Shopping Behaviors Have Changed, Increasing the Need for Hyperpersonalized Experiences
COVID-19 has changed the way consumers behave and therefore how businesses operate. Many were forced to adapt essentially overnight to digital channels. In fact, Microsoft’s CEO reported experiencing two years of digital transformation in two months. This was also the case for many retailers, both e-commerce and storefront-centric businesses.
These sudden behavioral changes have exposed fractures and friction in the customer experience, many of which can only be resolved through new levels of real-time personalization.
Research from the Harris Poll showed us that 63 percent of customers expect personalization as part of a standard service from companies. Businesses that embrace this approach have reaped the rewards as well. McKinsey found that personalization helps brands achieve 20 percent to 30 percent increases in customer lifetime value across high-priority customer segments.
During a time when consumers are staying home more to adhere to social distancing guidelines and ensure their own safety, these expectations are only increasing. Redpoint conducted a survey around personalization standards in April, finding that 35 percent of consumers have upped their expectations for both customer experience and personalization during this time. If brands weren't already personalizing their touchpoints with customers, there's now a customer mandate to do so. It’s time to act with ambition and urgency to not just succeed with customers in this new reality, but to survive.
Technology’s Impact on the Future of the Retail Industry
Many expect to see a sustained shift to a digitally dominated experience across new touchpoints and initiatives. These include contactless payment options; curbside pick-up; buy online, pick up in-store (BOPIS) offerings; and more obviously, the shift to e-commerce and online shopping. Whichever path a retailer takes, a deep understanding of the customer is a foundational requirement to enable a superior customer experience. The need becomes more critical as preferences change and new channels emerge.
For example, a state-of-the-art curbside pick-up service has a lot of moving parts. Each interaction — web browsing, shopping cart fulfillment, a transaction, pick-up logistics — offer both an opportunity to delight the customer with a personalized experience, or drop the ball. This could be a failure to recognize the customer across multiple devices, a poor website experience, miscommunicating pick-up details, or sharing ill-timed offers.
To knock these digital experiences out of the park, retailers should consider adopting a customer data platform (CDP) that can provide them with every source of customer data — structured and unstructured, batch and streaming, internal and external — for a 360-degree view of the customer. A continually updated record of every customer in its system, which includes a customer’s preferences, behaviors and transactions, ensures that a retailer’s marketing team is keeping up with customers on their journey in real time.
There are too many variables to fully forecast the future, as consumer behavior changes, technology innovations, and brands’ direct-to-consumer approaches are ever-evolving. What is clear though is that retailers need a flexible and powerful way to create differentiated experiences. There's a way to do this that both leverages existing investments in last-mile touchpoints to the consumer, while empowering brands to create innovative customer experiences in the future.
With the retail industry facing uncertain prospects in 2020, we may wonder what retailers and brands will succeed and which might fail. For those that can master both a personalized and omnichannel presence with their customers across all touchpoints, they will come out on top. Offering personalized experiences will require a continual "upping of the game" to attract customers and increase brand loyalty during a time when consumers are more discerning as to where to spend their next dollar.
John Nash is the chief marketing and strategy officer at Redpoint Global, a customer data platform and engagement hub.
Related story: Reaching the Omnichannel Consumer: Start by Listening