Research Proves Retailers Want Personalization, But Still Struggle With Customer Identification

The first step to good marketing is insights, but that's proving difficult for many retailers, according to a new report from WBR and OneMarket. In a survey of 100 U.S. retail professionals, 64 percent reported that they were unable to identify the majority of their website visitors. At a time when personalization and machine learning are the way to more profitable marketing, customer identification is a crucial first step.

Difficulty Bringing Insights Together

Retail marketers cite several reasons for the headwinds they face in customer identification. Fifty-seven percent report that they're not onboarding offline CRM data, creating an incomplete picture of customers, a majority of which search, shop and buy across channels. The inability to create a single view of the customer not only makes online personalization inaccurate, it can frustrate consumers, who expect a consistent and relevant experience. Offer management, product recommendations and other fundamental marketing actions rely on an accurate customer view.

What’s more, retailers face shortcomings in properly identifying customers across channels. In fact, many are operating blind. Twenty-four percent of all retailers surveyed are not able to uniquely identify a prospect or customer across online and offline channels, severely limiting their ability to match customers to relevant messaging. Additionally, 10 percent claim an identity resolution strategy is not a priority for their company, which begs the question: How successful can they be in a world where shoppers expect to be recognized and provided personalized messaging?

A Focus on Better Insights

Luckily, retailers are investing to improve in this area. Many indicated that they're starting to integrate offline CRM data to increase their customer insights and ability to develop predictive intelligence. This is a positive indicator that retailers are aware of their current marketing shortcomings, and are prioritizing insights-driven marketing to improve their one-to-one connections with prospects and customers.

These investments will be useful for several marketing activities. Among retailers that are onboarding offline CRM data as part of their ID management, 51 percent plan to use the data for customer insights and predictive modeling, and the same number also plan on implementing website personalization. While attention is often paid to predictive offers and personalized marketing, customer identification can drive many other fundamental capabilities that help to close the loop on marketing campaigns, from persona building to pricing to campaign measurement.

Taking the Next Step: Deep Learning

Most encouragingly, the retailers surveyed are focused on knowing more, and are trusting new technologies to help guide them. The research shows that nearly half (48 percent) are prioritizing the adoption of deep learning to improve their own marketing methods, expectations and goals next year. Deep learning, using artificial intelligence or machine learning, delivers a richer understanding of customer needs and patterns that can be used to deliver a much more varied approach to individual customers — e.g., predicting “next best offer” product recommendations, identifying new segments for marketing, helping deliver accurate pricing, and much more.

For marketers to reap the benefits of deep learning, they must first follow through on their plans to consolidate the data they have online and offline, and invest in processes and technologies that build on that customer identification to constantly enrich their understanding of consumers. From CRM data to in-store and third-party augmentation, customer identification is the key to deep learning. Data lays the path. With the right approach to identifying and learning about customers, retailers will see better customer engagement, retention and return on investment over the long term.

Dave Goulden is chief product officer at OneMarket, the leader in customer data management and activation, empowering retailers to acquire new customers and dramatically increase the lifetime value of existing ones.