Hyper Personalization | Retail
Time magazine named “you” as it’s Person of the Year in 2006. This was in recognition to all the anonymous content creator who contributed to wiki, YouTube, Facebook etc. With people pouring in their behavior in form of digital content into the web, it has become easier for organization to crunch this data and provide more meaningful and personalized content to it’s user.
Commonly used personalization techniques
- Understanding Audience — Leverage the behavior of many to recommend trending contents
- Semantic Understanding — Identify and recommend products based on content similarity
- Segmentation — Propose different recommendation to user based on the segment they are categorized into.
- 1:1 Personalization — Uniquely tailor the experience for each user based on his/her persona and point-in-time.
A Gartner study in early 2019 reveled that companies that provide a personalized experience to their customer, outperform their competition by almost 30%. On top of that, only 22% users are satisfied with the current level of personalization.
Customers are no longer content with segmentation based personalization. They crave 1:1 personalization and baring a handful of top organization like Amazon, Netflix and few others most of the other player are at just not there. Average retailer spends about 0.7% of their revenues in personalization while top retailer spends about 0.9% which 1.3 times more.
What lacks in current personalization
Current level of personalization, like a bad stereotype that puts individual into rigid and static groups. I get recommendation for casual shirts since I bought a casual shirt a week back. In all likely hood that might not be what I need right now, a week later from my last purchase.
Benefits of tailored personalization
Customer loyalty — Connecting with the customer at a logical level ensures loyalty and repeat business.
Increase in basket size and value — As per a BCG research, customers, if provided with a higher level of personalization are 110% more likely to add additional items and 40% more likely to spend more.
Decrease in return of impulse buys — Deep understanding a customer’s persona means customer who impulse buy from the hyper personalized recommendation will find a use of the product and are less likely to return it.
Conclusion
What gives hyper-personalization greater impact is when consumers feel like their interactions with a brand are logically connected. Instead of disjointed offers and opportunities, marketers who take charge of the buyer journey are designing connected customer experiences, often by partnering with third parties that help them deliver a broader, holistic value proposition.
Knowledge of customer intent and the point-in-time context of the shopping journey is important to achieve hyper personalization.
References
Shoppers expect more personalization
The Next Level of Personalization in Retail
Hyper-Personalization Is The New Black. Are Marketers Ready?
Why Hyper-Personalization is The Future of Marketing (And how to do it)
