Seventy percent of consumers like to see some form of personalisation from marketing communications, according to market research by SAP Emarsys, while 44 percent expect personalised offers or discounts in exchange for their loyalty to a brand. What’s more, according to research from management consultancy McKinsey & Co., companies that excel at personalisation generate 40 percent more revenue from those activities than average players.

SAP Emarsys, an entity of leading software producer SAP, is an omnichannel customer engagement platform that builds, launches and scales personalised marketing campaigns across digital channels. The company works with more than 1,500 brands, including the likes of Adidas Runtastic, Aldo, Brand Alley, Harrods, Innovasport, Puma, Reformation and Zumiez.

To power personalised marketing campaigns, SAP Emarsys collects customer data to create AI-powered analytics to measure and drive business intelligence on the end-consumer. This streamlines the customer lifecycle management to grow acquisition, lifetime value, purchase frequency, average order value and retention.

Customer campaigns to drive loyalty are enhanced by SAP Emarsys’ partners such as communications platform Sinch, with whom the company educates customers like Harrods on best-in-class practices such as conversational channels and how to boost customer engagement via WhatsApp and other channels. SAP Emarsys users can also now take advantage of generative AI-powered tools through its ‘AI Subject Line Generator,’ enabling marketers to streamline their communications and customer engagements.

These initiatives are elements of the overarching omnichannel strategy which SAP Emarsys empowers marketers to adopt. Resources like The Omnichannel Difference, published in partnership with research and advisory company Forrester, highlight the benefits of embracing this approach. Key findings note that 89 percent of organisations will prioritise “personalising experiences across channels/touchpoints” over the next 12 months. The report concludes that omnichannel “isn’t a nice to have, it is a business critical”.

Now, BoF sits down with Emarsys CEO Joanna Milliken, to further explore how the company is leveraged by fashion and beauty businesses to drive customer loyalty and engagement.

What are the core aspects of SAP Emarsys’ omnichannel strategy for fashion and beauty clients?

The world moves quickly — there’s a new channel preference every day, so being adaptable is at the core of our strategy. Each customer has unique challenges — thus, ensuring that they are growing, while remaining responsible to business and being equipped with the tools to be nimble and move quickly, is important to us.

Connection is another critical aspect. Our approach is tailored to each industry — but regardless, we want to make sure that when it comes to our solutions, everything is connected. Our customers work with a large partner marketing ecosystem and it is important that they can connect those solutions with their core marketing automation solutions such that they can be fully empowered to maximise value for their customers.

The solutions we offer have to be insightful — another core pillar — which is all about being AI-driven. This means we can provide the necessary insights that marketers need to understand what they should do next, which variables to change, or which combinations of factors work best.

Why is personalisation critical in brand marketing today?

How personalisation is executed has changed a lot, but the desire and the intent for personalisation from marketers has been pretty consistent. That is because it shows a customer that you are listening. Customers are also smart — and understand the concept of a value exchange. If they are giving you all this information in order to download and use your app, they expect you to use it responsibly.

How can brands leverage SAP Emarsys to enhance customer loyalty and engagement?

When we look at metrics like customer lifetime value, we are looking for sincere engagement with the brand and customers that default to using that brand or that product — loyalty is the ultimate outcome. But there are many different types of loyalty, which we track in our yearly SAP Emarsys global Customer Loyalty Index: there can be active or “true” loyalists, actively promoting something on your behalf; there can be “silent” loyalists who have used a product for 20 years, but not necessarily advocating for it; there are “incentivised” loyalists that are only loyal based upon price and promotion. Understanding those insights, combined with AI, becomes useful in knowing what levers are the right ones to adjust for your business.

Through our research, we are seeing that loyalty is on the decline, because price and product are not the only factors that businesses need to compete on. They must also compete on that overall experience — and that is where differentiation can be found.

Meeting your customer on the right channel, finding out where they spend their time, where they want to engage and showing that you are listening to that and honouring those preferences by delivering content that is relevant to them, can increase customer loyalty. You are removing all the friction such they can enjoy each of those brand interactions.

Take for instance our new Mobile Wallet channel, which has been adopted by customers like City Beach and many more globally. If you sign up for loyalty on a website, you immediately get that loyalty card in your wallet. As a result, our customers have permission to continue to communicate with the consumer that way. Adding these new channels is driving uplift, both in terms of traffic back to websites and increased purchases.

How do you work with other leading service providers to boost brand partners’ experience through SAP Emarsys?

