Creating real-time personalisation of the shopping experience has been the aim of retail stores since the moment the internet began to take their shoppers. Few have achieved it. The problem is that so many retailers, and even their hired “experts”, mistake audience segmentation and customisation for the more illusive personalisation that is required to keep a customer happy and spending money with them.

 

Real-time Personalisation: the buzz-phrase that won’t go away

What is the real-time personalisation of the shopping experience? Back in the realms of independent retail stores, it was well-trained staff that could work out what a customer wanted from a brief description, size-up (sometimes literally) the needs of a customer before they even spoke, and had an encyclopedic knowledge of the product range available in their store.

The environment changed. Twenty years ago, the internet and the infancy of online retail made things different, not better or worse, but different. Existing stores expanded their reach beyond that of the physical store, entrepreneurs began retail businesses that only operated in cyberspace, and chains made the web their own by combining the power of multi-city physical stores with the increasing reach of the internet. Moreover, as customer reach increased the application of broad demographic targeting was seen as a huge win in terms of client engagement.

Maybe ten years ago, addressing an online client by their given name in mail-shots or when they logged in to the store was considered a big win for real-time personalisation of the shopping experience. Now the client wants and needs more from the online retailer.

It’s not just the internet that changed things, changes in social and economic dynamics altered the makeup of the workforce. More employment opportunities for women meant that more women were following a career path, rather than a lifetime of retail assistant work. Economic shifts meant that the universally low paid wage of the retail assistant was no longer sufficient for survival when supporting a family, in a time when it has become almost essential for a family to have two working parents to survive. Employment in entry-level retail positions is now the province of the young person, either as the first rung on the retail management ladder or a brief stop while studying in another field.

Audience Segmentation vs Real-time Hyper-personalisation: Here’s a tip, they aren’t the same at all

We covered audience segmentation before, and it is imperative to understand that segmentation and personalisation are not the same things. Using segmentation as a personalisation technique relies on people behaving (and spending) identically to everyone else in their demographic range, whether that is by age, gender, geolocation, income, or a combination of them all. That never happens.

While segmentation can assist retailers in identifying their target audience and the ranges that occur therein, they fail to engage shoppers on a personal and individual basis.

If you were to take any significantly large city and apply a demographic overlay, for argument’s sake, we’d assume we are working on a physical store with online activity. One of your demographic audience targeting definitions may look like this:

Geolocation: Greater Manchester

Age: >45

Gender: Male

Income: >£40,000/annum

The above description is not even a “paint by numbers” picture of the person to whom you want to apply personalised marketing and pricing, to customise their shopping experience; it’s barely even an outline.

Real-time personalisation requires the broad strokes of segmentation, in the initial stages, and then the more granular approach to genuinely engage them. You can analyse behavioural and psychographic data that will assist in addressing contextual and specific buying patterns, but true personalisation has to evolve using shopper-specific patterns.

PERSONAS AREN’T ENOUGH

Take the same ‘man’ as described in the broad sketch above and give him a persona, better yet, give him three, and you have three entirely different men, who may never willingly shop in the same store, wear the same clothes, eat the same foods, or choose the same decor.

Previously, persona creation allowed marketing departments a method of creating imaginary target customers, for whom they could build a detailed picture and customise their marketing strategy accordingly. The problems arise when these fabricated personas don’t match actual people. A marketing persona is a combination of averages and likelihoods based on individual demographic indicators and empirical observations. When you look at individuals, they rarely match a marketing persona, except in the broadest sense.

A broad persona is enough to target audience segments, that’s all.

Real-time Personalisation Needs an Omni-Channel Environment

In many situations, it is increasingly difficult to implement personalised shopping experiences in primarily physical stores. Combining the ability to personalise across shopping channels allows freedom for online shoppers to take the time when they have it.

More stores are taking their goods to the web to maintain relevance in the growing online marketplace. Moreover, some pure-play online stores are taking products to the physical realm.

An example: A person browses the web in their lunch hour on their laptop, they’re looking for some seasonally updated workwear or some warm weather holiday items. They choose an appropriate online store, with whom they already have a relationship, with a reasonable price range that appeals to their sense of taste, and they begin placing items in a basket.  The lunch break has ended, but the customer has not finished shopping, nor have they decided on the final items that they wish to buy.

In an omni-channel environment, they can continue browsing and shopping on their commute home with the app on their phone, possibly even beating the deadline for next day delivery to a pick-up point near their workplace. For real-time personalisation, the items placed in the basket and the patterns created by previous purchases can place look-a-like or similar styles in front of the shopper to ease their buying journey. Potentially, the shopper may be browsing in advance.

Habitual shopping patterns can be inferred from historical data. If a client has a history of browsing prior to payday with a view to buying after they have been paid, it can be a significant indicator to hit them with an email offer at the right time to induce a higher expenditure. Taking the customer data collection from all channels that your online store uses

Why Personalise at All?

It is a fair question to pose, in light of the hurdles evident in creating a personally targeted approach to customer experience. The fact is that while individuals have become more sensitive to corporations and companies having their personal details, they are willing to trade their privacy for the improved shopping experience, tailored offers, and convenience provided by a retailer that understands their needs.

It can seem somewhat incongruous that, at a time when price comparison is rife, and the client is continually searching for a better deal, customers might trade the hassle of sifting through comparison sites for the time-saving benefits of good personalised marketing and pricing. While price is crucial, so too is time.

Throughout the developed world we have become increasingly time-poor. Longer working hours, longer commutes, two-parent working families means all housework, shopping, and maintenance has to be done outside working hours. When a real-time personalisation approach is taken to marketing, in a way that is congruent with previous shopping habits, selling more ‘time’ to do other things is the best way for a retail business to engage and cement their relationships.

When customers have made a beneficial exchange of information for time and convenience, they are more likely to share that information with others, give positive feedback on customer questionnaires, and act as a brand ambassador long before they have any desire to evangelise on the provider.

Personas come and go, but People return

It all comes down to remembering that your customer is a person first, whether they fit your marketing ‘persona’ is debatable. If your business appeals to people and the things that they hold dear, you will appeal to more people.  The crucial thing to remember is that real-time personalisation is only at its most effective when the personalised approach is also temporally tailored to the individual shopper.

There have been numerous studies done since personalisation began to impact our buying choices, from the first mail shot with a name at the top and a cheery welcome on logging in.

I’ll leave you on a couple of statistics from a study carried out by Segment:

On encountering a personalised shopping experience 44% of shoppers are likely to become repeat customers and 22% are likely to leave a positive review or feedback on social media.