View Media Kit