In 2011, we saw a real shift across the industry in perceptions surrounding personalization. What was considered a “nice to have” just a few years back is now a requirement for any successful online strategy. Yet while half of retailers think they’ve got personalization mastered, most of them are in fact approaching it in fundamentally the wrong way. Retailers still rely too heavily on past purchases and customer profile data, giving an online experience based on what the shopper has done in the past – not what they are doing in the moment. In the coming year, the savviest retailers will be those that prioritize personalization based on in-the-moment intent. Here’s how we see personalization maturing in the New Year.
Personalizing for right here, right now: Shoppers show up at a website intending to purchase something, but their intent isn’t necessarily reflected in their past buying habits or online profile. Retailers will begin to shift away from profile-based personalization by observing micro-behaviors that infer shoppers’ current intent, allowing them to customize the shopping experience based on visitors’ real-time actions and interests. A great example is outdoor gear retailer Altrec.com that adopted an intent-based personalization approach for its site. This was especially important since its customers’ shopping habits often didn’t necessarily match up with past experience – for instance, someone who buys bathing suits in June will come back in November to buy ski parkas. Altrec.com has been able to boost its conversion rate by 450 percent using an intent-based personalization system.
Multi-channel personalization: Even just a few years ago, shoppers interacted with retailers through just a couple of touchpoints – think websites and direct mail. Today, the number of touchpoints has exploded, encompassing chat, mobile apps, tablets, social networks, and so on. Yet most retailers are unsure of how to synchronize personalization across these different channels. Consider a customer that receives a message about Xbox games on her iPhone but refrigerators via email, for example. Successful personalization strategies in 2012 will maximize retailers’ impact by providing consistent recommendations across all channels.
Harnessing mobile, social and local: There is rich data available to retailers about customers who use mobile and social channels– but there is still work to be done in terms of harnessing the power of this data. With more and more people shopping online while logged into Facebook or using location-aware applications, retailers will need to determine ways to integrate this data with information about in-the-moment shopper intent. In 2012, expect to see more experimentation and sophisticated thinking on ways retailers can leverage these channels to make online experiences more relevant to shoppers.
The past year put a harsh spotlight on the challenges retailers face in creating truly personal and relevant shopping experiences for their customers. While 2011 didn’t show a ton of forward progress in the way retailers are leveraging personalization, there is no doubt we will be doing a better job of delighting customers throughout the New Year.