New School Tech, Old School Service
More on Personalization
To learn how leading retailers like Amazon, Neiman Marcus, Kroger, Walmart, Sephora and Nordstrom personalize the shopping experience with a mix of new- and old-school techniques, be sure to check out RIS’ special report on “The Art and Science of Personalization.”
What is old is new once more. The nostalgic, customer-centric shopping experience of the past is trending again and retailers are working diligently to recreate the everyone-knows-your-name experience on a grand scale.
In just the past month Walmart, Nike, and Rite Aid have all announced personalization initiatives that place the shopper at the center. Retailers both big and small are searching for ways to tailor the experience and win the loyalty and affection of an increasingly fickle shopper base, which is a lot harder than it looks.
Constructing an individualized experience for millions of shoppers requires an abundance of shopper data and sophisticated analytic platforms capable of delivering actionable insight in real time. In addition, to personalize at scale retailers must have an AI-powered personalization solution that can scrutinize customer behavior and market conditions and uncover the ideal action to spur the sale.
Retailers report that successfully implementing personalization can increase revenue by as much as 7.6%, according to RIS’ “Closing Big Gaps in Personalization” report. While cutting-edge technology is currently available to provide a one-to-one, personalized shopper experience, most retailers are still in their infancy when it comes to their development of this vital capability. In fact, just 4% of retailers rank their omnichannel maturity level for executing personalization initiatives and campaigns as high, and a shocking 54% rate it as low.
Retailers are still building their tech infrastructure to deliver a personalized experience, however they are keenly aware of its importance and have earmarked it as a top priority. Seventy-six percent of retailers named personalization capabilities as either important or extremely important to their organization’s business model, according to the RIS report.
Having the science in place to accurately predict shopper wants and needs is imperative to providing customers with a tailored experience, but it is only half of the equation. Equally important is the human side of the house, or the art of personalization. While deep data analysis fueled by machine learning and artificial intelligence allows retailers to scale their personalization efforts, human intuition and knowledge are critical to building the strategies and promotional offers that will ultimately connect with consumers and bolster the bottom line.
While the technical firepower and human knowhow is available to those retailers willing to invest in and nurture those capabilities, the bigger question many retailers have yet to solve is when to personalize. We have all had the experience of doing a little online shopping for a gift, or checking out some products we have no real interest in purchasing and then being bombarded with marketing messages.
We are in the age of the follow-on ad, where a customer checks out a good or service online and then will continue to see digital advertisements and offers for that product, even if they are not truly interested in it. The strategy behind this approach is simple: a customer has shown interest in a product, so the retailer will continue to show it to them to hopefully spur the sale. But this approach runs the risk of becoming annoying for the customer, or worse yet the dreaded “creepy.”
The follow-on ad can be a good marketing approach, but retailers need to differentiate between a browser and a shopper and market accordingly ― which requires a sophisticated AI engine that is able to pinpoint those customers that are more probably to finalize a sale.
The retailers that are able to expertly blend the art, science and critical timing of personalization will have a leg up on the competition. They will not only be capable of tailoring their interactions with shoppers on the individual level, but will be able to design offers and promotions that truly connect with their unique customer base. Welcome to the age of new-school tech mixed with plenty of oldschool knowhow.
Editor’s Note: Be sure to check out RIS’ special report on “The Art and Science of Personalization” to learn how leading retailers like Amazon, Neiman Marcus, Kroger, Walmart, Sephora and Nordstrom personalize the shopping experience with a mix of new- and old-school techniques.