Customers Want a Contextual and Connected Experience, But Are Retailers Able to Deliver It?
Today's digitally connected shoppers are used to a highly personalized environment where everything is tailored to their needs starting from customized promotions, social media content, individualized shopping site recommendations and connected home experiences through AI shopping assistants, machine learning and chatbots. Thus, they expect personalized interactions with brands over impersonal mass messages which are often irrelevant. Currently, according to EIQ/EKN data, on average 40% or higher of a retailer’s marketing budget is allocated towards digital marketing, but the challenge is to determine ways to increase response rates for effective communication. Due to this, retailers are now recognizing the need to treat customers like individuals and cater to their unique interests, buying journeys and personas to build brand loyalty, achieve customer satisfaction and delight. Supporting this assertion, EKN's Framework for Omnichannel Personalization shows that close to 8 in 10 consumers are more likely to be repeat customers if a retailer provides them targeted and personalized offers.
There's no perfect way to achieve personalization in omnichannel marketing but here's an EIQ recommended road map for the same –
1) Customer intelligence - With a prime goal to increase engagement and drive sales, retailers are incorporating deep learning and predictive technologies to optimize customer interactions and create a customized journey for each shopper. Using structured (point-of-sale, loyalty, market data) and unstructured customer data (Social, Wi-Fi, beacon, others) based on real-time purchase behavior, brand/product preference and interests, marketers are taking special care to deliver personalized communications to customers. A great example in this case is E.L.F, a chatbot that designs personalized itineraries for people at The Mall of America - the largest shopping complex in North America. This chatbot guides people to find the right experience for them related to shopping, sightseeing, dining or a combination of the three. It has a simple interface similar to a text messaging platform which is available via the Facebook Messenger app, a browser or kiosks located within the mall. Wal-Mart, as part of the Wal-Mart data café initiative, too collects a large volume of shopping data which enables their data scientists and engineers to use data to quickly build and launch new shopping experiences for customers.
2) Omnichannel campaign development - Since personalization has largely been the domain of online retailers or the e-commerce teams of brick and mortar retailers, innovative retailers are focusing towards a next generation customer experience in the form of omnichannel personalization to deliver accurate, relevant, and personalized touchpoints both in store and online. For example, luxury retailer Nordstrom uses big data to fuse the online and offline shopping experiences. Their marketing team tracks Pinterest pins to identify trending products, and uses this data to promote them in its physical stores. To top this, they also host interactive touchscreens in changing rooms which allow customers to order products and view online stock.
3) Campaign effectiveness - Creating customer personas is one of the most effective ways to define your target audience. Personas are created by collecting raw data and combining said data with educated guesses relating to consumers. Customer personas are created to help understand the needs of your audience and to shine a light on the problems that they face. The best campaigns have the most effective calendar of all the messages that need to go out to various customer segments and must possess the ability to change those messages on the basis of market trends and forecast. Pre and post campaign analytics are also necessary to measure effectiveness in terms of conversion and other metrics. Home Depot is a wonderful example in this context as they have identified and marketed programs according to three major types of customers they cater to - DIY customers such as home owners, Do-it-for-me customers looking for installation services and professional customers like contractors, builders, and interior designers. They regularly organize workshops and clinics targeted at mostly the do-it-yourself customer and have a loyalty program called Pro Xtra which exclusively targets professional customers and offers benefits like product discounts and exclusive product offers.
5) Customer Loyalty Programs – Loyalty is not just about rewards but a personalized experience that customers are looking forward to. It’s a continuous association with the brand and its products, services, and other extended benefits. According to EIQ/EKN data, half of retailers are using loyalty programs to keep customers coming back for more. But the question here is that why are others not? Loyal customers convert and spend with brands they like more often, and they tell their family and friends about positive experiences. Word-of-mouth marketing effectively drives new customers and in turn, these referred customers become loyal customers that are likely to spend more than average. In fact, in the U.S., 40% of online shopping revenue comes from repeat customers, who make up only 8% of site visitors. Thus, retailers need to work towards developing solid customer loyalty programs. A clear winner in this space is Amazon Prime, which customers view as a well-designed privilege program as it caters to the needs and wants of different customer segments. For those who shop often or are used to impulse shopping online, the free 1-day shipping with no minimum purchase limits fulfills their need. For those who seek value, Prime membership gives them access to a variety of exclusive deals and discounts. For those who seek exclusivity, there are exclusive products which are launched first to Prime members only. Thus, there’s something for everyone.
To conclude, personalization and customer engagement are connected around a brilliant customer experience which is a continuous cycle and not a onetime approach and these abovementioned five vital aspects help every organization effectively achieve personalization in an omnichannel market.