In today’s challenging and dynamic retail environment where the customer expectation is evolving and consumers able to shop anywhere and anytime, personalisation is a must have retail tactic to differentiate a retail brand from a competitor. However, the fact is majority of Asia Pacific retailers just can’t seem to deliver personalisation due to lack of technology and required skills. Although retailers collect and store consumer’s shopping behavior based on their purchases history and frequency but they struggle to identify and engage their best customers and increase their lifetime value through personalization.
Personalisation and customization have been used interchangeably and many retailers and brands confuse the two. Personalisation is about collecting unspoken and definitive customer information through different touch points such as the web, social media, mobile and in store, analyzing the information and create a content delivery framework that able to manipulates the information and present a rich and contextualized information to the customer at the right time through the right media. To simplify the above statement, personalisation is made up of three core components; data, rules, and content.
The key fact is that with all the latest cutting edge technologies available to retailers, the majority of them fail to establish a customer engagement and personalisation strategy. As 3rdplatform technologies (cloud, mobile, social, and big data/analytics) become more embedded in today business environment, the next differentiator for retailers is to offer personalised customer experience enabled by these technologies. Personalisation allows retailers to know customers at a deeper level, creating a relationship with them as actual people, and enhancing the customer lifetime value.
One of the common myth by many retail marketers is that they need detailed profiles or segmentation to personalise their message. In fact, marketers able to capture valuable information and clues from online visitors and engage them without getting them to register their personal information. The second myth is that retailers should develop their personalisation strategy based on digital rules engines rather than cognitive technology. Managing rules over the time are labor intensive which requires special expertise. In addition, once the rules start growing then rules itself creates a management headache.
Adopting personalisation strategy in retail marketing is not a casual decision. There are risks and pitfalls, and above all, retailers need to prepare as most are not in “flying condition” needed to for a safe journey. Business and IT leaders in traditional retail organizations considering adopting personalisation strategy should also consider shifting from a customer profile and rules engine personalisation to a model that is based on the machine learning. Answering following questions helps retailers to clarify the reason for offering personalised shopping experience and perhaps enable them to build a strong business case prior to investing in any technology.
- What do I want to achieve with personalisation?
- What types of behavior or information are most valuable? And how will they be collected?
- Who are our primary customer segments? And do I have the tool to analyse them?
- What do we want to say? And how should we deliver the content?