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GUEST OPINION Why do retailers still struggle to deliver true personalisation?

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We live in a world of personalization and retailers are under more pressure than most to deliver a personalised, engaging ‘experience’ if they are to hold on to customers. But many aren’t. Robin Coles, Microsoft Technologies Enablement Lead, HSO, takes a look at why and offers some advice

15 years ago, personalisation was little more than a pipe dream across the retail sector. Planning and allocation processes were conducted from the perspective of the department and the store rather than the customer – and in many retail environments this thinking is still prevalent.

Retailers may place focus on customer requirements based on the areas where their stores are located. For example, the tastes and behaviours of a fashion retailer’s customers in a rural market town could differ from those who shop at the same retailer’s central London branch due to general disparities between shoppers in distinctively different localities, yet there is still relatively little focus on the individual customer’s expectations.

The purchasing power of the millennial generation is estimated to reach £164 billion year on year from 2017, reaching over £8 trillion in their lifetimes according to figures published by Advertising Age, signalling the significant influence this generation has on the global economy. Another recent report highlighted that 73% of millennials would buy everything online if they could. If retailers are to benefit from this generation’s purchasing power, they must shift their focus onto individual customer requirements and explore ways to utilise the innovations of online shopping to revive the traditional shopping experience and entice consumers through the doors of bricks-and-mortar stores.

Even today, when a purchase is made in store, the retailer will capture the transaction, but most are unable to capture valuable information that is essential for forming the basis of an individual customer impression, including personal details such as name, age and gender. When compared to online retailers who can capture this information before a customer even considers a purchase by requiring website visitors to sign-up with an account to access pricing, offers and other benefits including exclusive email offers, product updates and one-click ordering, the significant challenges for store retailers fighting to keep shoppers entering their stores are made starkly clear.

Of course, the majority of bricks-and-mortar retailers collect customer data through their own online channels, but they face tough challenges when considering ways to identify those customers who have made purchases online when they shop in-store. The recommendation engines that retailers use to promote additional products to online shoppers could be utilised to boost sales in-store through targeted personalised messaging, but only once retailers establish reliable methods of identifying shoppers purchasing in-store, with the added capability of matching the in-store purchase and online purchases made by each customer to build a deeper impression of individual tastes, preferences, shopping behaviour and spending patterns.

It’s currently unlikely that retailers are able to join up a credit card transaction carried out in store with an online purchase unless the retailer uses the same payment vendor across both channels. This which would entail identifying a vendor that provides solutions for both online payments and instore POS systems as well as the capability to recognise a digital wallet or token ID assigned to each individual customer.

Beyond this, the use of a loyalty card that can be used both online and in-store would enable the retailer to recognise the customer and track their activity, building an accurate impression of each individual and a deep cache of valuable customer data through which the retailer could target groups as well as individuals with relevant offers and promotional messages. However, there is strong customer resistance to loyalty cards, seen as unnecessary in today’s digital world. The evolution of contactless and mobile payment solutions such as mobile wallets developed by Apple, Android and Google, signifies that consumers are less willing to carry an extra card in their physical wallets.

Following this inclination to carry less and utilise the smartphone as a cashless payment device, a loyalty app could be a viable option for retailers. However, this method for targeting individual consumers comes with its own challenges which include persuading customers to download the app in the first place and then relying on them to opt-in to push notifications through which retailers would promote their targeted offers. Building awareness around the app could entail a costly and long running marketing campaign, and on top of this retailers would need to consider ways to trigger messaging when an app user enters a store.

Clearly, joining up transactions from multiple channels is highly desirable, offering many advantages for retailers hoping to boost purchases through personalised offers across both channels and the best ERP platforms will prove integral to the development of this new omni-channel offering catering to growing consumer expectations. The better understanding a retailer has of its individual customers, the more it can develop its offering, building on brand loyalty and ensuring customer satisfaction, whichever channel they choose to purchase through. Ensuring the deliverability of this offering is the key to a successful future for retailers operating both online and on the high street.
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