As e-commerce continues to drive new revenue opportunities around the globe, customers are gaining more control of their shopping experience.
As e-commerce continues to drive new revenue opportunities around the globe, customers are gaining more control of their shopping experience. Unlike traditional shoppers who were limited to buying goods and services from physical stores, today’s consumers demand more convenience and less friction across their “phy-gital” (physical +digital) journeys from the brands they shop with. They want to use their favorite mobile devices to shop from anywhere at any time. And they want companies to understand their needs and suggest personalized offers based on their shopping preferences.
It’s a well-known business axiom that repeat customers drive current profitability while new customers drive current growth and future profitability. Yet, acquiring and retaining customers is harder than ever before. That’s because consumers are expecting personalization―experiences tailored to their needs and preferences based on their implicit behavior and explicit permission―across all interactions with sellers. Not delivering on this appears as a failure in the eyes of the consumer. The impact can be huge: for every customer experience failure, brands lose an average of 65% of that customer’s wallet share during the following year1.
In the past, consumers have been invited into stores, websites and mobile apps controlled by companies. But over the next few years, consumers will push sellers beyond these boundaries―from social media “buy” buttons to over-the-top messaging services with integrated payments such as WeChat to concierge services and full-featured mobile wallets, these will all become selling channels.
In return, consumers are willing to provide rich digital body language―online and offline behavior that signals their intention and preferences. However, this digital body language is all but lost on sellers, especially in-store. That’s because until now personalization has largely been the domain of online businesses or the e-commerce teams of brick and mortar sellers.
To stay relevant, sellers need to embed themselves in the ongoing phy-gital lives of consumers and earn the right to be part of a continuous stream of engagement. But, they can’t do it by following traditional means of marketing, communications and customer service. Personalization is their way in.
Few tenets on the basis of which new age digitization modalities rest are:
- Companies are finally starting to understand that their online presence is about serving customers as much as it is about selling to customers.
- Personalization is driving revenue growth for companies around the world, but they don’t invest in it nearly as much as other features that have an unknown impact on revenue.
- Personalization is making customers spend more, but companies don’t yet value personalization as an important factor in improving the online experience.
- There is huge growth potential for companies in mobile apps.
- Online customers report that shopping cart cancellations are largely due to unexpected surprises at checkout.
- Many online consumers crave better search and compare and aggregate functions, but many companies are investing in other features.
- Customers highly value online ratings and reviews (positive and negative) from other customers and seek them out before making a purchase. While word of mouth (83% positive, 77% negative) is still the most common method of sharing, digital platforms are catching up.
- Customers are likely to post positive reviews after a positive shopping experience, but are also likely to post negative reviews about poor product quality or service.
- Organizations have a huge opportunity to redirect digital marketing campaign spends to improve return on marketing investment (ROMI).
Winning the global consumer in the age of personalization is critical for gaining an advantage in an increasingly competitive environment. Companies need to think about how to deliver personalization across the purchasing journey. They should work on creating unique customer personas by employing the huge number of data streams they have access to. And they should apply analytical models to finely segment customers.
In addition, companies should use this segmentation knowledge to deploy an activation layer to engage customers with the right information and offers. Finally, organizations should do all of this beneath a code of honor―maintaining the customer’s trust about using data to personalize services and offers. With the right framework for omnichannel personalization, companies can shape innovative business models and develop sense-and-respond systems to deliver compelling experiences that meet customer expectations and drive growth.
Driven by data from multiple sources fed into smart algorithms, personalization allows organizations to target the right people, at the right time, in the right place, on the right device, with the right content, creating seamless commerce and a community of advocates. There is no shortage of marketing, analytics and personalization solutions. But, without a standard framework that can help drive a personalized customer experience across channels, organizations are forced to use a patchwork of disparate systems that limit agility and increase costs. Successful personalization will only work if companies have the right digital underpinnings at the broadest and deepest levels.