Our website uses cookies

Cookies enable us to provide the best experience possible and help us understand how visitors use our website. By browsing Essential Retail Magazine, you agree to our use of cookies.

Okay, I understand Learn more

Comment: Getting the personalisation balance right

Personalisation comes in many forms and ranges from product-based recommendations such as "people who bought this, also bought…." through to customer account-based systems.

Increasingly, retailers are looking to supplement loyalty and promotional campaigns with a closer relationship with their customers, as a mechanism for reducing customer retention costs, improve loyalty and seek a competitive advantage. Personalisation creates new opportunities for conversations with customers through the website, email marketing, direct mailing and incentives to visit other channels. The aim of this attention is to reduce the chances of the customer trading with a competitor by staying front-of-mind when the customer starts a purchasing decision.

Customers for their part are finding it increasingly difficult to find their way through the myriad of purchasing options and are looking for trusted partners to help them. Search certainly has a role but increasingly social networks are having an input. In the offline world this is still the close circle of friends but online the role of influencers has increased the range of insight that a customer has about making a purchase.

Certain fashion brands have made very strong progress in this area but this is not personalisation. Where the brands themselves have a role is to become one of a limited number of trusted reference points that customers will visit and trust, either physically or digitally during the purchasing journey.

Personalisation, as a tactical project, is about providing a customer with the feeling that the brand knows about them, understands their requirements and can provide insight based on this knowledge. Everyone likes the feeling of being known when going in to a favourite restaurant or shop. The aim is to recreate this in all channels and in such a way that is scalable, possibly including international as well as domestic customers, and manageable.

At one end of the personalisation scale is product recommendation. Whilst not technically personalisation, it does provide the user with easy access to alternatives whilst allowing the business to raise the profile of product that needs to be moved quickly, perhaps to maintain margin or free up Capex. The key to recommendations is ensuring that the business can capture all the product attributes and use these in a manner which allows for them to be compared and presented to the customer whilst also allowing merchandisers to highlight key products, trends or other business priorities.

Loyalty programmes have long been used as a targeted method of communication and promotion awareness. Incorporating the ability for these programmes to be used across channels further increases their value to the brand and customer.

Broadband, 3G and now 4G have all added further potential to the digital experience that a customer has with a brand. Rich media, such as video and pan/tilt/zoom imagery, increase user engagement whilst data processing tools such as behavioural retargeting, recommendation engines and web analytics enables businesses to far better understand the users' journey.

Full website personalisation requires at a minimum a user account through which all of the customer's purchase history is maintained whilst other options include user management of lists, email subscriptions, links to loyalty programmes, customer forums and access to value-add services. These services require considerable technical capacity and customer appetite will vary from business to business. Certain segments will have greater levels of expectation whilst others will be much more 'light-touch'. The ability for a brand to effectively serve their customers with any of the personalisation techniques mentioned later in this report will very much depend on the technical capabilities and capacities of the business.

Business must have access to the resource, either internally or externally, to be able to understand and act on the data that is being produced. This will include constantly testing page changes, product relationships and many other variables in order to maximise conversion rates. Conversion rates might not be based on product sold but email subscriptions, account set-ups and a number of other commercial and marketing KPIs.

With this wide variety of data being produced and potentially a single customer view, the business needs to be able to process and understand the data in a holistic way.

Multiple surveys have shown that customers welcome personalisation in its various forms but they also show that there is a line that must not be crossed; the point at which the user is spooked by the amount a brand knows about them. It is generally accepted by users that a number of website services are available free-of-charge because they pay in another way i.e. by providing some personal information.

However, the relationship with commercial organisations is more complex. By making money from selling products and services, the customer expects access to the site being provided to enable commerce to take place. They will also understand that access to certain deals and promotions will be recognition of loyalty or other 'reward' mechanism. What spooks them is when they encounter messaging from your brand in an unexpected channel which intimates that the brand knows more about them than what they have freely given.

Done in the right way, customers will welcome any move to make purchasing from a brand easier and more personal. Taking them on the journey with the brand has the potential to reap the rewards just as doing it incorrectly has the capacity to cause immense brand damage.

In a busy world, a helping and welcoming hand is always valued.

This article is an extract from the IMRG report Personalisation: creating the 1-2-1 relationship.

Please click below for more information and to download the report:

IMRG report on personalisation

What’s Hot on Essential Retail?