We all love a great shopping experience but when targeted offers invade our personal space, a once cool shopping experience can suddenly turn creepy: How did they know that about me?
Blame it on the challenges of finding a balance in today’s digital economy. In 2016, a staggering 49 percent of all U.S. retail sales will occur online, and 38 percent of in-store sales will be web-influenced, which makes it harder to create meaningful interactions to well-informed consumers. Thankfully, there are ways to use technology and data more effectively to create the “magical moments” that creates brand loyalty.
To remain competitive in this era of the empowered consumer, brands should make personalization the number one digital priority, according to Brendan Witcher, an analyst with Forrester Research, who presented the session “How Data and Technology are Re-defining Personalization” at the SAP Hybris Summit in Munich.
“Most companies mistakenly believe they are delivering personalization,” said Witcher. “Most consumers, however, feel the opposite way.” Witcher said 40 percent of consumers feel most promotions don’t deliver anything of interest to them. The problem?
“Personalization today is often driven by single data point segmentation,” said Witcher. “The transaction with the customer must be their information, in exchange for value. The more you know about a customer, the better the personalization will be.”
Importance of Individualization
While personalized interactions with customers is great, an individualization strategy ensures brands can move away from using siloed data which doesn’t always provide an accurate view of the customer.
“With individualization, the idea is to help the customer,” said Witcher. “A personalized message saying ‘happy birthday’ doesn’t help the customer.”
Under an Individualization strategy, customers are treated as a segment of one using rich profiles. Instead of a data set 300 columns long, for instance, it’s 3,000 long with specific preferences.
“When you put all those data points together, you get a much better understanding of the customer,” said Witcher. “Then you can make really smart decisions about how to engage them. Individualization is about creating personal experiences across your ecosystem.”
Avoid the creep factor
Witcher says brands need to be careful when embarking on personalization and individualization strategies by understanding and respecting personal boundaries. It’s not necessary to show the customer everything, for instance, when an airline might reach out with an offer because they “noticed “you haven’t traveled in awhile.”
“As you build these personalized experiences you need to create some rigor in your system to avoid being too creepy,” said Witcher.
Here are four brands that know how to avoid the creep factor:
North Face – The North Face website asks “Why are you shopping?” which means North Face can deliver a better experience because they understand what you are trying to find. “It’s hard to understand why when you only look at a customer based on all the products they’ve bought,” said Witcher.
Sephora – does a great job of taking off the e-commerce blinders to consider every part of the customer journey. By capturing in-store engagement through digital and personal experiences, they prioritize personalization to create opportunities.
Starbucks – has a great mobile app and to the surprise of many of its users, it’s not used to make payments. “It’s a customer data capturing machine,” said Witcher. How, when and where Starbucks customers buy coffee determines promotion levels. So instead of blanket e-mails and text messages, Starbucks will instead send 5% off a favorite drink, for instance.
Nordstrom – expedited their digital transformation by partnering with Shoes of Prey. “It always makes sense to leverage partnerships with digital experts,” said Witcher.
Hudson Bay – is laser focused on creating great customer experiences. The company captures personal information in exchange for value, without being creepy, according to Witcher.
“Personalization done right doesn’t look like personalization, it looks like a great customer experience,” said Witcher.
This story originally appeared in the SAP Business Trends community.