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[13 comments]

Technology brings personalization back to brick & mortar stores

May 7, 2014

Through a special arrangement, presented here for discussion is an excerpt of a current article from the Commerce Anywhere Blog.

Personalized service was one of the casualties when the retail industry moved from independent stores to chains. Personalization at scale has always been difficult, but technology advances in the last ten years have helped. One only needs to visit Amazon.com to see what automated personalization can accomplish. By personalizing the customer experience, retailers like Z Gallerie and Zenni Optical are increasing customer engagement, converting more sales, and cross-selling/up-selling. Typical approaches include:

  • Product recommendations
  • Searchandising and faceted navigation
  • Personalized e-mails
  • Webpage curation
  • Targeted alerts and offers

All of these approaches must effectively leverage many data sources. While these techniques are fairly mainstream in the digital world, they are only now making inroads in the physical stores. The combination of indoor-location and mobile apps has opened new opportunities to find customers and provide relevant, personalized content while they are shopping. Of course there has been much debate over the privacy concerns, but as long as retailers focus on being a butler rather than a stalker, those issues will work out over the long-term.

The three C's for personalization are Context, Content, and Conduits. Understanding each is important to the overall personalization effort.

Context makes message more relevant and therefore more sticky. Context starts with location, which includes tactics like geo-fencing and in-store location. Messages delivered as the consumer drives near a store or as they browse a particular department within the store are relevant to the current situation and therefore more helpful. Context also includes what might be known about the customer. Unidentified customers might rely on what's known about local customer segments, while an identified customer might include detailed purchase history. If the customer doesn't own a dog, don't offer them dog food.

Content includes product data, offers, and lifestyle information. Not everything is about a coupon. A sporting goods retailer, for example, might alert customers about local sporting events. Alerts for new shipments or upcoming promotions are also helpful to customers. Help customers improve their lifestyles without always overtly selling to them.

Conduits refer to the different touchpoints for contacting customers. Obviously the web is an excellent opportunity to present offers, but e-mail and mobile apps can be just as effective and are sometimes more appropriate. Using a combination of conduits, possibly managed via marketing automation, can provide the most consistent messaging. Be careful to note a customer's contact preferences.

Connecting the data sources, optimization science, marketing execution, and delivery technologies will round out the personalization solution. Remember, customer centricity is a philosophy, not a feature.

Discussion Questions:

What web practices supporting personalization will likely translate well to physical stores? Which of the three C's for personalization described in the article - Context, Content, and Conduits - will be most challenging for physical stores to deliver?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Which of the three C's for personalization described in the article will be most challenging for physical stores to deliver?

Comments:

Content, because you are never done. Content cannot be handled by technology alone. It needs to be created by creative people who are talented and can develop material that cuts through the clutter and is relevant and will resonate with the shopper.

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Zel Bianco, President, founder and CEO, Interactive Edge

The ability to use data that identifies intent-to-buy rather than basing analytics on past transactional data will translate well to brick & mortar stores. That is connecting what a consumer does online to determine what to buy and where and when to shop with the physical activity shopping through loyalty cards or other tools to better engage the consumer. In this way, retailers and suppliers get a much better picture of the shopping lifecycle and can collaborate to influence the process. This should result in more successful (i.e. profitable) promotions and fewer failed product launches.

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Ron Margulis, Managing Director, RAM Communications

A different way to look at this is from the shopper's perspective (where the journey starts outside the store). If you start with that as a premise, and drive your in-store personalization strategies based in part on consumer engagement/touchpoints out-of-store, I think your probability of success increases a lot.

A very simple example is being able to browse, check reviews, create wish lists, and other out-of-store actions, and have these support a better in-store experience (relevance, context and content). Maybe pointing a customer to a product's location in the store, a limited time promotion, or complementary products/offers - all based on that out-of-store-engagement - can yield a differentiated store customer experience.

With a lot of omni-channel focused on the transactions that happen across touchpoints, it's important to remember that omni also refers to the shopping journey independent of the transaction.

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Gib Bassett, Global Program Director for Consumer Goods, Teradata Corp.

Personalization was definitely a sorely missed casualty of mass marketing and big-box chain stores. Leveraging new and emerging data science and technologies are most definitely helping to address personalization at scale. Retailers can present content and context if they leverage multiple data points and coordinate the development of the appropriate content within their Marketing organization.

The most challenging of these three for retailers is conduits. Delivering a relevant and personalized message to a digitally empowered shopper across all the available in-store channels is a daunting task. There technologies available to maximize this opportunity, but it is designing and implementing the correct workflows associated with these technologies that will fulfill this promise for your shoppers and customers.

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Adrian Weidmann, Principal, StoreStream Metrics, LLC

In-store context will prove to be challenging, but not insurmountable. The bigger issue right now is with privacy and getting consumers' permission to engage them in-store. It seems retailers have forgotten the early lessons from the web in that you have to give something to get something.

