In the Age of Amazon, Why Isn’t Every Retail Customer Experience Personalized?

Around this time last year, marketers across industries were coming off a summer of watching their kids catch virtual pocket monsters and scrambling nervously back to the office to build an “AR strategy.” To this point, augmented reality has joined beacons and several other technologies in retail as a purple squirrel eCommerce marketers chase to no avail.

While many trends come and go, personalization continues to be a core strategic priority for retailers of all sizes. Gartner has cited personalization as the #1 strategic investment are for brands in 2017. McKinsey and the Wall Street Journal have referred to personalization as the “holy grail of marketing.” 

According to Boston Consulting Group, personalization will push a revenue shift of $800 billion to the 15% of companies that get it right in the next five years. In a nutshell, “personalization leaders stand to capture a disproportionate share of category profits in the new age of individualized brands while slow movers will lose customers, share, and profits.”

With the seismic tides behind personalization, why aren’t all eCommerce companies serving individualized experiences? From our experience talking to hundreds of customers, the main barriers to implementing personalization can be summarized in three basic objections.

  1. We’re unaware of revenue impact so we can’t make the case to senior leadership that personalization is a high priority.
  2. We’re not sure of what is possible so we never defined what an ideal personalized user journey would look like.
  3. We don’t know who in our company should manage personalization or how it would fit into our workflow.

To help you make the case for personalization in your organization, let’s break down each hesitation in more detail.

We’re unaware of revenue impact

Marketing practitioners at eCommerce brands are constantly searching for methods to help them achieve greater ROI on their marketing investments. And in light of its promise to increase top-line revenue and provide high marketing ROI, personalization is still thought of as a mere tactic in assisting the delivery of superior customer experiences. 

Because eCommerce ROI is a balancing act influenced by acquisition costs, conversion rates, average order values, and a litany of secondary metrics such as margin, customer lifetime value, and return rate, it can be hard to understand where personalization fits in.

And proving the ROI of personalization is never about increasing a single metric. Since personalization impacts several KPIs that contribute to revenue, small increases in each piece of the revenue puzzle can lead to big outcomes.

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But things really get exciting when applying gains from personalization back into the top of the purchase funnel. For example, with additional revenue from personalization, you can invest more money back into your traffic acquisition campaigns with greatly extrapolated returns. Uplifts of 10-15% across different stages of the funnel can add up to almost 40% revenue growth.

By investing in personalization, eCommerce brands stand to make the most of their existing website traffic and have more money to invest in acquisition, improving results at all stages of the purchase funnel.

Learn how five eCommerce companies saw the likes of a 35X return on investment, 30% increase in revenue per user and $15M in gross uplift via our eBook on the ROI of Personalization.

We never defined an ideal personalized user journey

Modern consumers share many interactions with a brand on their path to conversion. Often on several devices and across touchpoints, marketers are now tasked with having to pick up the conversation right where it left off. These days, channels are irrelevant — there is only one single customer journey.

While this may be true, each user journey differs per person and encompasses a variety of experiences unique to the customer and brand. The real trick to creating a personalized, omnichannel retailing experience is by 1) creating a complete 360 degree/single view of the customer and 2) mapping experiences based on the real-time signals a customer makes in the decision-making process.

Here’s just one example of what a user journey could look like for an anonymous user visiting your eCommerce site:

Unknown User - Customer Journey

And without a cohesive dataset based on all available customer information, an “ideal” personalized journey for Carmen is simply a shot in the dark. Powerful, contextual experiences are built off the back of insights gleaned from across your web, mobile apps, email, CRM, 3rd party data sources, beacons, and customer support touch-points.
Carmen visits your site as a new, unknown user. You already know that Carmen clicked on a search ad for a sale on blue jeans. And once she lands, using third-party data, you can infer Carmen is female, 25-34, lives in New York, and makes 60K. She browses the site a bit and then leaves.

So, even on this first visit, she is not truly unknown.

Though this level of orchestration between channels can only be achieved by employing the right technology, often leaving those without it at risk of producing inconsistent, irrelevant, and less impactful experiences along the customer journey.

We don’t know who should manage personalization

Delivering personalized experiences is a huge challenge for brands who don’t know where to start or who in the organization should own it. With struggles around choosing suitable champions to take ownership as well as coordinating responsibilities associated, the synchronization necessary between various stakeholders to drive efforts towards success quickly diminishes.

The truth is, great customer experiences and sustainable growth from personalization is the result of a coordinated team effort and involves many stakeholders for different departments, including product managers, performance marketers, eCommerce managers, and web analysts.

And, as personalization and optimization become increasingly crucial to the functions of the digital marketing and customer experience roles, organizations must focus on transforming traditional, rigid working silos into structured teams that promote effective facilitation between the different stakeholders and marketing departments.

Ideally, a world-class personalization team will have someone on the team who is able to work with internal teams, translate their goals and customer profiles, and create and implement an integrated personalization program.

Successful personalization should be baked into the DNA of all key departments and stakeholders.

For more on the roles and structure of an agile personalization team, read this article. 

So, while 100% of user experiences may not be personalized today, those who get it right will receive the lion’s share of the market as these customized experiences become table stakes for consumers with increasingly high demands.

Note: This article was co-authored with Mike Mallazzo

In the Age of Amazon, Why Isn’t Every Retail Customer Experience Personalized?
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