The need for hyper-personalised experiences
Today’s consumer is best summed up thus: “I want what I want when I want it.”
To meet the evolving demands of the consumer, retailers are stepping up their game in ways never imagined before. While the retail industry is undergoing a pivotal transformation, shifting towards digital and omnichannel operations, retailers are increasingly differentiating their offerings by delivering curated, hyper-personalised consumer experiences.
From personalised pricing, to location-based engagement such as geofencing (used by players like Amazon Go) and personalised ‘productisation’, hyper personalisation takes many forms, both in the physical and online worlds. More tech-savvy retailers are now taking the time to delve deeper into studying their consumers through human science and behavioural analysis to tailor their path to purchase in the form of hyper personalised products and in-store services.
Curating personalised experiences
Across Asia Pacific, retailers are starting to prioritise targeting, personalisation and consumer journey management as key focus areas in their business strategy, with close to a third of all retailers prioritising hyper personalisation behind social-media engagement and marketing. Consumers are also giving almost as much weight to a company’s personalisation capabilities as its reputation. Given this, in-store and online retailers are strategising and executing hyper personalisation through various modes that suit them.
While in physical stores, like in the case of Sephora, voice experience is driving hyper personalisation through a skincare advisor on Google Home, other apparel players such as Vans have taken a more tangible approach by unveiling a machine that lets consumers take any pattern/photo/design and apply it on a pair of shoes in less than 15 minutes. Many retailers have also adopted geofencing as an effective tool for hyper personalisation. According to research, 53 per cent of the shoppers who receive location-based alerts visit the retailers that send them, and 50 per cent of these customers, who did not originally intend to visit the store, were driven to make the visit because of geofencing.
E-commerce sites, on the other hand, make personalised recommendations using browsing history, and previous purchases made by consumers. Swarovski’s e-commerce page allows consumers to choose a look based on their specific tastes, after which style-finders help them pick the right products. E-commerce players such as Alibaba have also successfully driven 20-per-cent higher conversions in personalised homepages than in non–personalised ones.
While studies have shown that half of all consumers expect companies to anticipate their needs and make relevant suggestions even before they make contact, and one in five are ready to share data in return for a personalised experience or product, only 3 per cent of retailers are working on consumer experience models such as customisation or dynamic pricing that enable the execution of hyper-micro-personalisation. Investing in a collaborative approach will allow retailers to bridge this gap. By harnessing direct input of data throughout the retail process, they will be able to gain a deeper understanding of consumers’ unique preferences and decision-making habits.
Technology as the catalyst
While technology plays a key role in hyper personalisation, using it appropriately is what makes the difference between success and failure.
In order to show specific product recommendations, e-commerce players such as Amazon and Alibaba are using AI-driven recommendation tools. Other players such as Japanese beauty giant SK-II are featuring customised skin analysis using machine-learning technology and generating curated products for unique skin types. Singapore’s NomadX, a brick-and-mortar store housing products from a selection of e-commerce sites, features a smart retail infrastructure with in-built data analytics capabilities. This allows retailers to tailor unique ‘phygital’ shopping experiences based on shoppers’ preferences.
When applied well, new technologies can enable retailers to leverage the synergy between the digital and physical worlds, paving the way for enhanced ‘phygital’ experiences.
Store associates as facilitators
Becoming an insights-driven company goes beyond just making appropriate technology investments. It requires an enterprise-wide analytics strategy that equips employees with appropriate tools and training, infusing analytics into each decision-making process. Skillswise, employees need to be empowered with appropriate tools and training for the job. They need a firm grasp on maximising AI-driven insights to extract the greatest value for both consumers and the business.
New life for customer experience
While largely shaped by the trends of AI/ML and data analytics, the execution of hyper-personalised offerings goes beyond what we see today, such as providing personalised delivery by analysing consumers’ shopping preferences and perhaps designing product lines that can be customised by consumers, for consumers.
Even though technology creates the hyper-personalised solutions we see, it needs to be understood that capturing consumer data of the right quality is at the very core of hyper-personalisation, without which the relevance and impact of hyper personalisation will be lost.
With customers constantly shifting between online and physical stores, retailers have an amazing opportunity to make their purchase experience memorable when they step into the store. Success is within sight for retailers who know how to leverage their consumer data, and get hyper-personalised through technology enablement, drawing consumers to their brands time and again.
This feature originally appeared in the Inside Retail Hong Kong’s magazine edition, available by subscription in digital or print versions.