Personalization: where to start and where to go

Thomas van Manen
Data Translator
June 30, 2020

The advancement of technology and its uses are shaping a new world. A world without a ceiling in which we become more demanding, less easily satisfied and increasingly hungry for convenience, pace and instant gratification. This especially holds for our needs and behavior in a consumer context. Expectations of the modern consumer are on the rise, propelled by the new standards of service imposed by front-runners in the market such as Amazon and Alibaba. Consumers choose providers that excel in terms of service, delivery, price and in delivering a frictionless shopping experience in an integrated online and offline environment. In this article, we shed light on one aspect of the increasing expectations, the need for personalization.

The need for personalization

Research shows a growing need for personalization. A report by Infosys shows that 31% of the surveyed consumers wish their shopping experience was more personalized. 86% of the respondents who experienced personalization stated it influenced what they purchased to some extent, and 25% even stated it significantly influenced what they’ve purchased. For consumers personalization isn’t a goal in itself, it’s about the advantages it is delivering. Personalized assistance that helps the consumer to find the product he or she likes and needs in an ocean of infinitely many products, saving them from information overload. Assistance to make the right decision without regret, and quickly in a world that’s in a constant rush. For retailers and brands this means you have to be relevant to attract the attention of the customer and keep the attention of the customer to turn them into loyal buyers. To make your customers love your brand.

Personalization | Where to start

The promise of personalization is not yet there on large scale, but we are getting closer. The increased availability of consumer data and the advancement in data science and machine learning applications are paving the road towards implementing personalization in daily business.

Some organizations already excel in personalization, take for example Netflix and Spotify. They effortlessly recommend the series and music you like before you even are aware. On the other hand, we see that many retailers and brands are still struggling to recognize their customers in an online environment, for example on their website or clicks within mailings. Recognition of your customers is the first crucial step towards personalization. When you are able to recognize your customers you are also able to predict its taste, interests, preferences and needs based on the available data. This knowledge can be used to start experimenting with recommendations. Recommendations are a good starting point as it can be tested in many contexts and results are easy to ascertain. Start small for example with your mailings, instead of sending bulk emails to everyone or several segments, personalize your mailings on an individual level and send it at the right time that suits the consumer best. Become relevant for your customer by offering a perfect match between product and consumer and at the same time increase conversions and decrease the number of unsubscribes. Important is to start small in an area that is most relevant to you

The next step | Customer journey personalization

This is only the start, as consumers have access to a wide variety of channels to search and discover, we already have to start looking at a consistent experience throughout the complete customer journey. From paid search, website, mailing, social media to customer service. From the insights gathered from your personalized emails, you can start using these insights at other touchpoints within the customer journey. Personalize for example the recommendations on the homepage of your website or recommendations on specific product pages. We are already seeing the personalized customer journey getting shape.

The next steps can involve personalization within other domains. For example, optimizing your assortment in stores with different geographic locations. When you know which products are popular in different regions based on your online insights, this can be translated to the assortment of your physical stores. Again you are matching your products to the individual needs. Or enrich your customer service with insights about what the preferences of the customer are to be of better support and even pro-actively recommend products that could be relevant to the customer.

Context aware recommendations

As personalization will grow over channels, it will also grow in profoundness. Artificial intelligence will be able to better understand the context of shopping. Is a male customer for example shopping for himself, searching for a present for his wife or maybe buying a present for his child? These different contexts will significantly influence the behavior and needs of the customer. Based on the different needs, personalized recommendations can be given based on the context.

Also emotional cues that are related to that context, will become more important, as almost every decision is guided by emotion. For example, in what state of mind is a consumer when shopping, and what response fits best to satisfy his or her needs in that situation? Impulsiveness, excitement or even anxiety for example are emotional drivers with very distinct behaviors as an outcome. If you are able to really understand what the consumer is looking for and why a true relationship and trust can be built.

Start small, experiment and expand

The road to personalization is there, but it’s essential to start building capabilities in consumer data science and analytics to understand and act on your consumer needs. Start small (at a point that fits your needs), experiment and expand. This is the key to a successful implementation of personalization throughout the entire customer journey.

About the expert
Thomas van Manen
Data Translator