Survey Says: Personalization Growing in Importance for Retailers

As consumers, we can all relate to that frustrating experience when a preferred brand doesn’t seem to “know” us. For example, how many times has your bank promoted a product to you that you already have? How often have you received an email from a favorite retailer announcing a sale in a category you’ve never shopped (e.g., baby clothes if you’re not a parent; women’s shoes if you’ve only shopped the men’s category, etc.)? One-to-all and one-to-many communications no longer cut it, as we know firsthand how these messages often miss the mark. And as overall customer expectations heighten, more retailers are rightfully taking steps to prioritize personalization as an integral part of customer experience (CX) initiatives.

Our recently released Trends in Personalization study, which Evergage conducts annually with Researchscape International, reflects this increased emphasis. Results show that nearly eight in 10 digital marketers (77 percent) think personalization should be a bigger priority in their organizations, up from 73 percent in 2017 and 64 percent in 2016. The next step is to translate this increased prioritization to increased effectiveness, catering to shoppers in real time on a one-to-one level.

Benefits and Challenges Experienced

When personalization is done well, retailers and companies across industries realize big benefits. The survey data shows that nearly all digital marketers (98 percent) agree that personalization positively impacts customer experiences, with three out of four (74 percent) describing that impact as “strong” or “extremely strong.” Benefits marketers realize from personalization campaigns include:

• lift in business results (87 percent), with more than half citing a lift greater than 10 percent;
• increased visitor engagement (55 percent);
• improved CX (55 percent); and
• increased conversion rates (51 percent).

Yet challenges remain, particularly in the area of execution. For example, 65 percent of marketers give their company’s personalization efforts a “C” grade or below, and just more than one in 10 (12 percent) are “very” or “extremely” satisfied with the level of personalization in their company’s marketing efforts.

This lack of confidence stems, in part, from data challenges. Fifty-five percent of marketers say they don’t have sufficient data or insights to power effective personalization, and 69 percent note that their customer data is stored in three or more systems, hindering real-time action.

As we saw last year, cross-channel personalization isn’t the norm yet. In fact, 73 percent of marketers say their company has just a few — or no — channels connected.

Best Practices

Still, the one-to-one “dream” is no longer out of reach. Retail marketers can take easy and concrete steps to make it a reality. Tips for doing so include the following:

• Apply machine learning. More scalable and individualized than manual, rule-based personalization, machine learning allows computers to rapidly process vast amounts of data and make the best decision about which experience to give each person. Marketers can adapt the algorithms that power the process; no need to cede control to a “black box.”
• Clean up data. Bad data yields bad personalization — and bad personalization isn’t really personalization at all; it’s just an irrelevant experience. For an effective cross-channel strategy, retailers need to track a shopper’s behavior across their channels; combine the data with relevant customer information from other systems; interpret everything automatically to uncover preferences and intent; centrally store data with a single, unified profile for each shopper/customer; and act on the insights in real time.
• Start soon … and make progress incrementally. Retailers shouldn’t wait to deploy personalization until they’ve cleaned up all their data. They can start with digital channels first, using a personalization and customer data platform to bring in deep, contextual data from their sites, apps and email. They can then bring in other data sources incrementally, cleaning them up one by one.
• Email personalization: Go beyond {First_Name}. Just more than one in 10 marketers (13 percent) employ open-time personalization, where content is updated in real time based on a shopper’s up-to-the-moment behavior or catalog changes. Only one-third (35 percent) of marketers trigger emails based on a visitor’s behavior. This type of advanced personalization is proven to improve email relevancy and open rates.

As retailers look to a more digital-oriented future, personalization will continue to be a differentiator — underscoring that one size truly doesn’t fit all!

Paula Crerar is vice president of content marketing and programs at Evergage, which delivers real-time personalization to more than 3 billion people across the world.