Personalization: the new imperative for retailers to acquire, grow and retain customers
When we go shopping, we all want our favorite retailer to treat us as an individual, understand our needs and serve us with right product and price anytime, anywhere and anyplace. This has brought the retail business closer to the concept of personalization as a central strategy, and the customer as the center for all decision making. In a recent IBM C-suite study, it is shown that 60 percent of CEOs expect customer influence to go beyond developing products to shaping business strategy and more than 60 percent of CIOs will focus on improving the customer experience and getting closer to customers.
This evolution is here to stay for a good reason: customers want personalized offerings and experience. This has now become critical for retailers to acquire, retain and grow a profitable customer base. There are many leading retailers like Sears holding, Kohl’s, Target, Macys and Staples which have recently launched many personalization services both for in-store and online purchases. For example, Sears holdings launched services like “Get Advice” and “In-Vehicle Pickup” for online purchases, Kohl’s is testing real time in five of its stores that enables shoppers to opt in for personalized offers via their smartphones and Staples Inc has acquired PNI Digital Media, provider of personalization software for retailers.
Consumers are now demanding a more seamless, context-rich and intuitive experience. As a result, retailers are using big data and analytics to analyze the volume, variety and veracity of customer data available within the enterprise and outside the enterprise (including social media conversations, product reviews and product purchase behaviors) to make personalization a reality. The best way to start on the personalization journey is to get a firm understanding of the entire customer interaction life cycle, documenting each step and all possible scenarios, then highlighting the areas where personalization can add the most differentiating value. Here are a few common areas where having deeper understanding of customers omni-channel purchase behavior can help retailers:
- 360 view of customer and deeper customer segmentation
- Maximize loyalty program with personalized offers
- One-to-one marketing
- Dynamic pricing
- Targeted coupons and promotions
- Personalized product recommendations
- Dynamic content in retailer’s digital channels
The personalization fever has already spread to other industries as well, such as healthcare, telecommunications and even manufacturing industries. Last month I had the pleasure to meet several leaders from many different industries at the IBM Smarter Commerce Summit in Tampa, Florida. They discussed with me how they planned to leverage big data and analytics to deliver a more personalized experience to their customers. For example, a USA based healthcare provider wants to use customer insights from social big data to send a personalized message to provide a free doctor visit to a customer if their previous visit had a long waiting period. Similarly, a middle east-based telecommunications company wants to use customer insights to personalize service offerings and recharge offers delivered directly to the consumer’s mobile phone
Retailers are now heavily acknowledging the relevance for more effective personalization, and are looking for solutions geared towards optimizing the customer experience. A variety of technologies and solutions are available to retailers, covering a broad spectrum of tactics, including segmentation, targeting, customization, web site optimization, product recommendations and content marketing.
For more details on solutions