The importance of personalization within the customer journey has increased dramatically in recent years. Whereas some 10 years ago it was seen mainly as a marketing department trick, today it’s a strategy to achieve a frictionless customer journey. By responding to customers’ individual needs and engaging in a 1-on-1 dialogue with them, you improve your relevance, strengthen the customer relationship and increase customer lifetime value.
Nevertheless, the way retailers interpret this continues to evolve, especially with the accelerating evolution of new AI technology. With the end of the year approaching, we’ve listed the 3 most important personalization trends of the new year on behalf of Building Blocks. Read them here!
1. We put theory into practice
Retailers had been talking about applying personalization for years, but it had often remained wishful thinking. Confidence in technology was still low, and AI felt like a black box to many. While they were mostly concerned with uncovering data structures and setting up customer segments, they did take the first steps toward a more relevant customer journey. Based on those insights, they experimented with customized marketing communications and customer journeys for segments with one or more characteristics in common. These were positive first steps toward personalization, but not enough to meet the expectations of the modern consumer. They expect an individual approach, and that requires a dialogue with consumers. Not just to meet those expectations once, but more importantly to make your entire communication throughout the customer journey 1-to-1. Fortunately, retailers are also realizing this, and moving from theory to practice (and thus from segmentation to personalization) now seems to be well and truly underway.
2. Technology is no longer a barrier, and is in fact being embraced
The growing tech industry makes it possible to enlist the help of technologies for the application of personalization and hyper-personalization in addition to in-house experience. Most e-commerce platforms and marketing tools now feature standardized personalization options, so that setting up initial test cases is easier than ever. Both the increasing availability of technologies and the proven successes will increase confidence in them. This is also slowly changing the image of AI, from a black box to an efficient tool that can help organizations move forward in terms of personalization. Take, for example, the AI chatbot ChatGPT, a software tool that simulates human conversations, writes code and produces blogs in seconds based on user input. In just a few days, millions of people consulted this chatbot.
These developments illustrate how accessible AI technology can be, and how quickly we’re embracing these developments. As the understanding of how things work increases, the sense of loss of control decreases. The next step is to further embrace AI and make the various technologies work strategically with each other. In 2023, we can expect a sharp increase in the number of retailers making AI technology the engine of the commercial department, and deploying it for 1-to-1 personalized communication.
3. Personalization will become the connector of processes and departments
In the market, we’re not only seeing that the importance of hyper-personalization is growing, but also that it’s becoming more widely accepted. Whereas for a long time personalization was used only by marketeers, we now see it touching more and more departments and being used more often company-wide. A logical step, since customer contact is not limited to the marketing department. Moreover, customers also see an organization as one entity, whether they are communicating with customer service, someone in purchasing or a store employee. Making personalization an integral part of the organization, making data available to every department and applying it in the same way creates synergy and thus a frictionless journey.
The challenge here is to engage stakeholders within all departments in the personalization strategy and create company-wide support. After all, only when everyone’s on the same page can personalization transition from a vision to a successful, commercial strategy.
In the coming years, the importance of personalization will only increase – both within marketing and company-wide. To both meet customer expectations and stay ahead of the competition, you will need to deploy 1-to-1 personalization in a way that suits your organization, brand and customers. This is even more the case now that technology is more accessible than ever, and the need for personalization isn’t just limited to the marketing department. So grab your chance and start the new year off well by rolling out a relevant and personalized customer journey for all your customers!