2018 Retail Resolutions: Mastering Personalization
According to Boston Consulting Group, personalization is a game changer that will shift $800 billion of revenue to the 15 percent of companies that get it right over the next five years. With that in mind, it’s clear that mastering personalization should be on every brand’s list of 2018 resolutions. Implementing a successful personalization strategy is the key to unlocking superior customer experiences — a trait that's sure to increase any brand’s customer retention.
Monetate's 2nd Annual Personalization Development Study found that marketers in the U.S. and U.K. have made significant strides in their personalization strategies over the past year. Nearly 45 percent of retail respondents indicate that their personalization strategy is nearly or fully implemented, with almost 10 percent noting they have an advanced personalization strategy in place. Additionally, when comparing responses to the inaugural report, Monetate uncovered a strong correlation between revenue performance and the presence of a documented personalization strategy.
While retailers have been making active strides to improve their personalization strategies, challenges in implementation remain. In order to capitalize on personalization in 2018 and find their way into the 15 percent of companies that will master the technology in the next five years, retail marketers should consider the following.
The Importance of Data Quality and Availability
Personalization tools are evolving, and with that comes new challenges for marketers interested in up-leveling their strategies. With many retailers considering more mature and advanced personalization efforts, the availability and accuracy of data sources is crucial. When asked to rank which personalization obstacles had the most significant impact on their business, retail marketers overwhelmingly selected data quality. This represented a dramatic shift from last year’s survey, which ranked data quality as the sixth biggest challenge.
In addition to the quality of data, brands should consider the range of data resources they have available. With the proper tools in place, brands can leverage data from a variety of sources to create one holistic view of each of their customer’s behaviors. So whether a retailer is considering their first personalization platform or seeking ways to enhance an existing one, they must keep data quality and breadth in mind to measure the success of their efforts in creating unique experiences for customers.
A Personalization ‘Dream Team’
Personalization is most effective when it’s executed as a team effort with a broad spectrum of resources collaborating across an organization. Less than 5 percent of retail marketers indicated that they don’t have anyone dedicated to personalization. The remaining 97 percent have individuals in IT, data analytics, e-commerce and/or digital marketing involved, as well as the chief marketing officer. While the number of individuals involved in personalization strategy doesn’t correlate directly to brand success, it is crucial to have at least one resource dedicated to the program to manage its effectiveness. Moreover, having personalization-specific financial incentives in place will help drive accountability amongst those in charge of the program, which in turn will make it more successful. In fact, more than 70 percent of respondents that exceeded revenue expectations in the last 12 months have personalization-specific financial incentives in place.
Appropriate Budget Focus
The data found that the businesses most successful at hitting revenue expectations also report having a dedicated budget for personalization. It has become clear that specific dollars must be allocated solely for personalization efforts. However, the budget must be the right size and coordinated with other factors (e.g., financial incentives) to drive success. Having recognized this correlation, nearly 80 percent of retail marketers indicate a plan to increase personalization spending for 2018.
With a platform that provides a variety of quality data sources that can be easily extracted and analyzed, as well as a dedicated team and budget, retailers should have no problem mastering personalization. After doing so, they’ll see significant improvements in customer experiences and brand loyalty, and find their way onto the shortlist of companies dominating the industry for years to come.
Maribeth Ross is the senior vice president of marketing at Monetate, an e-commerce optimization and personalization platform.
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