Retailers of all sizes and across verticals have gotten religion about the need to ‘personalize the shopping experience’ for consumers. But does that really mean developing a true one-to-one capability? The truth is that consumers may not necessarily want personalization – they want solutions that are relevant to their lifestyles. There’s a difference!
Since consumers began using their smart mobile devices as an integral part of their shopping journey more than a decade ago, many in the technology and retail industries have advocated for something approaching a true one-to-one level of personalization of the product offer. Why? Because the richness of the data thrown off during consumers’ path-to-purchase, coupled with today’s powerful data analysis capabilities, made it irresistible.
While the technologies that enable one-to-one personalization may be state-of-the-art, the concept isn’t new. An April, 1995 Harvard Business Review article Do You Want to Keep Your Customers Forever? spelled out the challenge clearly: “Customers, whether consumers or businesses, do not want more choices. They want exactly what they want—when, where, and how they want it—and technology now makes it possible for companies to give it to them.”
The last generation of retail winners was dominated by companies such as Walmart and Tesco, which excelled at delivering highly standardized assortments at low prices in a low touch environment – the antithesis of “personalized.” Consumers had to slog through aisles of merchandize (selected by the retailer) to get what they wanted. In short, the experience wasn’t about what consumers wanted to buy – it was about what retailers had to sell.
But here’s the question: how much “personalization” do retailers really need in order to deliver the right product at the right time, and in the right way? In today’s retail environment, it’s not about what retailers have to sell, it’s about what consumers want to buy. That’s relevance. Being relevant means being responsive to the current lifestyle need that a shopper is investigating. And while that’s not the same thing as getting personal, there’s very little evidence that consumers want to get truly one-to-one.
To be relevant, retailers need to understand the context of the consumer’s lifestyle need. While context can vary tremendously, it’s observable if retailers pay attention to consumers in their paths to purchase in this digitally-obsessed world. In the “old days,” the the shopping journey happened within the four walls of a store (shoppers investigated potential solutions to a perceived need, selected the desired solution, paid for it, and took possession of it). All of these steps were physically observable, and good retailers were able to offer assistance at just the right moment to move the consumer towards a purchase.
Today, those steps are still observable because they often occur in the digital domain. Retailers are getting the message. A recent RSR study revealed that, among the top challenges that retailers seek to address through better analysis of consumer data generated by mobile devices, is that consumers want “relevant content based on their personal tastes and point of interaction.”
To be relevant to consumers in the context of the lifestyle need, retailers need to answer a few questions: Where is the shopper in the shopping journey? What does the retailer know about the shopper? How well does this particular journey match an identifiable model? How close is the shopper to making a purchase decision? Let’s briefly examine where the answers to these questions can come from:
- Where is the shopper in the shopping journey? Frequently, that question is answered through an examination of a consumer’s digital activity, for example, a clickstream or a search;
- What does the retailer know about the shopper? Consumers share information via their past purchases as well as stated preferences they offer by joining a loyalty program. Retailers can also glean a lot about lifestyle preferences from consumer responses to digital marketing campaigns and social media activity;
- How well does this particular journey match an identifiable model? As retailers’ customer database grows, so does their ability to develop model shopping journeys using new analytical technologies. A consumer’s in-flight shopping journey can then be matched to the right model, in time to tailor the digital experience to best meet the lifestyle need;
- How close is the shopper to making a purchase decision? As consumers narrow their search, retailers can shift the interaction from content to commerce.
In response to an overarching concern that digitally-enabled consumers have grown intolerant of impersonal shopping experiences in store, retailers are placing a lot of importance on engaging with customers in real-time. But retailers need to be concerned that they might trigger a negative reaction from consumers if the nature of their digital outreach is perceived as creepy.
The good news for retailers is that there’s no need to get too close to understand consumers’ lifestyle needs. They just need to pay attention to what each consumer is doing, and offer the right solution at just the right time in just the right way. That’s being relevant.
Editor’s note: Whether it’s called personalization or relevance, AI is at the heart of delivering a better consumer experience. Check out the Salesforce best practice guide to AI.