Margins are tight. Customers are picky. Loyalty is fragile. In 2025, retail isn't just about selling products, it's about knowing exactly who you're selling to. The difference between a thriving brand and a struggling one often comes down to a single word: personalization. It can reduce customer acquisition costs by as much as 50%, and lift revenue anywhere from 5% to 15%.
Yet focusing on personalization tactics that work—both for your business and your customers—is easier said than done. In The State of Consumer Personalization, 2024, Forrester suggests that consumers are "lukewarm" about personalization efforts and "aren't sold" on personalized interactions from brands.
The result? Missed sales, wasted marketing spend, and customers who never come back. In other words, exactly what you're trying to avoid when margins are tight.
Why personalization matters now
According to IDC's 2024 report on retail customer experience, the top three improvements shoppers want in their experience are all rooted in personalization:
- Real-time product availability
- Staff who understand their preferences
- Offers and promotions tailored to them
Seems simple enough? For most retailers—this is tough to get right because their systems are fragmented. Online and in-store data are siloed, in-store staff have no way to recognize a loyal customer who bought something online last week, and marketing teams are making their best guess.
This isn't just a technology problem, it's a strategic one. As customer acquisition costs grow and consumer spending tightens, every interaction must count. Retailers who fail to personalize don't just risk losing a sale— they risk losing a customer for good to their competitor who has nailed personalization.
Zooming out: what the experts are saying
Experts at IDC and Forrester are sounding the alarm for more focused personalization efforts, too.
IDC's latest MarketScape: Worldwide Mobile Point-of-Sale Software Platforms for Fashion Retail report doesn't mince words: "Modern mPOS/POS platforms that enable real-time access to unified data from across channels and applications, along with built-in AI, are becoming essential for fashion retailers trying to meet new and evolving customer expectations to drive loyalty and sales."
In Forrester's 2025 report, "The Truth About Consumer Personalization," they found that personalization isn't just about sending the right email or showing the right ad. It's about context: knowing what a customer wants, when they want it, and delivering it seamlessly across every touchpoint, whether in-store or online.
Personalization-receptive customers, who make up about 22% of US online adults according to Forrester's 2024 Media & Marketing Survey, expect personalization across the whole customer lifecycle.
The science of POS-powered personalization
Additional research from Forrester proves why POS systems are uniquely positioned to drive personalization success. In their analysis of consumer personalization preferences, they found that effective personalization isn't just about content—it requires understanding context, customer behavior, and timing.
Context is king. POS systems capture rich contextual data at the moment of highest customer intent: the purchase decision. This data includes not just what customers buy, but when, where, and how they shop. This contextual richness makes POS-captured data far more valuable for personalization than traditional web analytics.
Customer understanding drives relevance. Forrester's research shows that personalization-receptive consumers are more cost-conscious, more open to technology-driven experiences. POS systems capture this willingness to engage at the perfect moment—when customers are actively making purchase decisions.
Trust enables transformation. Forrester reveals that 72% of personalization-receptive consumers trust that companies will do right for their customers, more than personalization-avoidant counterparts. This trust is earned through relevant, valuable interactions—exactly what POS-powered personalization enables.
Personalization in action: Shopify retailers leading the way
Stories prove the point better than any statistic. Here's how two retailers transformed their business with POS-powered personalization.
Little Words Project: turning checkout into connection
Little Words Project started online, building a loyal following for their custom bracelets. When they expanded into 14 physical stores, they faced a challenge: how to keep the personal touch that made them successful, while scaling in-store operations.
Traditional email capture methods slowed down checkout and distracted staff from connecting with customers. Shopify POS changed the game. With email capture built into the checkout flow, staff could focus on conversation, not data entry.
The results were immediate:
- 95% increase in email capture rates at multiple locations
- 21% increase in POS orders with customer emails added
- 33% increase in orders with marketing opt-ins across all stores
"Email capture is a recent dashboard that we've added, and we pull the information from Shopify," says Sam Sisca, VP of Retail at Little Words Project. "This email data is flowing into our marketing programs and the larger Little Words Project ecosystem. So customers are getting our promotional emails and announcements about new launches and events coming up at stores close to them."
The magic happened at the intersection of technology and human connection. Staff could focus on their core mission—providing empathy and personalized guidance—while the POS system seamlessly captured customer data and preferences in the background. Every sale became an opportunity for a deeper relationship.
PAIGE: unifying data, unifying experience
PAIGE, a premium denim brand, faced a different challenge. Their previous commerce tools created silos between online and in-store customer data. When customers called retail locations about online orders, staff had no visibility into that information, creating frustration for both customers and employees.
After migrating to Shopify's unified commerce platform, PAIGE transformed their customer experience:
- 50% increase in online conversion rates
- 17% of online orders fulfilled from retail locations during peak season
- Dramatic reduction in training time from two weeks to just 1-2 days
"Operationally, the biggest shift has been being able to centralize the customer information, both retail customers and online customers," explains Sofie Kuehnen, Head of Global Retail Operations at PAIGE. "Now if a customer purchased online and they call a retail store, it doesn't matter where they originally purchased. We're able to provide them with those answers."
The unified customer view enabled by their POS system didn't just improve operational efficiency—it created opportunities for personalized service that strengthened customer relationships across all touchpoints.
Why the personalization struggle persists
If personalization is so powerful, why do so many retailers fail at it? The reasons are both technical and cultural:
1. Siloed data
Most retailers run separate systems for online and in-store sales. The result is a fractured view of the customer. A shopper who buys online is invisible to store staff, and vice versa. Offers and recommendations are based on incomplete information.
