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Why retailers should elevate personalization

October 18, 2020

Personalization is here to stay. Consumers’ expectations are evolving, with a study by Evergage revealing that 92% of marketers agreed that consumers expect a personal experience. However, a survey by Segment shows that brands, especially larger retailers, are struggling to meet consumers’ expectations of personalized experiences. As consumer needs and preferences evolve, brands too must constantly evolve to elevate and cater to its customer. It is crucial for companies to recognize the value of personalized consumer experiences in today’s world, with a report by Econsultancy showing that 80% of businesses saw an improvement after implementing personalization. On the other hand, companies failing to advance in this aspect will likely result in a loss in customer loyalty.

In today’s market, it is evident that companies have to further step up personalization strategies to build stronger customer relationships. The E-commerce industry is already making headways in bringing this customer experience to another level. In the early stages of utilizing data, the focus was on categorizing their consumers through segmentation – grouping individuals into clusters representing a mix of metrics ranging from pre-determined interests to demographics. Today, many E-commerce platforms engage in hyper-personalization, which identifies consumers at the individual level in real-time, leveraging big data and artificial intelligence. This allows for the content delivered to the individual to be more relevant, thus yielding a higher conversion rate. One example of this is Amazon. The platform creates a customized homepage for each of its consumers based on their individual shopping habits – anticipating the needs and preferences of the individual. The result of Amazon’s investment in hyper-personalization is reflected in the conversion rate of its on-site recommendations being 60% higher than other E-commerce brands.

While many brands use personalization in their online engagement with consumers, very few extend this to create an omnichannel experience. A study by Harvard Business Review revealed that 73% of shoppers used multiple channels for their shopping. Personalization through physical interactions is a new area for businesses to advance customer relationships from different touchpoints. An example of this personalized omnichannel experience is NomadX, a multi-label retail store in Singapore. Their interactive gamified onboarding process incorporates facial recognition technology and data collection which then provides consumers with recommended shopping routes based on their preferences. It also provides a convenient and seamless process for consumers to have interactions recorded and be rewarded with individualized deals. This will hopefully be the future direction for more retailers, to have personalization strategies across multiple sales channels to create a more targeted end-to-end consumer experience.

While seamless data collection provides access to an unprecedented amount of data and numerous opportunities for businesses, it is important for this to be done transparently. There is also a need to act on the insights gained in a non-intrusive manner. Research by Salesforce showed that 57% of consumers are apprehensive about how companies are using their information. An instance that showed one pitfall of being too invasive to achieve data-driven outcomes would be Target Corporation’s predictive analytics algorithm. This gained heavy media coverage when it figured out a teen’s pregnancy before her family did. While such predictive algorithms made way for increased relevance in promotions for consumers, many saw this as an invasion of their privacy. This highlights the importance of the subtlety and awareness required from companies when acting on the insights gained from their customers’ data. In this example, what Target eventually did was to mix in random and unrelated coupons together with pregnancy-related ones to make the suggested coupons seem random.

Consumers’ expectations are always changing, and businesses need to keep advancing in order to stay relevant. At the end of the day, companies need to embrace the future of providing seamless and personalized consumer experiences but are balanced in their attempt to do so.


Janice Lim

Senior Analyst – Graduate Program

Capgemini Singapore