Blog: The Power of Personalization in Retail

Most retailers are looking for ways to improve the consumer experience with their brand. In the annual BRP benchmark survey carried out to better understand retailers’ customer experience priorities, 55% of the interviewed retailers indicated that optimizing the customer experience is a top priority, with increasing customer loyalty a close second (50%) and improving the mobile shopping experience coming in third, being ranked by 45% of the retailers as one of their top priorities.

However, only 24% of respondents indicated that providing personalized promotions, recommendations and/or offerings is a top priority.

Source: BRP 2017 Customer Experience/Unified Commerce Survey

Strange as it may sound, this discrepancy is understandable if you think about it. Before you can start working on providing personalized promotions, you need to have the foundation in place. An optimized, seamless customer experience across all sales channels, a well thought-through loyalty program and the ability to get in touch with customers via their most cherished and most personal device –their smartphone – all need to come first.

Personalization is a must-have

Personalization will gain importance quickly, as more and more retailers make progress on laying out the foundations for their customer experience and loyalty programs. Personalization is an absolute must-have for retailers, as it helps set them apart from the competition. Consumers, especially the millennials among them, no longer accept a “one-size-fits-all” approach. It needs to be tailor-made, personalized to the max.

Personalization is also key for running successful loyalty campaigns in retail. Moreover, it is an essential ingredient for enhancing the customer experience, because nothing feels (nor sells) better than bringing implicit needs and wants to the table – and (of course) exactly the ones the customer was just thinking about. Personalization is about being “in the moment” with each individual customer, and anticipating his or her needs as they are evolving. One could say that in the end, the consumer is the only remaining channel that retailers need to care about.

Technology enables personalization

Being able to personalize an experience requires in-depth understanding of an individual consumer. His whereabouts, his preferences, his desires and needs, his household and his financial situation, and his purchasing behavior, for example. This calls for smart data collection and smart data analysis.

According to a study carried out by Zebra Technologies, 70% of retailers are planning to invest in Internet of Things (IoT) technologies by 2021. According to this study, retailers expect that in-store technologies like sensors for tracking footpath, beacons for location-based marketing, electronic shelf labeling (ESL) and smart sensors for inventory management will be “giving a digital voice to people, processes and things to improve the consumer experience, enhance supply chain visibility and expand revenue opportunities.”

Part of the digital store transformation process, this “digital voice” of the consumer can be stored, analyzed and used to further improve the in-store experiences.

Source: Zebra 2017 Retail Vision Study

Tapping into smart data at home

At home, technological advancements also support the collection of smart data. Just think about the new “domotica” or home automation applications that are rapidly gaining ground. For example, the smart kitchen tool Hiku lets consumers simply build their shopping lists at home. Amazon Dash enables you to instantly order laundry detergent or many other items you’re running out of. Smart refrigerators signal when you need more milk. Alexa, together with Amazon Echo, allows you to order just about any item online without even touching your smartphone or notebook. This type of domotica is not only extremely convenient for its users, it also provides a wealth of personal information that retailers can leverage to personalize their engagements with individual consumers and with households.

How to get personal?

Jeffrey Neville, vice president at BRP, once said: “Personalization may be the most powerful way for retailers to differentiate their brand and enhance the customer experience – the challenge is to identify the best method to customize the experience for each customer.”

Here at Diebold Nixdorf, we are looking forward to helping you overcome these challenges, by jointly defining and implementing the personalization and customer engagement strategies that best fit your business and brand. Let’s talk about how to position your retail business for the future of digital technology.