Creating personalised shopping experiences has long been a priority for retailers.
‘Personalisation’ started out as the in-store sales assistant who could instantly infer basic information about their customers – gender, age, etc – as well as learn about their preferences and offer them advice throughout the browsing and buying journey.
As customers complemented – or replaced – in-store with online experiences, retailers sought ways to replicate this one-to-one approach, whilst catering for far larger numbers of visitors.
As such, there’s been a rush of solutions providers claiming to be personalisation experts, and eager to promote their brand of ‘personalisation’ to retailers. In this confusing environment, how can retailers determine what ‘real’ personalisation is? How can this help shape their omnichannel strategy? And what should personalisation look like for consumers?
Segmentation, customisation and contextualisation
Firstly, retailers should be clear on the differences between segmentation and personalisation, as many vendors promise to enable the latter, whilst their solutions are only capable of delivering is the former.
Segmentation involves grouping shoppers based on demographics like age, gender, geographic location and income. Different experiences can then be delivered to different groups of people who share certain attributes. However, while this customises the shopping experience, it does not truly personalise it; it delivers recommendations based on group and demographic behaviours, but does not engage shoppers on an individual level.
For example, a retailer may have a number of customers who are male, 45 years of age, who live in New York, and are in the top income bracket, yet each man within this group may have wildly different preferences.
Retailers must go beyond segmentation (basic personalisation) and combine historical cross-session knowledge of each visitor to their website or app with real-time context, including location, time of day and weather. This will enable retailers to hone the way they target consumers by delivering more relevant content and recommendations that speak to each visitor’s interests and specific circumstances.
While a number of retailers will be using personalisation solutions that leverage some of this contextual information, fewer will have adopted platforms which leverage perhaps the most important information: real-time action.
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