The end of shopping’s boundaries: Omnichannel personalisation

When it comes to personalisation, the next digital frontier is the physical world. As surprising as that may sound, companies that are able to personalise the customer experience across physical and digital channels – omnichannel personalisation – can achieve a 5-15% revenue increase across the full customer base.

While the focus of personalisation efforts has generally been the customer’s online journey, in industries such as retail, convenience, grocery, and hospitality, more than 80% of sales occur in a physical location. Getting better at personalising the offline journey is just part of the answer. The best companies are focused on improving how they personalise the on- and offline journey together.

Barriers to omnichannel personalisation

Many companies recognise the need for omnichannel personalisation, but a number of reasons tend to stop them from carrying through on it:

  • Assumption of large technology investments with far-off return on investment. Putting the tech to work – both hardware and software – can feel like a large investment of time and resources. For example, personalising the in-person experience requires enabling digital touchpoints (which often don’t exist) in locations such as customer-facing digital screens, kiosks, or tablets for staff to use.

  • Difficulty of delivering seamless customer experiences and training employees. Personalising the in-person experience often results in changes to the customer-journey flow, which, if not done thoughtfully, can hurt the customer experience.

  • Complex organisational and cultural shifts. Omnichannel personalisation requires companies to rethink their organisational structure, capabilities, and incentives across the digital and physical parts of the business. This shift can happen only when incentives are aligned with outcomes and measurement is done across online and in-store channels.

Getting omnichannel personalisation right

To overcome these barriers and drive growth, companies should take the following five steps.

1. Define the omnichannel personalisation strategy and learning agenda:

The best companies have a crystal-clear understanding of the key influence moments in the customer journey, from generating awareness pre-visit to converting during visit to deepening engagement post-visit. They then identify the desired business outcomes at each step of the journey: incremental trips, basket size, and/or customer satisfaction. Finally, they prioritise the use cases to start testing based on ability to deliver business benefit and value to the customer.

2. Address five digital touchpoints to help activate personalised experiences in the physical environment:

To achieve omnichannel personalisation based on identified use cases, companies need to connect digital and physical footprints. Companies should focus on five touchpoints where this convergence happens: mobile app, digital displays, interactive screens, tech-enabled associates, and point of sale.

By systematically evaluating the consumer impact of these touchpoints, organisations can understand customer behaviours and develop more effective two-way communication strategies. For these interactions to be effective, however, companies need to identify customers accurately, typically through self-identification or digital identification. Customers can be identified automatically via location tracking on their app or through a wearable device or by means of visual recognition (which varies by market due to legal issues), or they can self-identify with a digital screen or by talking to an associate. Self-identifying should be done as openly as possible, with a clear tangible benefit to the customer in return.

3. Use an omnichannel decisioning engine to deliver experiences and measure performance:

To accurately and quickly identify the next best action to take with each customer, companies need a decisioning engine using artificial intelligence or machine learning. Over time, as the decisioning engine ingests and adapts to more data on customer behaviour and sales metrics, such as store offers, inventory, and web publishing, for example, its business logic improves, and the engine becomes more successful in providing what customers want.

4. Implement agile operating practices:

Moving to personalised marketing requires more than better tech; it calls for a fundamentally new way of working.

Agile marketing teams, or pods, bring together different functions to work collaboratively to achieve omnichannel personalisation goals. They generally include data scientists to measure performance, marketing teams to build test hypotheses, marketing-technology experts to help execute, team members who represent the offline channels, on-site operations managers who take the lead on training frontline personnel, and hardware, and finally software technologists who address technology solutions. The best agile teams focus on specific consumer segments or journeys (new shopper, shopper returning a product), iterating with customers on new services, offers, and experiences in a process of rapid learning and adapting.

5. Activate omnichannel personalisation in the field

Bringing all these steps together to capture the full value of omnichannel personalisation requires an aligned and trained sales force. In-person teams can make (or break) the experience, so it’s critical that frontline personnel actively support personalisation efforts, understand their value, and learn to use digital to deliver the complete omnichannel experience.

Leap into the next big marketing opportunity

Omnichannel personalisation is challenging, but it need not be overwhelming. Instead of waiting to develop a complete system, companies should start small, with the highest-value use cases and existing touchpoints, to prove its value. That’s a proven model for success and one that companies will need to develop as the lines between the digital and physical worlds continue to blend.

The author would like to thank Gal Gitter, Meg Raymond and Kelsey Robinson from McKinsey & Company for their contributions to this article