Retail personalization is a growing trend you can find anywhere, from Amazon product recommendations to personalized emails and content offers on your mobile device. Innovations in machine learning and big data are driving this trend, and we expect personalization to be a critical ecommerce strategy for retailers to compete in 2018 and beyond.
Adopting a customer-first mindset is key to winning today's tech-savvy consumers in an ever-growing ecommerce landscape. At the basic level, personalized marketing provides a competitive edge because it meets the consumers at the right moment - instead of showing irrelevant marketing content.
Personalization is as much about timing as it is about the right offer. It covers everything from addressing your shopper by name, knowing their location and time zone, optimizing content per device, and matching them with the right product or information.
Technology has transformed the way buyers and sellers communicate with each other. Consumers once depended on face-to-face, in-store interactions to make purchasing decisions. Today, most consumers can easily research information and product reviews without speaking to a sales person.
Busy shoppers have become immune to most branded marketing efforts, and people spend less time browsing shops, malls or even online product catalogs. Personalization is the future. According to eMarketer, 48% of US marketers reported that personalization on their websites or apps lifted revenues in excess of 10%. Only 11% reported no lift.
The challenge now for many retailers is this: how do you personalize for today's shoppers?
AI and Big Data in Action: Automated Personalization
Personalization involves properly segmenting customers and knowing them deep enough. In past iterations, retailers found three major problems in executing personalization tactics:
- Not having enough data
- Lack of automation
- Creeping out customers through poor execution
User segmentation means creating lots of rules. As a retailer, you'll need to find the right balance of being friendly and helpful, without being creepy. It involves proper timing and using automation to match the right product or content to show a visitor.
Ultimately, artificial intelligence, and more specifically, machine learning, will be the key player in making personalization technology more accessible, affordable, relevant, and less creepy. Big data analytics goes hand-in-hand with machine learning, and it helps retailers gain a deep understanding of shoppers and their buying needs.
According to Accenture, 70% of global retailers believe that big data is necessary to maintain competitiveness. By tracking shopping habits, purchase history, and market trends, retailers would be able to make smarter decisions when developing personalization strategies.
The goal of personalization is to create an exceptional shopping experience. It predicts consumer needs and helps retailers with their marketing strategy. Machine learning and big data can even help determine how much inventory you need to stock, how much to sell your products, shelf placement and which marketing channel would work best to reach your customers.
Email is still the most common channel retailers personalize. According to eMarketer, about two-thirds of US retailers personalized email content, followed by 56% that personalized elements of their website. We expect these trends to continue growing as technology affords better personalization capabilities.
A Connected, Programmatic and Personalized Future
Shopping is becoming increasingly programmatic, from marketplace-driven product recommendations to using chatbots for digital assistance. In a recent survey, 55% of US Internet users ranked Amazon as the digital platform having the best personalized customer experience. This personalization is largely driven by technology, not face-to-face interaction.
In the near future, virtual assistants such as Alexa will be offering more relevant, personalized product offers based on individual shopping and usage habits. In fact, Amazon and Google are investing heavily on their smart home devices to be the ultimate Internet of Things technology for domestic connectivity.
Amazon, Google and Netflix have built customer experiences around customized recommendations and content. Retailers need to keep up as consumers spend less time browsing and shopping, and they expect more relevant suggestions.
According to eMarketer, integration of data across devices, sales channels and functions is essential, but most companies lack this capability. Data from customer relationship management (CRM) systems is often the hardest to tap for personalization purposes.
Personalization starts by having all of your data in one place and using proper automation to analyze and segment your prospects. To ensure the survival of your business in the years to come, you need to invest in a unified platform that connects and automates your channel operations. Start exploring your options today.