RETHINKING PERSONALIZATION FROM SEGMENTATION TO INDIVIDUALIZATION PART 2

It Turns Out the Joke Is on Us

One the of the great cosmic jokes we almost all struggle against as we get older is the belief that the following generation had an easier time of it than ours. While the reality is that each new generation has its own context that really can’t be compared to the one that came before or after, I’m starting to think that the current business climate might just be the exception.

Today’s businesses, especially those in the retail and brand space that have to contend with the likes of Amazon and Walmart, are in an incredibly difficult and unique position. Whether you sell your own brand or someone else’s, there’s often very little separating you from your competition. With all the things business could compete on in the past – price, products, or brand – basically off the table, the only thing really left to differentiate yourself is the customer experience.

One clear and obvious way to do that is through personalized shopping experiences. In my previous blog, I wrote about the outsized role segmentation currently plays in personalization and the structural and technological reasons that make it so difficult for business to shake loose from its grasp.

Commerce Is from Mars and Customer Experience, Venus

Today, marketplaces are king, which means every business is wanting to sell everything and extend its reach beyond its traditional vertical. This results in more products, more channels, more touchpoints, and ultimately more complexity.

While customers, on the other hand, want micro-curated, concierge-level service, where the experience is entirely focused on their individual, at-that-exact-moment-in-time-and-place context.

The resulting variability and need for specialization are almost too much for the human mind to handle, much less traditional marketing approaches that rely on manual segmentation and testing. Unless you have an army of marketers and merchandisers at your disposal – and then still – there’s no way in the world you can determine which offer or promotion and experience will be best for each shopper and context with any degree of certainty.

Segmentation has had a long and well-proven track record and still has a key place in your personalization strategy, but it alone cannot provide shoppers with the individual experiences they increasingly crave. This is something that Amazon “got” early and was able to act upon it, and now everyone else is just starting to catch up.

Understanding Shopper Behavior Is Everything

Online shoppers, as it turns out, are just as fickle and unpredictable as they are off of it. Offline, a shopper can go into a store thinking about brand A but walk out with a bag filled with brand B — or purchase way more, or less, than they intended. Back in the days of e-commerce 1.0, the options open to an online shopper were far more limited and the path they could take, were much more susceptible to the prescribed journeys planned out by marketers. But, now that the offline superstore-like experiences are being replicated online, it’s much harder – or really impossible — for digital marketers to keep their audience from straying off or abandoning the path.

Understanding and catering to the vagaries of human behavior and psychology that make up that last mile of the buyers’ journey, where the decision of if, what or how much to buy or move to another site or store altogether, is becoming the biggest puzzle businesses need to solve.

It’s the main thing Amazon got before anyone else. And so while they were investing in the technology and skilled personnel needed to understand and remove the friction from the purchase process, everyone else was conducting business as usual.  I think we all know what happened next.

So, what was Amazon’s secret and how do you go beyond them to understand and act on shopper intent in real time?

Well, we’ll get to that in a second. But first, let’s eliminate what it is not.

Wisdom of Crowds Is Not Personalization, But It’s a Good Start…

Let’s start by clearing up a major misconception. In the 10+ years we’ve been doing personalization, one of the biggest mistakes we see is the false equivalence that people make between Wisdom of Crowd (WoC) and individualization. Look, WoC is a great tool and absolutely should be one of the things in your arsenal, but if we’re being honest, it’s not technically personalization.

What it is, is a statistical technique for aggregating visitor behavior and drawing some correlations that can be helpful to shoppers visiting your site for the first time. It’s what you use when you don’t have any behavioral or historical data about the visitor.

It’s your opening salvo.

It allows you to say, for example: Hey Ms. Shopper. I see you’re looking at this skirt. Here are some other skirts and other things people viewed, clicked or bought who were also looking at that same skirt, or brand, or whatever.

What separates it from personalization is the fact that it doesn’t consider anything else about the shopper – their history, their affinities, or even why or for whom they’re shopping. And it makes a big assumption: That the collective behavior aggregated by WoC is actually relevant to the individual shopper on the other end of the recommendation or offer.

However, WoC is a great tool for tuning the search experience for unknown shoppers. Let’s say I’m looking for a new pair of shoes to wear to the office. I start with a search for “business shoes,” but what the engine doesn’t understand is that I spend my day at a standing desk and typically walk more than a mile a day between transportation, lunch, and, coffee breaks. The first WoC-aided query returns a decent enough selection with some comfortable options. I click one, but want to see more so refine my query, and, not surprisingly, the second search just totally misses the mark – and loses me in the process.

The same cycle is repeated both on and offline millions of times a day for thousands of retailers and brands. With each, you have very smart, creative, and experienced professionals—buyers, brand managers, stylists–merchandising the experience to promote specific products or brands or further a business objective. While the initial experience can be curated for the collective whole what happens next needs to be tailored to the individual, whether it’s via kiosking or mobile apps in-store or personalized content and/or offers online.

WoC can only take you so far, but once you signal your intent by clicking on a product or going to a particular page, the retailer or brand needs to begin to understand who you are, why you are shopping, and respond with progressively personalized experiences.

This is where the real personalization journey starts and should get progressively deeper as you collect more information about each shopper and gain greater insight into who they are, why they shop, and how to inspire and delight them.

So, what are the keys to go from wisdom of crowd to personalization to individual, Hyper-Personalized experiences? Well, that’s the subject of the final blog in this series. In that, we’ll take a look at what it takes to put together a solution in the real world, including the skills, technology, and structure needed to understand the user at the individual level and deliver real-time personalized and shoppable experiences to differentiate yourself.

Next Up

So, what are the keys to go from wisdom of crowd to personalization to individual, Hyper-Personalized experiences? Well, that’s the subject of the final blog in this series. In that, we’ll take a look at what it takes to put together a solution in the real world, including the skills, technology, and structure needed to understand the user at the individual level and deliver real-time personalized and shoppable experiences to differentiate yourself.