Article
Creating a personal experience: Misconceptions, why data is a critical element
The good news is that technology is making it an easier and more affordable strategy, but retailers need to have the right data. They can’t afford to push the strategy off to the sidelines.
September 22, 2015 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com
Editor's note: In this first part of a two-part focus on how retailers can move forward on personalizing the customer experience, two experts offer up the challenges inherent in the strategy and misconceptions many retailers have regarding implementing a personal consumer experience. In Part 2, experts will offer insight on the best first-steps to take and invaluable advice on what retailers need to know to avoid common missteps and drive personalization forward past typical hurdles.
Personalizing the retail consumer experience is a must for retailers given what shoppers and potential customers have come to expect given personal experiences with social networks, mostly notably Facebook, and online interaction outside of the retail environment.
As Retail Customer Experience has reported, retail consumers love it when companies make email a personal interaction. A recent BlueHornet report notes 75 percent of consumers now expect email personalization tied to online purchase and shopping behavior.
So there is no "out," or leeway to avoid the essential strategy. The good news is that it’s not as hard as many retailers likely believe it to be, but it does require an investment when it comes to collecting, analyzing and assessing consumer data. The payoff is also enticing as BlueHornet’s report cites that 44 percent of consumers say personal campaigns remind them to shop and spur more frequent purchases.
But there are two very critical aspects that retailers need to know before embarking on providing a personal, customized retail interaction: you can’t do it halfway or just in one retail channel, such as email, or just on a website, and you need to avoid crossing the line into the "creepy" zone. That zone, according to a recent RichRelevance study, reveals shoppers consider it cool when they get help in finding relevant products and information, but they’re not too fond of being immediately identified, tracked or targeted with advertisements for things on a personal level or which use emerging tools such as facial recognition. Other "creepy" approaches include having a salesperson greet a customer by first name given mobile device data technology or super personal outreach such as targeting specific products given a person’s demographic — an eye cream promo for older female shoppers is one example.
Personalization is all about data
There’s no reason to initiate a personalized experience until a retailer has a solid grip on collecting relevant consumer data, and knowing how to parse and assess that data to drive the personal interaction, say experts.
"Marketers need to customize product price and channel across all experiences — online, in store, on mobile, etc. This requires them to link data from multiple sources to customer profiles. Because data is across multiple sources and an individual person might have several disparate profiles, it is the linkage of data to an individual shopper profile that presents the greatest challenge for marketers today," explained Persio CEO Marc Grabowski. "It is only with a single view of the customer’s price sensitivity, channel preference, buying behavior, and purchase history can a marketer execute a successful personalization strategy," he said.
One of the biggest barriers, according to Indraneel Mukherjee, CEO and co-founder of LiftIgniter, is that many retailers shied away from such effort due to cost or lack of good tools. Those two aspects are no longer in play, and integration of needed tools is easier and getting easier as more advancements arrive.
"True personalization, with quality content on either mobile apps or e-commerce sites, has been a challenge for brands and retailers. The reason: technology was not ready or, if it was, it was extremely expensive and difficult to integrate. In the past year, brands and retailers viewed personalization as more general and targeted a specific audience segment rather than individual customers," Mukherjee said. "Additionally, personalization to this point has been generally based on previous shopping habits, which isn’t necessarily the best indicator of what a customer wants to buy right now. Few retailers have been able to contextualize in real time and take other factors into consideration, such as location, time of day and available shopping items, which can have a big impact on customer engagement and conversion."
Misconceptions stalling personalization strategies
Many retailers are also operating under some misconceptions regarding implementation of a personalized retail experience, said Grabowski, such as believing retailers can embark on a single-prong channel effort, such as web or email and believe it will drive revenue and loyalty.
"Because customers engage with brands across many channels, a true personalization strategy should apply to the entire experience, not just a part of it. From the customer point of view, a partially personalized experience feels disjointed and compromises the entire effort," Grabowski said, citing an example in which a retailer seems to know all about a customer on the web, offering up product offers in their size and preferred style and notifying them of an item in their cart that just went on sale.
"But then the same retailer sends them an email promoting an item they have already purchased and subsequently returned. The relationship suffers. Personalization must include all channels at all times for it to have the intended effect, and many retailers are only focusing on one or two channels rather than the entire experience," Grabowski said.
Mukherjee believes the top misconception is that retailers assume the personalization strategy is a hard challenge and others view it as something that is solely tied to "tagging" and tracking a consumer’s browsing and buying activity.
"These tag-based systems take past purchase history and current tagged items into consideration which is an extremely weak and antiquated system. They are inaccurate," explained Mukerjee, using the example of a shopper buying a green bathing suit in the summer.
"That doesn’t necessarily mean I want a similar bathing suit in the fall. Also, showing consumers a large amount of content will not necessarily keep their attention. Rather, retailers need to show consumers the right content at the right time to keep them coming back to your mobile app or e-commerce site," he said.
About Judy Mottl
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