Personalization at Scale for Retailers: Mind the Retail Personalization Gap

Personalization has been among retail’s top priority for years. And in many ways, it’s ahead of other industries in personalization. It has its success stories, the celebrated occasions where savvy retailers have created one-to-one experiences that live up to all the hype. The bespoke fashion retailer’s tailored recommendations. The outdoor gear provider that connects with customers through local weather conditions. The home furnisher that knows you’re into urban chic, not country farmhouse. The grocer aware of your preference for bold red wines and your soft spot for rocky road ice cream.

But there’s still a gap between what consumers expect and what most retailers can deliver. Personalization matters to consumers, and they’re picky about it. According to the 2018 Consumer Expectations Survey, nearly 80 percent of U.S. consumers think businesses should provide personal service, whether in store or online. A similar percentage, reported by the OneSpot/Marketing Insider Group, have said personally relevant content from brands increases their purchase intent. Compare that to the mere 6 percent of marketers who rated their personalization strategy implementations as advanced, according to Monetate.

36% of online adult shoppers in the U.S. believe retailers should do more to offer more personalized experiences.

Source: Forrester

One big hurdle for retailers is delivering personalization at scale. It’s a difficult and complex challenge, ever-changing and full of nuances, requiring more than a few rules and humans working their keyboards. We’re publishing this five-part series to help cut through the confusion — and move toward the personalization your customers want, at the scale your business requires. During this series, we’ll cover everything from practical steps for automation to AI breakthroughs, from massive data lakes to finely tuned creative experiences.

The challenge of scale.

Let’s start by looking at reasons why delivering at scale is a hurdle for personalization in retail. Some are technological, others organizational. Certain things inherent to retail increase the difficulty, as do consumers’ evolving behaviors and rising expectations. These challenges shouldn’t deter retailers, since the measurable rewards of personalization at scale can be great. But they do have to be addressed.

So many touchpoints and moving pieces.
To personalize at scale, retailers have to take into account all the ways customers interact with their brand — as opportunities for personalization and as sources for data. Easier said than done. Every industry faces an explosion in customer touchpoints, but none more than retail. The retail experience is often both physical and digital, extending across owned, earned, and paid channels. And it can include everything from co-branded content to geofence-enabled mobile apps.

Plus the retail customer journey isn’t linear. It can start anywhere from a social influencer touting a brand to a long-tail search for product details. And context adds in yet another dimension that’s critical for retailers. Where is the customer right now — in a store or trying to find one? Do they want to buy, find product information, comparison shop, or get service? Even three years ago, 82 percent of smartphone users said they consulted their phones on purchases about to be made in a store, according to Google. Now it’s just the air we breathe.

Abundant data, but in silos.
Retailers can be data-rich — first-party data ranging from back-end ERP to point-of-sale systems, second-party data from partners and publishers, and third-party data from a myriad of sources. But even when all that data is available, silos limit its ability to inform personalized experiences. That can be a technology problem, the consequence of disparate data sets and models, or the result of very human organizational divides. It’s often all three.

Very demanding on content creation.
Personalization at scale requires content production at much greater volume and velocity. Big teams are costly, but until recently that’s the first option many retailers turned to for creating personalized experiences at scale. Even then, brute headcount can only take you so far.

Now the good news.

The talk about personalization in retail is increasingly turning to action, and the hurdles to doing it at scale are less daunting than they were even a few years ago. That’s largely the result of rapid evolution across a number of technology and data fronts. Take data management platforms (DMPs), for example. “Today’s DMP market is almost unrecognizable when compared to the landscape surveydin the first DMP Forrester Wave evaluation in 2013,” reports Forrester in “The Forrester Wave™: Data Management Platforms, Q2 2017.”

“The Forrester Wave™: Data Management Platforms, Q2 2017”
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The best DMPs now, such as Adobe Audience Manager, can unify data from all touchpoints and behaviors across a retail customer’s journey, as well as effectively incorporate second- and third-party data. Even more importantly, DMPs are giving retailers the ability to automatically identify and segment their audiences — so they can target their highest-value customers and deliver more personalized experiences at scale.

Arguably the biggest enablers of personalization at scale for retailers are automation, machine learning, and artificial intelligence. Leading retailers are increasingly automating everything from segmentation to content creation, and more and more retail customer experiences are being informed and even driven by AI and machine learning. Possibilities are growing quickly by the day, and we’re proud to be contributing to this growth.

But first things first.

We’ll dig into machine learning and AI further along in the series. We’ll have lots to say about it, too. But it’s important for retailers to be realistic about where they are with personalization now — and establish their “crawl, walk, run” path to personalization at scale. That’s why the next article in the series will focus on how to move forward — ways of measuring where you are in your personalization maturity, and how to establish a step-by-step approach to achieving personalization at scale.

Read the next article in our series, “The journey from one-to-all to one-to-one.

2017 Personalization Development Study,” Monetate, 2017.

Becky Tasker and Tommy Hummel, “Consumer Expectations Survey 2018, U.S. Only,” Adobe, 2018.

Consumer Technographics® North American Retail and Travel Survey, Q4 2017 (U.S.),” Forrester, 2017.

Laura Adams, Elizabeth Burkholder, and Katie Hamilton, “Micro-Moments: Your Guide to Winning the Shift to Mobile,” Google, September 25, 2015.

More than Three-Quarters of Consumers Say Personally Relevant Branded Content Increases their Purchase Intent Finds New Study from OneSpot and Marketing Insider Group,” OneSpot, December 12, 2016.