Mention Me are customer advocacy marketing experts and a technology partner of SAP Emarsys. We marry our expertise to empower businesses to understand their customer base through not only their purchasing behaviour but also their advocacy actions such as referral and reviews. Through unique advocacy data and insights, Mention Me enables brands to drive incremental revenue and increased profitability — and SAP Emarsys can utilise these insights for enhanced customer engagement and personalisation

For example, in 2021, global sports brand and SAP Emarsys customer, Puma, was looking to transform its fanbase into a key growth driver for their direct-to-consumer channel to achieve two goals: acquiring new customers and nurturing brand advocacy and loyalty. Through our partnership with Mention Me, they identified their biggest advocates and loyal customers. Results so far from Puma’s referral programme include: delivering six times ROI (following six months of optimisation); referred customers are four times more likely to introduce new customers; while 10 percent of referrals convert into new customers.

Why is the adoption of AI capabilities critical for marketing organisations’ success?

Marketing organisations now and in the future are going to face challenges if they are not leveraging AI solutions because of the need for speed to market. For example, AI-powered subject line generators can help marketers when they might otherwise have spent hours thinking up the right subject line for an email. Every brand needs to move faster and AI allows them to automate many tasks, but also glean the necessary insights in order to do that effectively.

Through our research, we are seeing that loyalty is on the decline, because price and product are not the only factors that businesses need to compete on. They must also compete on that overall experience.

Data is the currency of AI, so when you are using a marketing solution like SAP Emarsys, we are collecting all of that data. You need advocacy data, Enterprise Resource Planning (ERP) data and supply chain information, customer behaviour data — all of that has to be brought together in order to make actionable and leverageable solutions.

If you are not able to do that as a business, then you can’t feed the AI to generate the results you need to make the correct decisions. For example, we help our customers predict the best time to launch their campaigns based on past consumer behaviour in different time zones. We can provide AI-powered insights on segments and audiences for past performance, as well as future predictions of what they are going to do. We are constantly trying to find places where AI adds immediate value.

What insights can you share on the evolution of the customer journey?

We have a report that we did in conjunction with research and advisory company Forrester called ‘The Omnichannel Difference’, which is designed to map out various stages of the customer journey and offers insights into what is happening there. For example, we studied customers’ pre-purchase journeys and found that 50 percent of customers are struggling with websites and chatbots.

The report also found that there is an overreliance on third-party channels such as social media and digital advertising. Email, mobile and direct mail are less popular with marketers even though they are better sources of first-party data. When used effectively, these channels are sufficient to inform omnichannel strategy without reliance on third-party data.

The report provides insight back to the customers about the importance of being effective when you are using those channels, the real time engagement and also the inherent need that we all have for human interaction from time to time as well.

What is the next strategic business focus for SAP Emarsys?

We are experiencing one of the most rapid technological revolutions of our lifetime. We have used AI solutions for a long time and I think we have been taking them a little bit for granted — a huge part of our efforts are around continuing to put AI first for our customers.

Additionally, we want to continue making it easier than ever to adopt all the new channels for marketing. We provide mobile solutions, SMS solutions, mobile wallet, website personalisation and TikTok advertising. As a result, customers can try and test new channels more easily with our help. Supporting them with overall adoption is going to be key for us.

This is a sponsored feature paid for by SAP Emarsys as part of a BoF partnership.

The American Apparel & Footwear Association has called on Bangladesh to end a crackdown on labourers, following protests over changes to the country’s minimum wage for garment workers last fall.

More than 100 garment workers and labour advocates were jailed between October and November amid violent demonstrations, according to labour groups. Thousands more have been threatened with detention, according to AAFA.

In an open letter to Bangladesh Prime Minister Sheikh Hasina, the US trade group called for protestors still held in detention to be released and for the government to investigate violence that led to the deaths of workers during the demonstrations.

Bangladesh is one of the world’s largest apparel producers and a increasingly significant supplier to the US market.

Learn more:

A ‘Climate of Fear’ in Fashion’s Supply Chains

The killing of a union leader in Bangladesh this summer has heightened anxiety over the risks facing labour organisers amid a broader, often violent, crackdown on labour rights.

Hermès is being accused of unlawful “tying” in a class action lawsuit in the US.

Two California shoppers allege they were required to buy ancillary products from other categories (such as the brand’s apparel, scarves and homeware) before being allowed to purchase the Paris-based brand’s sought-after Birkin handbags.

