Retailers Say Hello to Next-Generation Personalization

Aug 19, 2014 9:34 AM  By

Personalization in retail has become so established that many retailers have embraced approaches that are good enough. I see standard features like “you may also like” recommendations as “Gen 1” personalization using web cookies to establish product-to-product connections.

But the dramatic rise of mobile and the merging of the physical and digital worlds are impacting the rise in omnichannel retail and the importance of personalization. Fears of showrooming have quickly switched to the potential for webrooming, and omnichannel retailers are seeing how physical stores can actually help them better understand customers. Meanwhile, digital retailers are jumping into the physical world so they are not left behind.

At the center of omnichannel retailing is next-generation personalization. It helps retailers understand the customer, optimize any element of a message in real time – content, creative, offers – and impact messages at any touchpoint in a coordinated way. In today’s environment, where customers demand seamless, omnichannel communications and increasingly shop across multiple channels, Gen 1 simply isn’t good enough anymore.

Instead, it’s time for retailers to adopt personalization strategies that put customers’ unique preferences at the center of every marketing campaign. Don’t know where to start? Here are my top tips:

Understand Your Existing Data

Next-generation personalization empowers retailers to optimize messages to individual customers across any channel. This means not just dropping web cookies but leveraging the wealth of consumer interaction data at your disposal.

This data ranges from customer-level email logs to website behavior, product reviews, call center records, social media interactions and transaction details. Any data that can help you create a full view of your customers is worth collecting and analyzing. The value is not in any single piece of data but in putting the pieces together to develop a more complete understanding of every customer.

Stay Focused on Customer Demands

There is a huge gap between customer expectations and what retailers are actually delivering. Think about it: 83% percent of shoppers want personalized cross-channel experiences, but only 11% of retailers feel they’re able to deliver that today. That’s clear evidence that Gen 1 personalization isn’t good enough. If a customer expresses interest in a black cocktail dress after opening a marketing email, subsequent interactions across online, mobile and in store must reflect that interest to create a valuable shopping experience and conversion.

But next-generation personalization can’t stop there. After the customer purchases that black cocktail dress, she’s going to want to see similar and complementary merchandise in your brand’s ongoing communications. That could include anything from coordinating accessories, to matching shoes, to merchandise from the same designer or similar price points. You also better make sure if she finds something she likes, she can not only find your closest brick-and-mortar location but can see whether her size is in stock and ready for pick up – all with very little effort.

This type of relevant, individualized communication coordinated across every channel helps create deeper, long-term customer relationships. This will be the key element that decides which retailers survive the next five years.

Make Action More Important Than Analysis

So you’ve gotten a grasp on your company data and understand the steps necessary to deliver next-generation personalization and meet customer demands, but how do you make it happen? All this customized messaging can appear incredibly labor intensive, requiring advanced predictive analytics and data science skills, in addition to all the demands on marketing and communications.

The key is having technology to execute it; this is not a manual process. Most retailers find success either by hiring in-house data scientists and pairing them with an agile, modern technical team, or by working with a vendor that specializes in this. It is a burgeoning, rapidly evolving area, so look for a vendor with experience in retail, cutting-edge science and technology that can adapt with you.

More than ever, customers expect to engage with a retailer and its products on any channel, while continuing to receive personalized communications at every touchpoint. Next-generation personalization allows retailers to get the jump on competitors, and lets customers view them not as a hawker of merchandise, but as a store that delivers true value and gives them what they want and need.


Graeme Grant is the President and COO of CQuotient. He is a start-up and high-tech veteran with particular expertise in the retail sector, and has held previous positions at Allurent, ProfitLogic, Oracle Retail and Borders.