By David Selinger
Welcome to a new era of retail – where the shopper is in charge. Consumers now engage with brands and stores across channels, using whichever methods suit them best. Technology has unleashed freedom of choice and action, thereby creating a shopper with heightened expectations about how the shopping experience should unfold. To compete and win, retailers must not only accommodate the complex behaviour of this new kind of consumer, but also provide dynamic, engaging experiences at whichever touch point the customer chooses to engage. The customer expects a personal service, whether online, on the telephone or in person.
On the high street, a good sales assistant can make all the difference to customer engagement. The presence of someone available to answer questions, who knows when to make recommendations without being pushy or overwhelming, can make the difference to a customer leaving with a purchase or empty handed. In the US, electronics retailer BestBuy reported last year that a two per cent increase in employee interaction with customers corresponds, on average, to a $100,000 annual rise in sales at that location.” The customers themselves would seem to support this. In a survey conducted by Ovum the vast majority (83%) of shoppers said they would welcome proactive assistance or find it to be a “strong benefit.” Likewise, 86% of customers said that they would welcome extended offers or help during self-service transactions.
The challenge for retailers is how to create a ‘virtual’ version of the high street shop assistant. Even after Amazon launched its online bookstore in the mid-1990s, online stores consisted largely of unwieldy product lists on static pages. Huge progress has been made in the past decade and a half, but it still took several years before the online customer experience even vaguely resembled the richness of shopping in a physical store.
Today, the majority of online shops offer some kind of product recommendations, but this is frequently based on a limited set of information, such as the currently best-selling products. Or instead of ‘Top Sellers,’ the retailer often displays recommendations under the heading ‘May We Suggest’ or ‘May We Recommend,’ potentially fuelling mistrust in the consumer, who may believe that the retailer is simply trying to clear inventory or promote higher margin products. Forward-thinking retailers need to go beyond this, to truly personalise a customer’s experience based on individual preferences and behaviour rather than through manual merchandising of products or by solely relying on community purchasing patterns.
An example of a retailer who has succeeded in this objective is Wine.com, one of the world’s most visited wine web sites. Wine.com set itself the ambitious goal of competing with local speciality wine stores to deliver the same kind of personalised recommendations that would be provided by an in-store wine expert. To do this, the company implemented a personalisation engine that took into account multiple pieces of data, including each shopper’s current browsing behaviour and geographical location, as well as the point of view of the wider Wine.com community. This allowed Wine.com to expose shoppers to relevant products that they might otherwise not have considered. Recommendations such as ‘Customers who viewed this also viewed’ or ‘Customers who viewed this item ultimately purchased’ use the wisdom of the crowd (the Wine.com community), whereas a recommendation like ‘£30 and above bestsellers’ takes into account the visitor’s preference for pricier items that are also popular.
In addition, an individual’s past preference and purchase patterns are acknowledged through recommendations such as ‘Available vintages of wine that you’ve purchased previously.’ In this manner, the online shopping experience transcends the in-store experience, making recommendations based not just on general trends, but also on individual affinities for pricing, grape variety, origin and other product attributes—information that a live shop assistant might not easily be able to ascertain during a visit. As a result, no two shoppers are recommended the same products on Wine.com, and the retailer has enjoyed a 15% increase in average order value.
The technology available today represents a huge opportunity for online retailers. By implementing dynamic personalisation software, it is possible for the first time not only to mimic the shop assistant serving a customer—whether it is for the first time, or whether he or she is a regular shopper. The ‘virtual’ shop assistant knows the customer well, remembers what he or she bought on previous visits, acknowledges past and current interests and knows just what to offer next.
David Selinger is founder and CEO, RichRelevance