It’s widely understood that personalisation is critical for driving customer loyalty, but what does this look like in practice? And how has new technology changed the way retailers approach personalisation?
Matt Gibby, Senior Manager of Solution Architecture at Adobe, has been helping retailers implement personalisation programs to drive loyalty for several years, so he has a solid grasp of the challenges and opportunities.
“On a surface level, you think back 15 years ago, and you did A/B testing, and you said, ‘Does this work better?’” Gibby said. “That was kind of the start, and now, it’s become so much more of a one-to-one situation and an ongoing relationship.”
Four key challenges
Speaking with Jodie Cheung, Senior Engagement Manager of the Digital Strategy Group for Retail at Adobe, at the NRF conference in New York, Gibby highlighted four main challenges retailers face when implementing personalisation programs.
“The first is the data. I’ve never stepped into a customer’s door and they’re ready with the data. It’s almost impossible to do,” he said.
Even if a retailer has a data warehouse, they often underestimate the time it takes to ensure the data relates to each other: “It’s not the fault of the customer, it’s the nature of the beast.”
Another challenge many retailers face is the people element. Different internal groups often have different priorities, which can make measuring success difficult.
“One group cares about loyalty, the other group cares about the shopping cart, the other group cares about content generation,” he explained. “The idea of building alliances and relationships with those teams is beyond critical.”
Processes are the third challenge: “It’s easy to make an MVP [minimum viable product], but you have to plan on the fact that you’re going to have to adjust those processes,” Gibby said. “You’re going to get some basic things in play, but there’s no way what you started with is going to serve you for two years. I think sometimes there’s frustration if people aren’t prepared for that.”
The fourth challenge is measuring success – especially if a retailer’s internal politics are not aligned.
“Agreeing on how you’re going to measure [success], and being willing to say, we might see a dip in this KPI, and everybody being on board with that, is critical,” Gibby said.
Measurable results
However, the retailers that get these four areas – data, people, processes and measurement – right, can expect to see significant increases in customer loyalty.
For example, Coca-Cola worked with Adobe to roll out a central martech platform to enable its global teams deliver personalised messages to billions of customers in real-time and saw remarkable results: an 89 per cent conversion rate among reengaged customers, a 36 per cent increase in revenue, and 117 per cent more clicks on personalised content.
“The engagement and bottom line impact is unbelievable,” Gibby said. “The escalating algorithmic effect that you’re going to have on that can be absolutely enormous.”
Another example is the US-based department store chain Macy’s, which worked with Adobe to create more personalised offers and recommendations and ultimately increase customer loyalty in five key areas: turning first-time visits into second-time purchases; ‘completing the look’ with a complementary purchase; encouraging online shoppers to shop in-store and in-store shoppers to shop online; increasing Macy’s credit card usage; and re-engaging churning high-spend customers.
“We were able to help Macy’s target 30 million customers with personalised offers, and they were definitely able to increase engagement with their core customer,” Cheung said.
Future trends
Retailers today can already offer their customers an unprecedented level of personalisation, and Gibby expects this trend to continue as the technology keeps getting better and better, so businesses will need to do even more to stand out in the future.
“I think the brands that are going to move ahead are those that have a degree of emotional intelligence, a degree of empathy and vision for their customers,” he said.
With one in three marketers spending at least half of their marketing budgets on personalisation, according to Adobe, brands doubling down on personalisation at scale are seeing the benefits.
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