Counsel for the plaintiffs claim that Hermès is in violation of US antitrust regulations, which define certain practices of bundling goods or tying them to other purchases as an abuse of market power.

”The tying product, the Birkin Handbags, is separate and distinct from the tied products, the ancillary products required to be purchased by consumers,” the complaint reads. “Plaintiffs have alternative options for the ancillary products and would prefer to choose among them independently from their decision to purchase Birkin handbags.”

The complaint points to the company’s commission structure for sales associates as evidence of the alleged scheme: store staff do not receive a commission on Birkin handbags, and as such are compensated based on how effectively they push other styles or categories, according to the complaint.

On handbag blogs and social media, Hermès buyers have reported for years that as the company (and demand for its iconic bags) has grown, sales associates have become increasingly strict about only offering Birkins and Kellys to clients who buy heavily across other categories.Hermès denies the practice: “Hermès strictly prohibits any sales of certain products as a condition to the purchase of others,” the brand told BoF last year. CEO Axel Dumas has acknowledged, however, that stores are encouraged to vet buyers and attribute the sold-out bags only to “real” clients as the company seeks to thwart an explosion of resale activity for its products.

Hermès isn’t the only brand that has been linked to such practices. Dealers of watchmaker Rolex have been accused of requiring shoppers to buy from sister brand Tudor first.

Learn more:

Case Study | Inside Hermès’ Best-in-Class Leather Goods Strategy

How a unique approach to supply chain, design, communications and retail has powered blockbuster demand for iconic bags like the Birkin and Kelly, enabling the French leather goods house to face down rivals and become a global megabrand with a market capitalisation greater than Nike’s.

Kering SA shares tumbled after the French luxury group warned that sales at Gucci, its biggest brand, have fallen about 20 percent in the first quarter.

The stock dropped as much as 14 percent in early Paris trading, wiping more than €7 billion ($7.6 billion) from its market value.

The Gucci sales slump, owing to a steeper-than-expected decline in the Asia-Pacific region, widens the gap between the company and its stronger rivals. The fashion group has been trying to revitalise Gucci, the Italian label that accounts for about two-thirds of profit, without success.

Controlled by the billionaire Pinault family, Kering has struggled to keep up with rivals like LVMH Moet Hennessy Louis Vuitton SE and Hermes International SCA as luxury sales have cooled over the past year, especially in China. LVMH’s broader brand portfolio and Hermes’s long waiting lists for handbags have made those companies more resilient.

“Gucci has been encountering some company-specific problems for a few quarters, but this update will raise further worries about the state of consumer spending and China’s economy,” analysts at Vital Knowledge wrote in a note to clients.

Overall, comparable sales at Kering, which also owns labels like Yves Saint Laurent and Balenciaga, will be down about 10 percent for the period, the company said.

New Designer

Gucci sales fell in the final months of last year as the label struggled to lure more wealthy shoppers to its pricey Double G belts and Princetown slippers. Sabato De Sarno was named as the brand’s new designer last year and he unveiled his first collection in September in Milan, which showed a more elegant and minimalistic aesthetic compared to the flamboyant looks of his predecessor, Alessandro Michele.

“The jury is out on whether the Chinese will like the Sabato De Sarno quiet luxury,” analyst Luca Solca and colleagues at Bernstein said, referring to the current trend for more understated looks.

Early ready-to wear products from the latest Ancora collection are meeting with a “highly favourable reception,” according to Kering. Their availability will increase in coming months, the company said.

Kering’s unexpected announcement is a “rather worrying signal for the luxury goods sector,” wrote Thomas Chauvet, an analyst at Citigroup. Its biggest label is suffering from “being in the midst of a major design and management transition, with weak performance of carryover items and limited penetration from early products” of the new collection, which had been delivered to only a third of the store network as of mid-February, he added.

Though Kering has been struggling with issues specific to Gucci, investors in some other fashion companies were spooked by its warning. Shares of Prada SpA tumbled as much as 11 percent in Hong Kong.

With a recovery in China slow to materialise, luxury companies have grown more dependent on the US. That’s bad news for Gucci, which is particularly exposed to the Asian market. The company plans to release quarterly revenue numbers on April 23.

By Eric Pfanner and Angelina Rascouet

Learn more:

Gucci Sales Down 20% in First Quarter, Kering Forecasts

Kering’s first-quarter revenues will likely decline by 10 percent on a comparable basis, the Paris-based luxury group flagged on Tuesday.