Personalization for Retail
By David Dorf-Oracle on Apr 28, 2014
Personalized service was one of the casualties when the retail industry moved from independent stores to chains. Personalization at scale has always been difficult, but technology advances in the last ten years have helped. One only needs to visit Amazon.com to see what automated personalization can accomplish. By personalizing the customer experience, retailers like Z Gallerie and Zenni Optical are increasing customer engagement, converting more sales, and cross-selling/up-selling. Typical approaches include:
- Product Recommendations
- Searchandising & Faceted Navigation
- Personalized Emails
- Webpage Curation
- Targeted Alerts & Offers
All of these approaches must effectively leverage many data sources. While these techniques are fairly mainstream in the digital world, they are only now making inroads in the physical stores. The combination of indoor-location and mobile apps has opened new opportunities to find customers and provide relevant, personalized content while they are shopping. Of course there has been much debate over the privacy concerns, but as long as retailers focus on being a butler rather than a stalker, those issues will work out over the long-term.
The three C's for personalization are Context, Content, and Conduits. Understanding each is important to the overall personalization effort.
Context makes message more relevant and therefore more sticky. Context starts with location, which includes tactics like geo-fencing and in-store location. Messages delivered as the consumer drives near a store or as they browse a particular department within the store are relevant to the current situation and therefore more helpful. Context also includes what might be known about the customer. Unidentified customers might rely on what's known about local customer segments, while an identified customer might include detailed purchase history. If the customer doesn't own a dog, don't offer them dog food.
Content includes product data, offers, and lifestyle information. Not everything is about a coupon. A sporting goods retailer, for example, might alert customers about local sporting events. Alerts for new shipments or upcoming promotions are also helpful to customers. Help customers improve their lifestyles without always overtly selling to them.
Conduits refer to the different touchpoints for contacting customers. Obviously the web is an excellent opportunity to present offers, but email and mobile apps can be just as effective and are sometimes more appropriate. Using a combination of conduits, possibly managed via marketing automation, can provide the most consistent messaging. Be care to note a customer's contact preferences.
Connecting the data sources, optimization science, marketing execution, and delivery technologies will round-out the personalization solution. Remember, customer centricity is a philosophy, not a feature.