Imagine walking into a grocery store to do your weekly shopping only to find that shopping carts were not available. No, they weren’t all being used. There simply wasn’t such thing as a shopping cart (yet). Seems like a crazy concept, right?
At the recent MITX eCommerce Summit in Boston, Forrester analyst Brendan Witcher started his talk with the story of Sylvan Goldman, the man who invented and introduced the shopping cart in 1937 at the Humpty Dumpty supermarket chain in Oklahoma City.
Much to Goldman’s surprise, the invention did not immediately catch on. Men thought the carts were too feminine and women found them suggestive of a baby carriage. Goldman resorted to hiring actors to push the carts around the store to demonstrate how useful they could be and greeters at the door to explain the concept.
Imagine inventing something that you know could make the shopping experience so much easier, only to find it would be an uphill battle to adoption. We all know there is such a thing as being too far behind your customers, but there is also such thing as being too far ahead.
Segmenting Based on the Individual
In the age of the customer, retailers are being smarter about their investments – ensuring they align with what empowered customers today really want. That’s why the number one tech investment for the third consecutive year is personalization, according to Forrester Research. Before you give the inevitable eye roll, we are not talking about yesterday’s personalization technologies (product recommendations are so 2015). We are talking about the evolution of personalization – individualization.
Witcher explained that personalization has historically been driven by segmentation, meaning most of the time, retailers are getting it wrong (it’s akin to the ‘even a blind squirrel finds a nut once in a while’ idiom). There is not enough granularity in segmentation do deliver the valuable experiences that today’s customer is ready for. Individualization, he said, is the next progression of personalization. One that understands why customers are on your site or in your store, and captures that intent by truly understanding each shopper at an individual level.
Unlike contextual marketing, which Witcher called “merely a tactic,” individualization is a strategy. He gave a great example of email individualization in action – the Neiman Marcus shopping app that enables shoppers to snap a photo of an item, find it online or in store and shop that item, unifying the digital and physical experiences while collecting valuable data about shopping preferences and behaviors. Included in the app is the ability for shoppers to ‘like’ and ‘dislike’ items, giving Neiman Marcus further insight into each customer. All this data collection empowers Neiman Marcus to make incredibly smart decisions about how they engage shoppers and create personal experiences regardless of channel.
Great experiences aren’t creepy
Customers want retailers and brands to understand them, but they also need to see value for giving up information about themselves. Today, 61 percent of shoppers are willing to share personal information with retailers in exchange for a better experience. But over the years, personalization has gotten a bad rap for being “creepy” in execution.
Witcher shared three pieces of advice with retailers implementing new personalization strategies this year:
1. Get a system of insights in place before a system of engagement. Don’t go in blind. Find a way to get a 360-degree view of your customers before you even think about an engagement plan. For instance, if you know a customer always shops on Saturdays, don’t try to engage with them on email on a Sunday.
2. Be transparent and deliver value. Personalized experiences shouldn’t make your customers think you’re following them all around the internet, watching their every move. Be overt when collecting customer data, but be covert when using it to deliver personalized experiences.
3. Don’t overanalyze. Many retailers overthink personalization to the point that they never actually get started on an impactful plan. Just start somewhere – with something. You don’t need to create the next Starbucks app mobile app in a day, just take one step at a time. But have a long-term plan to guide the way.
To remain competitive in today’s increasingly volatile retail environment, retailers are making personalization a number one priority. Invest in a system that understands your shoppers at the individual level and provides an accurate view of each customer’s evolving tastes, moods and behaviors over time. Remember, personalization done right doesn’t look like personalization at all. It looks like an optimal shopping experience for the customer and retailer alike.