Retail CX: Is there a personalisation ceiling?

Retail CX: Is there a personalisation ceiling?

26th November 2021 · Arvato · Blog, News

Authored by David Morton, Sales & Solutions Director at ArvatoConnect 

Personalisation has become a key battleground for retail customer experience.  

Simple tailoring of products or services is no longer enough. Customers now expect ‘hyper-personalisation’ from the companies they shop with – that brands can meet their specific needs, on every channel that they use, and crucially adapt to changes in their preferences or behaviour in real-time.

The scope to deliver this is seemingly endless. Is there a limit to what retailers can – and should do – when it comes to personalisation efforts? And what technologies will drive brands towards increasingly bespoke customer service?

The road ahead

The success of personalisation is measured by its ability to match a customer’s specific wants and desires.

Done well, it gives a customer a smoother, faster, more convenient and more satisfactory shopping experience. And, for retailers, it can drive retention, acquisition and revenue – research from Google found that people are 40% more likely to spend more than planned when they identify the shopping experience as highly personalised.

New opportunities for personalisation are emerging as new channels and trends come to the fore, supported by the wealth of information that can be gathered from an increasingly digitalised retail ecosystem.

For example, the rise of subscription models, which are often set-up online, may encourage individuals to share more explicit information on their likes and dislikes than they otherwise would in an interaction with their brand – providing huge amounts of data that can in turn by used to better personalise future engagements.

Similarly, the growth in virtual ‘try-before-you-buy’ solutions – spurred by the e-commerce boom of the stay-at-home-economy – is giving businesses a trove of new information on everything from style preferences to biometric details like body type and height. Some brands have even started using GPS data from mobile devices to trigger personalised offers for customers when they are near a physical store.

Ultimately, the ‘ceiling’ for personalisation is only really set by customers’ preferences themselves.

However, for almost every business, they will have finite resources – whether time, money, or staff – to dedicate to putting personalisation into practice and only so much information to work with.

This creates a very real limit to overcome.

And the solution lies in finding the best way to leverage the resources they have to deliver the optimal outcome for their customers.

Insight into action

As we highlighted in our blog on how fashion retailers can cut abandonment rates, brands don’t need to know every single detail about a customer to deliver effective hyper-personalisation.

Prioritising information that makes a positive impact on sales, retention or acquisition is essential. Finding ways to then leverage this data in the most efficient and effective way will be imperative, and here technology will be key.

For example, we see huge potential for businesses to use intelligent automation to gather information from every possible customer touchpoint and then clean and normalise so it can then be easily analysed for actionable insights. 

A tool like this can be powerfully combined with AI-driven technologies such as predictive behavioural omni-channel routing, predictive engagement and customer journey analytics to generate ‘next-best actions’ and ensure customers are provided the right support at the right time by the right resource, whether human or digital.

Next best actions are bespoke recommendations on what a customer might need, based on an understanding of them and their behaviour.

They can be used on a proactive basis – for example to creating one-time offers for a product that data suggests a customer might want based on historic purchase data – or work on a reactive basis, for example supporting agents with effectively finding appropriate solutions to address complaints or customer dissatisfaction.

Looking ahead

An ‘in the round’ assessment of a retailer’s existing CX capabilities and systems, its CX objectives – be it sales, retention or acquisition – and how personalised their services already are, will help them identify what they can do to help bridge the gap between the ‘perfect’ and the achievable. For brands looking to maximise the benefits personalisation can bring them – now and in the future – this is the essential first step.  

Arvato has extensive experience of helping retailers introduce innovative technology solutions that deliver better outcomes by improving the customer journey, creating a more bespoke service. 

Find out more about how we work with our clients to help them deliver more value for their customers – CRMSE@arvatoconnect.co.uk

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