Strategies for Success and the Role of Omnichannel Personalization
As technology has proliferated the retail landscape, consumers have come to expect a less generic and more personalized shopping experience. The pandemic served to heighten those expectations as consumers increased their reliance on digital channels. While the business disruptions associated with the pandemic (such as store closings, hours restrictions, and supply chain disruptions) have eased or are in the process of easing, what remains are the elevated expectations consumers bring to the table, coupled with new behavior patterns that include a greater reliance on digital channels.
Where is your company on the Personalization Maturity Curve?
Personalization efforts can help companies capitalize on the lasting changes resulting from the pandemic. Yet without a roadmap, many companies don’t know where to start or what end-state to drive towards. A maturity curve is a valuable tool in establishing where your business is today, as well as setting a target for the future.
Grounded in data
The unifying concept across all stages of personalization shown in the image above is that a personalization strategy should be grounded in data. Many organizations that have started this journey reside in phase 2, Substantiating, where personalization efforts have focused on learning from the past to inform present strategies. It’s essential to take what we know from the past and to use it, but what about the behaviors we’re observing in the moment? For instance, what if I’m currently shopping for a gift for a relative rather than for myself? In this example, the historical information a retailer has gathered on my profile, spending behavior, and preferences likely holds no relevance in the current context. In fact, leveraging that historical context may even detract from my current experience.
The next great leap in personalization is in combining these historical data sources with real-time inputs in order to personalize experiences. As companies leverage those real-time sources, they can begin to make predictions about the current mindset of the consumer, such as whether they are unlikely to purchase, frustrated, price-sensitive, or any other number of outcomes.
The final stage, Innovating, is where you’re not only leveraging a comprehensive set of historical and real-time data and predictions (including the environmental contexts of current weather, location, and real-time trends), but that knowledge is fully orchestrated, working in concert and across channels to personalize a broad set of interactions. Given this field is emerging, very few companies will find themselves at this final stage today, which means significant opportunity for differentiation remains for those who make meaningful progress.
Bridging the gap between digital and physical
Greater reliance on digital mediums has increased the data available for personalization efforts, but the reality is that consumers operate in a world that blends both digital and physical contexts. The challenge is orchestrating a customer journey across channels in a way that feels intentional to the consumer. After all, you don’t want your customer to have the sense of a personal touch in one channel, only to lose that feeling as they transition to another.
Imagine one of your customers is approaching a store location. Earlier in the week, they browsed your site for footwear, but didn’t make a purchase. Footwear is a category many prefer to purchase in person, so it’s reasonable to assume they intend to try on the shoes they previously viewed online. Whether that assumption holds or not, this knowledge presents a great opportunity to connect the digital and physical channels by confirming the available in-store inventory and serving up an SMS or push message accordingly:
“The shoes you recently viewed online are available in the store!”
Another opportunity, particularly relevant for retailers emerging from the pandemic, is to purposely incentivize omnichannel behaviors. Many businesses with a sizable footprint of physical locations find that online orders are more expensive to fulfill than equivalent in-store purchases. If you’re a company that provides offers, consider tying promotions to in-store pickup. For example, instead of “Take $10 off your online purchase,” try “Take $10 off your purchase, when you buy online and pick-up in the store.”
The opportunity for personalization is to provide these offers to customers who are viewing items eligible for in-store pickup based on their geolocation. Taking that approach one step further, it’s possible to predict the likelihood of choosing BOPUS (buy online pick-up in store) as a fulfillment method; with that knowledge in-hand, you can deliver the interaction only to those users for whom it is relevant. The benefits of driving these online visitors to the store are twofold: you’ll improve margins in the short-term, while also giving customers a gradual and safe path of returning to your physical locations.
Deliver experiences, not discounts
Personalization in the domain of offers presents a great opportunity to enhance the customer journey in a particular domain, but offers should only be considered a small piece of a broader experience. During the pandemic, many e-commerce businesses implemented deep discounting online to win customers. Especially during the holidays, consumers were shopping for similar items available across multiple retailers. In those scenarios, the natural inclination is to pick the site offering the lowest price. While offering major discounts is effective in winning business in the short-term, it’s not a long-term strategy; not only because of the impact on profitability, but due to the lack of loyalty it engenders.
Previously in this article I explored how data was key to maturing personalization efforts. The missing link is that this data-driven methodology needs to place the customer at the center of that data. Testing and measurement approaches are critical components of most e-commerce operations. Yet what’s typically measured are the short-term financial implications of a given interaction, including the impact on conversion, sales, and order size. When considering the broader impact on the customer experience, many businesses have feedback tools in place to monitor for complaints, but they fall short of creating a meaningful feedback loop with their customers and prospects.
Those truly leading in personalization have embedded continuous feedback programs in their success measurement and strategic planning processes. These organizations routinely ask the following questions of their visitors: Does the experience resonate? Is it differentiated? Did it feel personalized? These are the indicators of true leadership in personalization and they will translate to meaningful long-term results, including beyond the pandemic.
Video: Strategies for Long-Term Success in E-commerce