According to Gartner, personalization is “the process of tailoring an experience or communication based on information a company has learned about an individual.” In retail, this means that in order to be successful, brands need to make customers feel that they’re paying attention to their unique interests, wants, and needs to help them create an emotional connection to the brand. And these personalized experiences must happen across multiple channels.
Indeed, a recent study found that increasing personalization in more channels can increase overall consumer spending by up to 500%. Another study found that 91% of consumers are more likely to shop with brands who recognize, recall and provide relevant offers and recommendations.
Consumers now expect personalized experiences
Every day we see more examples of personalization. Think of Netflix’s uncanny “watch next” recommendations, or Facebook knowing exactly what products to advertise and what news stories to show, or Amazon providing five-item suggestions that are likely to catch your eye from its millions of available products.
These organizations do this because they know that these personalized experiences are the best way to deliver a superior customer experience. Consumers are seeking immediate and fulfilling access to the companies they do business with on the channels of their choice, and they will not hesitate to shop elsewhere if they aren’t getting what they want. The balance of power has shifted to customers, and, as a result, personalization has become a critical differentiator.
Personalization isn’t just about recognition, it’s about getting help
A recent McKinsey study uncovered trends in consumer shopping behavior that highlight their expectations and emphasize the need for personalization:
- Shoppers are looking for help. The study showed that 47% of shoppers want help picking out the right item. And knowing their preferences and delivering personalized choices based on those preferences can help fulfill this need. In other words, personalization is not just about recognizing a customer, but about helping them.
- Consumers have clear preferences for what they value. Asked to describe what motivates them to participate in shopping events, shoppers named attractive, personalized offers as #1, followed by the convenience of online shopping, followed by the ability to be presented with inspiring product ideas (another area where personalization can shine).
- Consumers want their shopping experiences and relationships to stay consistent regardless of where they interact with the brand. And through omnichannel personalization, retailers can combine offline and online data to build comprehensive customer profiles that deliver more helpful, personalized experiences across all touchpoints.
How to implement personalization efforts
Personalization is clearly a significant undertaking, one that affects everything a retailer does, from staffing levels and skill sets to budgets and organizational structure. And frankly, easily accessed technology (i.e. data) is at the heart of this transformation.
The best retailers have a well-defined understanding of the key influence moments in the customer journey, from generating awareness pre-shop to converting while shopping to deepening engagement post-purchase. They then identify the desired business outcomes at each step of the journey and test based on the ability to deliver business benefit and value to each kind of customer.
In order to do this, investing in customer data and analytics is crucial. Personalization is impossible if marketers don’t have the means to understand the needs of their customers on an ongoing basis. As a result of this increased need for customer data management and analysis, customer data platforms have become the fastest-growing tool in the martech ecosystem, and the foundation for the best personalization strategies.
Customer data platforms are designed to integrate with existing systems and bring all varieties of customer data (behavioral, demographic, etc.) together in one place to provide a unified view of the customer. With a customer data platform, marketers are able to analyze their data to identify behavioral patterns and trends and use this information to influence the personalized marketing outreach sent to these customers. Customer data platforms help make
Don’t wait to start your personalization efforts
Despite the personalization initiatives underway across the retail industry, only 12% of consumers feel like current brand personalization efforts meet their expectations, according to Gartner. This means there is significant opportunity for your organization to step in and fill that gap.
But remember: while consumers find personalization valuable, they favor personalized experiences designed to help over personalization that simply demonstrates that a company knows something about them. This distinction can make all the difference in demonstrating a true connection with your customers.