2. Manual processes
Capturing customer data in-store often means asking for an email at checkout, scribbling it down, and hoping it gets entered correctly later. It's awkward for staff and annoying for customers. Most people opt out.
3. Lack of real-time insights
Even when data exists, it's often outdated or inaccessible. Staff can't see what a customer bought last week. Marketing teams can't trigger offers based on real behavior. Personalization becomes guesswork.
4. Fear of "creepy" personalization
Retailers worry about overstepping—sending offers that feel invasive or irrelevant. Without a unified view of the customer, it's easy to get it wrong.
5. Mishmashed alignment
This one is often overlooked, but it can be the biggest blocker to make personalization efforts get prioritized: mishmashed alignment between your retail operations and your technology teams about what to prioritize and when.
The POS: from transaction terminal to personalization engine
The point of sale is where personalization for retail becomes real: intent becomes action, browsing becomes buying, and a customer's preferences are revealed in what they actually purchase.
Shopify POS is built for this: when a customer makes a purchase via Shopify POS, their data is immediately connected to our 200M+ network of SHOP Pay customers. No need to clumsily ask for an email. And you capture the full context of the sale:
- What was bought
- When and where it was bought
- Who bought it (and how often)
- Which promotions or recommendations worked
This data isn't trapped at the register. With unified commerce platforms, it flows across every channel—online, in-store, mobile—creating a single, known customer profile. Features like seamless email capture at checkout make it easy to connect every sale to a real person, not just a credit card swipe.
IDC's latest MarketScape: Worldwide Mobile Point-of-Sale Software Platforms for Fashion Retail placed Shopify as a Leader, highlighting personalization as one of the strengths: "Shopify leverages AI to deliver personalization product recommendations, customer behaviour insights, and actionable analytics through tools such as Sidekick AI Assistant and Shop Pay. These innovations help merchants optimize operations and enhance customer engagement."
The benefits: beyond the buzzwords
Need a list to convince your CTO why POS can radically improve your personalization efforts? Look no further.
1. Frictionless data capture
Traditional email capture methods disrupt the customer experience and burden staff. Modern POS systems like Shopify POS can automatically capture customer information at checkout, matching transactions to existing customer profiles or creating new ones seamlessly. This reduces friction while dramatically improving data quality and capture rates.
2. Enable real-time personalization
With unified customer data accessible at the point of sale, staff can provide personalized recommendations, acknowledge purchase history, and suggest complementary products based on actual buying behavior—not just browsing patterns.
3. Power cross-channel experiences
POS-captured data flows into your broader marketing ecosystem, enabling personalized email campaigns, targeted social media advertising, and customized website experiences based on in-store purchase behavior.
4. Build customer lifetime value
By capturing and acting on customer preferences at every touchpoint, retailers can increase average order value, purchase frequency, and customer retention. The unified view enabled by modern POS systems makes it possible to identify your most valuable customers and treat them accordingly.
5. Optimize inventory and merchandising
POS data reveals not just what sells, but what sells to whom. This enables more targeted inventory decisions, personalized product recommendations, and strategic merchandising that drives both sales and customer satisfaction.
6. Reduce customer acquisition costs
Personalized experiences increase customer retention and encourage referrals. According to Shopify's research, retailers using unified customer data see significant improvements in customer lifetime value, reducing their reliance on expensive acquisition channels.
Implementation: best practices checklist
Personalization isn't plug-and-play. To get it right, retailers must:
- Invest in unified systems: Choose a POS that connects online and offline data, not one that creates more silos
- Train staff on the why, not just the how: Employees should understand the value of personalization, not just the mechanics of email capture.
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Respect privacy: Be transparent about data use and give customers control.
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Start simple: Focus on capturing accurate data and using it for one or two high-impact touchpoints before scaling up.
- Measure and iterate: Use analytics to track what's working, and adjust your approach as you learn.
Common pitfalls include overcomplicating the tech stack, overwhelming staff with new processes, or pushing irrelevant offers that erode trust.
The bottom line? POS is your personalization advantage
When customer acquisition costs continue to rise and consumer loyalty is increasingly hard to earn, personalization isn't just a competitive advantage, it's a survival strategy. But effective personalization requires a foundation of unified, accurate, real-time customer data.
Your POS system is uniquely positioned to provide this foundation. Unlike other retail technologies that capture incomplete pictures of customer behavior, POS systems capture the complete transaction—the moment when browsing becomes buying, consideration becomes commitment.
Modern POS platforms like Shopify POS go beyond simple transaction processing to become the nerve center of customer relationship management. They unify online and offline data, enable real-time personalization, and create seamless experiences that keep customers coming back.
The retailers winning in today's market aren't just selling products—they're building relationships. And those relationships start with understanding your customers deeply enough to serve them personally. Your POS system is where that understanding begins.
Ready to unlock the power of POS-driven personalization? The future of retail belongs to businesses that can create meaningful, personalized connections with every customer, at every touchpoint. Make sure your POS system is equipped to deliver.
See why Shopify was positioned as a Leader in the IDC MarketScape: Worldwide Mobile Point-of-Sale Software Platforms for Fashion Retail 2025 Vendor Assessment by downloading the excerpt here.
IDC MarketScape vendor analysis model is designed to provide an overview of the competitive fitness of technology and suppliers in a given market. The research methodology utilizes a rigorous scoring methodology based on both qualitative and quantitative criteria that results in a single graphical illustration of each supplier’s position within a given market. The Capabilities score measures supplier product, go-to-market and business execution in the short-term. The Strategy score measures alignment of supplier strategies with customer requirements in a 3-5-year timeframe. Supplier market share is represented by the size of the icons.
