Can Advanced Personalization Help Retailers Win the Ecommerce Battle?

by Marketing Team,
Monday, February 12, 2018

Personalization has been on the lips of brand marketers more than Chapstick lately. The topic has been thrown around as much as the pigskin did last Sunday night, but what the personalization holds for the future of retail is potentially business-altering. However, even with the advancements in technology, the vast amount of digital data, and resources available to leading marketers today, most companies still struggle with innovative personalization. 

Some may argue that retailers today do, in fact, personalize. But the personalization that typically takes place is basic in comparison to the capabilities of advanced personalization. For instance, basic personalization may be dynamically inserting a person’s name into an email, acknowledging the visitor in the header line after onsite login, or populating (annoying) display ads that follow customers along their online activity. These personalization efforts are the baseline starter package to personalization and in an industry that desperately needs to innovate their customer experience, it won’t cut it.

Retailers are getting pummeled by larger ecommerce companies that are swooping in to become the digital retailers of tomorrow. Retailers such as Sears, Sports Authority, Nine West, and even Walmart have undergone mass lay-offs as they look to restructure and/or lick their financial wounds from the online retail battle. All the while, ecommerce businesses like Amazon gobble up customers through solid customer experience innovation. A recent Forbes article stated, “As Amazon continues to launch new private labels and grow sales in apparel, major established retailers will have to fight harder for consumers’ apparel dollars by offering greater newness, exclusivity and innovation.”

Truly, innovation and exclusivity are what retailers need to set their sights on. Some retailers are getting it right, slowly. Target has consistently posted strong numbers across their product lines and Walmart acquired digital-first companies like ShoeBuy and Moosejaw to strengthen their online offering.  Why are these companies getting it right? They are leveraging digital channels to reach their customers, provide excellent service, and create an experience that is innovative and captivating. 

What about the other 93%? There are a number of factors that are inhibiting retailers from hitting customer experience and personalization out of the park. A recent eMarketer article highlighted symptoms of some underlying pain points for corporations struggling with personalization:

Leading Obstacles to Improving Personalization Capabilities According to US Retailers

“Nearly seven in 10 (69%) of retailers polled said a lack of advanced technologies is holding them back from making progress with their personalization efforts.”

This pain point highlights the back & forth that exists within every organization, at some level. There is a goal in place but not enough support and technology to achieve that goal. Additionally, there are gaps in education when it comes to utilizing technology available and even understanding how to apply personalization techniques when it comes to IT implementing marketing strategies. The good news is that many brands can be utilizing the technology they already have (and invest in) to achieve advanced personalization. With the methodology known as Visitor StitchingTM , brands can utilize technology across multiple channels to set a personalization framework based on data the company already has and owns. 

For those brick & mortar retailers that need to undergo their own digital transformation there are plenty of advanced tools, technology, and resources available to start building a roadmap to effective personalization.

“41% of US consumers said they ditched a company because of ‘poor personalization and lack of trust.’”

Customers want offers and communications to be tailored to them, but they also don’t want to be creeped out as brands try to gather more information. What a tricky line to tow for brands, retail or otherwise. They need to know their customers on a personal level without customers becoming aware they are being assessed. For any company that is looking to personalize their customer experience, there are some common pitfalls in this area. One is when a customer opts-in to sharing data, but it ends up never being used to personalize the experience, or second is when the experience is personalized incorrectly. Collecting data is a good start to personalization, but without a strategic plan on how it will be used, retailers may be doing themselves a dis-service.

The semblance of trust is also very important in the retailer – consumer relationship. Consumers want a personalized experience, but they also want to feel that their personal data is safe. Security breaches at retailers like Target and Michaels in the past few years have heightened consumers awareness of the security of their personal data. So, if your customer is going to give you valuable personal data, make it worth their while and provide value for their trust and loyalty. After all, personalization breeds loyalty -  Forty-four percent of consumers say they will likely repeat after a personalized shopping experience.

Forty-nine percent of customers bought items they did not intend to buy due to a personalized recommendation from the brand they were doing business with.

This statistic should be top-of-mind for retailers (and really any brand) – personalization leads to increased revenue. Consumers expect brands to remember who they are, offer tailored recommendations, and optimize the experience across channels. For retailers who have both a digital and brick & mortar presence, this can actually be a differentiating factor in the overall shopping experience, if personalization is done right. There is a reason why Amazon has partnered with Kohls to offer physical return locations and why Amazon is experimenting with Amazon Go stores – there are advantages to having more than one point of contact with consumers. Retailers that take their customer experience to the next level through personalization across their online and in-store channels are already a step ahead.

Achieving advanced personalization

Overall, effective personalization must be worked towards over time and through learning. Through strategic measurement, optimization and cross-development best practices, retailers can uncover behavioral differences and determine how to change messaging to each customer’s unique experience. Establishing processes and scaling optimization efforts to develop tailored experiences founded in measurement of what your customers respond positively to, leads to real personalization.

The other point to remember is that there is an existing gap when it comes to personalization. Most brands struggle with moving beyond entry-level personalization tactics.  Advancing personalization efforts requires knowledge of how audience segments fundamentally differ from each other in both preference and behavior. Moving beyond entry-level personalization tactics requires an analytical understanding of an audience’s unique behaviors. Oftentimes, this will require a combination of datasets from a wide variety of channels to build a comprehensive consumer view.

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