RETAIL: Achieving ‘Hyper-personalisation’ in Retail
Recent Western Cape Business News
It’s one of the great paradoxes of the digital era: as we discover the wonders of artificial intelligence, super-smart algorithms and chatbots, consumers are seeking greater warmth and personalisation in their interactions writes Alan Collins.
For retailers, the goal is to use technology to provide ‘hand-crafted’, individualised experiences, recalling a lost era where the neighbourhood grocer or baker greeted us with effortless personalisation, knowing everything about our preferences.
As many retailers aspire to these old-world ideals, the concept of ‘hyper-personalisation’ emerges: where we intimately understand customer needs and buying behaviour – and tailor products, services and communications at an individual level.
This grand vision involves Big Data engines crunching through reams of transaction data, online shopping activity and social media posts; dynamically changing prices and special offers; individualising loyalty programmes and personalising specials to customers’ smartphones as they enter a shopping district.
… And much more.
But the practical reality of achieving this is proving to be far more difficult than imagined. Across the world, very few retailers have these systems truly humming, properly transforming the retail experience. In SA, our retailers have to deal with a number of local market nuances that make the personalisation journey even trickier.
While tech companies and consultants often punt an all-in-one, ‘silver bullet’ solution, the only realistic way to hyper-personalisation involves a multi-faceted approach. It’s a hard slog, and it requires substantial changes to retailers’ existing operations, technology, and strategies.
With this in mind, here are 5 key areas to consider in your retail sector hyper-personalisation strategy:
1. Build sustainability
Within the Bi-modal ICT framework, your hyper-personalisation strategy fits within ‘Mode 2’, where the emphasis is on fluidity and agility, and where technology needs to consider an ever-changing and highly-uncertain future.
For retailers, the next big ‘personalisation’ opportunity may lie in geo-fencing, or digital wallets. Or, it may lie in beacons, wearable tech, or biometrics. We simply don’t know which of these nascent technologies may rapidly enter the mainstream in the coming few years. So, it’s essential for your digital platforms and architectures to cater for this volatile future.
2. Match specific personalisation strategies to your data
Think of hyper-personalisation as a broad theme encompassing various specific strategies (enhancing loyalty programmes, reducing marketing costs, understanding buyer preferences, and so on). Each of these many strategies may sound useful at a conceptual level, but you may not necessarily have all the data needed to satisfy each strategy.
It’s important to take a hard look at the data that you are tracking, and build out your initial hyper-personalisation strategies based on the data that you have available. As you grow your datasets, you can embark on new personalisation strategies.
3. Consider local nuances
As you select the tools and partners that will power your hyper-personalisation ambitions, it’s essential to consider local expertise and relevance. For example, when looking at enterprise Cloud systems, consider that Google’s ecosystem tends to mould itself to fit better in the South African context (than does Microsoft or Apple, for example). For tasks like speech-to-text, Google’s level of localisation could be an important differentiator.
SA retailers serve a vast and diverse array of customer segments, LSM groupings and demographics. Achieving hyper-personalisation in this climate requires the expertise of local technology partners that understand the unique nature of our local markets.
4. Fit within your omni-channel roadmap
Depending on the nature of your retail business and target market, you’ll likely be exploring the opportunities to more tightly connect your various touchpoints – from physical stores, to online, mobile, messaging, call centres, social media and more.
Your hyper-personalisation needs to fit harmoniously with your omni-channel roadmap, to ensure that you have the capabilities to execute on the personalisation vision. So, if your marketing team plans to deliver personalised vouchers to customers via a mobile app, you’ll need to ensure that the development of a mobile app is on the IT team’s agenda.
5. Get creative!
There are boundless opportunities to apply cutting-edge technology in your hyper-personalisation ambitions. We suggest making the most of the creative spirit in your teams, by arranging regular brainstorming sessions, hackathons, spinning up skunkworks operations, establishing incubators, or leveraging innovative technology partnerships.
Perhaps a breakthrough idea is a facial recognition tool that identifies high-profile or priority customers, and enables the store’s team to create differentiated levels of service, for example.
By appointing a Chief Digital Officer, with a broad mandate and a healthy budget to explore the various options available, retailers can position themselves to develop these new ideas.
With enough effort, and with the right partners helping to guide the roadmaps, it’s possible to create value-adding hyper-personalisation strategies – that enable exceptional customer experiences.
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