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Bill Davis, Director, MB&G Consulting

Retailers, brands, and merchants leverage their investment in bricks and mortar stores when they equip their sales staff and product experts with #CEM, to personalize the experience of every shopper, so they can sell what, when and where the consumer wants to buy.

timo platt, founder, PoKos

Web practices supporting personalization should be used discretely and seamlessly. Context and content should be in concert with whatever is on the web and enforce the brand. Data about a customer should not replace face-time. Having accumulated data about me does not automatically translate into a relationship with me. You may know my purchasing patterns, my size or what kind of pet I have. That does not mean you know me.

That's why so many shoppers find it creepy to be approached by someone who they have never met with foreknowledge of their purchasing history or intent. Having this type of information at the fingertips of sales people at brick and mortar stores shouldn't replace the classic approach of serving customers. Greet them with a genuine smile and a willingness to engage with them as people, not as data. If you have regular customers, you should know their tastes and buying habits and be able to suggest purchases based on a real relationship - not a virtual one.

Please don't assault me with pre-knowledge of my buying habits without the preliminary small talk and open-ended questions about why I chose to shop at your store. Treat me like a human being and not a data stream, and I'll be more likely to come back to your store. Otherwise I may as well shop online and skip the creepiness.

'RetailRetell'

Too many personalization programs fail because they don't focus on the intent of the customer. Often the technology takes center stage. Personalization on scale in an omnichannel can work, I did this. But often, companies spend their time focusing on data and what tech to use without learning about customer needs. The 3 C's are great but knowing the customer trumps all the C's.

Edward Chenard, Consultant , Echenard

I know I am a broken record about this but...while the 3 C's are good, if we want to personalize the in-store experience, we have to start by looking at the various personas of the customer and their preferred paths to purchase.

Once the paths to purchase are known, incorporate the C's along the way that make the most sense. Say, I have done my pre-store shopping, know what I want and just want to dash in and get it now. What I need to satisfy my path to purchase is directions.

Give me a location-based app (conduit) to find the thing or a map (content) to get me there. Get it? And that's my 2 cents....

Lee Kent, Brings Retail Executives Together to Meet.Learn.Profit, RetailConnections

At this point I think experimentation is in order, maybe a little research. There may be a point at which consumers find in-store web tactics too intrusive. Other messages won't stop because someone is in the store. The next layer of in-store targeted messages will have to break through the clutter of the other targeted messages that appear regardless of being in the store, outside of the store or somewhere else entirely. Just saying....

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Joan Treistman, President, The Treistman Group LLC

In the Star Trek series Captain Jean Luc Picard was famous for saying: "Make it so!" Worked great in fictional space travel, NOT so much in retail.

Retailers saying that they will "personalize" is a whole lot easier than doing it. The barrier right now is much to do with the availability of the digital technology. There are two inherent retailer obstacles to using technology to personalize service for today's omni-channel consumers:

1. To achieve things like personalized "context" requires massive data integration and delivery of "customized" slices to individuals. This requires a significant investment in both systems and incremental staffing that many struggling retailers cannot afford.

2. Talent. Most current bricks and mortar retailers have the historical legacy, staff and culture required to run big box stores with mass advertising. Retailers are lacking the new "digital talent" with the skills required to execute the 3 C's.

At the end of the day, consumers have become quite adept at finding content and context via search activities. What they indicate that they crave is interaction. Too many of the conduits are "push." The retailers that find a way to enable interaction via technology will quickly achieve differentiation.

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Chris Petersen, PhD, President, Integrated Marketing Solutions

Content and conduit are both translating fairly easily from ecommerce to retail environments. Content - providing value-added information to consumers based on their expressed and implicit interests -- support the ultimate retail positioning, which is "you know me." Such efforts help reinforce the value of the relationship with the consumer beyond the "deal of the day."

Conduit also works well; specifically, you should communicate to consumers in the channel they prefer, when they prefer to receive the information. Asking for preferences, as well as analysis of response (e.g. click/open information) will help to answer those questions.

Context becomes a bit more tricky. Consumers have a very fast "creepy" factor when retailers use their location data. Now, that sense will clearly dissipate over time, but retailers should walk into that space very carefully and with full consumer permissions.

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Mark Price, Managing Partner, M Squared Group, Inc.

Geolocation services from various providers are being implemented in some stores now around the world. As the technology matures, I believe this will be a major "contextual" "conduit" to drive "content." Other vehicles to entice shoppers will continue to evolve, including good, old-fashioned P.O.P. messaging.

We shouldn't be too quick to say that every retailer - and for that matter, CPG brand - will resort to technology of today and tomorrow to capture in-store shoppers. The vast majority of retailers will maintain in-store signing as they have for decades.

I think the move to drive true loyalty at store level should include some of the aspects mentioned in the article.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

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