How e-retailers plan to improve personalization in 2016
January 15, 2016 04:51 PM
For the past decade, retailers have resolved to make THIS the year that they deliver a premium, personalized 1:1 experience whether on-site, in-store, mobile or at the call center. And each consecutive year has brought the industry closer and closer to the grail (ahem, goal). Exiting 2015, most retail brands were using some combination of behavioral data, preferences and shopper profiles to individualize the entire shopping experience across most or all channels.
However, personalization will make some quantum leaps in 2016. The tools and techniques have evolved rapidly, and retailers are ready to implement personalization strategies that would have seemed straight out of a sci-fi movie 15 years ago.
To illustrate what personalization may look like in 2016, my team here at RichRelevance analyzed request for proposals (RFPs) from retailers that represent over $75 billion in aggregated revenue. Half of these companies are Fortune 500 retailers and 70 percent rank among the top 100 in Internet Retailer’s list of the ecommerce retailers in North America.
These are the retailers who are pioneering the capabilities that will enter the mainstream this year. And, based on this sample of RFPs, here are the personalization trends and technologies poised to take center stage as data, tech and personalization will enable new services in 2016.
1. Complete Personalization: Data Spans Customer, Context & Inventory
Retailers are bringing in more data feeds than ever before to ensure they show shoppers the most relevant products and content based on the entirety of who they are and their experience with the brand. This means connecting offline purchases with online browsing and purchase behavior. So if a shopper buys a cashmere sweater in the store, their mobile device will immediately show options for completing the look based on that sweater and other items they’ve browsed online in the last few days .
This expanded data set – mobile, online, offline, geolocation, a retailer’s own inventory – will also drive better content presentation, search results and category pages. The ultimate result will be improved customer engagement and sales in the months to come. Luxury retail innovator Barneys New York has shown that customers who interact with personalized content convert at double the rate of Barneys’ site average. In addition, online shoppers who type products into the site search box convert 10 times more than other visitors.
2. Smarter Associates: Blending Artificial and Human Intelligence
Most retailers fail to connect actions in-store, online and over the phone into a single customer profile. Consequently, shoppers struggle to understand why retailers treat them like different people in each channel. In 2016, retailers will eliminate this inconsistency by introducing “clienteling apps” for sales associates.
Available on smartphone and tablet, these new apps arm sales associates with personalized recommendations based on a complete view of each customer’s past purchases and browsing behavior. These recommendations will be delivered in a feed that associates can combine with their own expertise to offer the right items to the right people.
Clienteling apps will offer an “endless aisle,” meaning associates will be able see inventory across the store floor and all warehouses. With one tap, associates will be able to order or ship items that are out of stock and thereby save sales they would otherwise lose.
The rewards are rapid – and real. Upscale UK-based retailer, Monsoon Accessorize, found that its personalized clienteling app now accounts for 7% of in-store revenues. A full 60% of the customers using the in-store tablet devices opt for click-and-collect transactions, and approximately 30% of those customers make another transaction when they come in to pick up their order.
Contact centers will take advantage of similar technology. Rather than ask 20 questions to figure who a shopper is and what they might want, service representatives will use clienteling apps to understand their preferences. Need help ordering wine? The representatives at a multichannel wine retailer will know preferred regions, grapes and prices based on past ordering history.
3. Hipper Store: Intelligent Fitting Rooms and RFID Clothing
For good reasons, the fitting room is the one place where retailers struggle to provide additional service. However, where sales associates can’t go, smart technologies can. In 2016, retailers will implement intelligent fitting rooms that can identify clothing by radio frequency identification (RFID) tags embedded in clothing.
Imagine a fitting room that has a mirror (or tablet) with display capabilities. The mirror displays a list of the clothing that the shopper brought in. The shopper can simply tap on the screen to add items to their “cart” for faster checkout later. This mirror recognizes the shopper via a beacon that communicates with a branded app installed on the customer’s smartphone.
Based on a shopper’s personal history and the items they are trying on today, the mirror personalizes recommendations that will help ‘complete the look.’ Perhaps the mirror says a pair of dark jeans and a brown leather belt would complement the sport coat and shirt they selected. It displays a selection of both products. The shopper taps their favorite jeans and belts, and a sales associate retrieves the correct sizes, which the system knows from past purchases.
This is not a sci-fi concept. The required technology already exists, and the RFPs from top retailers suggest that intelligent fitting rooms will become more common and sophisticated this year. Early adopters of this technology are seeing an increase of 60-80% in incremental sales through the dressing room.
Personalization Brings The Entire Customer Experience Together
At the end of the day, personalization in 2016 is about anticipating a shopper’s needs, and introducing services that previously didn’t exist in retail. Intelligent fitting rooms, new data strategies and clienteling apps all contribute to this mission. They fit into a grander personalization strategy that synthesizes data and information across mobile, in-store and desktop to create intelligent omnichannel shopping experiences.
As our analysis of RFPs indicate, top retailers are serious about eliminating data silos and introducing personalization into more interactions. The question to retailers who are NOT thinking about these and other approaches is how do they see their businesses in 12 months – as laggards or leaders?
RichRelevance provides personalization technology to 45 of the retailers in the Internet Retailer Top 1000, according to Top500Guide.com.