The Reality Of Personalization

Transcription

1 Website Optimization The Reality Of Personalization A three-part series covering the different levels of personalization, how to deploy them across channels, and ultimately develop a seamless omnichannel experience. 75

2 Reality of Personalization Table of Contents Table of Contents Preface... i Part 1: Defining Personalization... 1 Personalization Umbrella... 1 Customization... 1 Collaborative Filtering :1 Real-Time Personalization... 1 Part 2: Meeting Consumer Expectations For Deep-Level Personalization... Functional Requirements for True Personalization... 3 Customer Profiling... Real-Time Data Collection... Real-Time Data Delivery... Part 3: Omnichannel Retail: It s Here. It s Real. It s Personal... 7 Consumer Buying Process Applied To Channels... 7 How A Consumer Might Journey Through The Buying Process C-Level Support... Personalization Evaluation Channel Implementation... 9

3 Reality of Personalization i Preface In a world where consumers expect an engaging shopping experience, businesses are seeking to deliver on that expectation by developing strategies that speak to each customer on an individual level. A proven way to accomplish this is to implement a personalization strategy that includes product and content recommendations and leverages the power of real-time customer profiling. In this series, entitled The Reality of Personalization, we will address the different levels of personalization, how to deploy them across channels, and ultimately develop an omnichannel experience.

4 Reality of Personalization Page 1 Part 1: Defining Personalization Personalization Umbrella Personalization has become increasingly common over the past decade, and what was once a basic black box implementation has become an umbrella for many techniques with varying degrees of complexity. From geographic targeting to true 1:1 real-time profiling, personalization is a catch-all for leveraging consumer data to deliver recommendations for the purpose of providing the most engaging customer experience possible. As businesses develop a personalization strategy it is important to understand the benefits of the various options, and where each fits in accomplishing their goals. Customization Customization is accomplished by delivering different experiences to groups of people who share certain attributes. Among the common techniques for customization are multivariate testing and segment targeting. Multivariate testing is used to find the best performing version of content, products, and creative among the various options presented. Segment targeting is achieved by utilizing established knowledge of natural clusters in the customer base and targeting people based on this knowledge. Common implementations are geographical, time-based, and utilizing internal segmentation models to manually deliver customized experiences. Customization techniques, such as testing and targeting, that take customer response data from iterative testing, geo-based affinities and other demographic and known factors into consideration, provide useful information for developing a personalization strategy. However, they deliver recommendations based on group and demographic behaviors, and therefore as a stand-alone strategy, do not engage shoppers on an individual level. Collaborative Filtering Also known as Wisdom of the Crowd, collaborative filtering is a personalization technique that collects behavior of other shoppers and uses that as a source for determining interests and preferences. An example is the Amazon, others who bought this also bought that technique. This is a useful technique for offering accessories or other complimentary products based on what others shopping for the same product have purchased. While it can be an important piece of a personalization strategy, and proves beneficial for new customers for whom there is no history or profile data, collaborative filtering is also based on group behaviors and does not reach shoppers on an individual level. 1:1 Real-Time Personalization 1:1 profiling utilizes an aggregation of multiple data points, including segmentation, behavioral profiling, purchasing history, and social data, to create a profile for each unique customer. This technique delivers a more personalized experience, but is not truly individualized unless the profiles are updated in real-time.

5 Reality of Personalization Page 2 1:1 real-time personalization is the only technique that delivers a truly individualized experience, incorporating deep customer profiling with real-time updates, to deliver the most relevant recommendations based on shoppers current session, and not solely on historical data or group behaviors. This approach has proven to outperform simple customization, collaborative filtering, and profiling techniques that do not incorporate real-time profile updates. 1:1 real-time personalization can be used as a stand-alone technique, or in combination with customization and collaborative filtering, based on each company s individual requirements and data availability.

6 Reality of Personalization Page 3 Part 2: Meeting Consumer Expectations For Deep-Level Personalization Today s connected consumers are savvy shoppers. With all the avenues available to retailers for engaging them, keeping customer attention, building loyalty and driving sales has never been more competitive. Personalization, once a nice to have, is now a necessity. Shop.org reports that 3 in 4 online shoppers prefer retailers that use personal information to improve the shopper experience. As this has become the norm, consumers are demanding increasingly deeper levels of personalization by giving their business to companies that go beyond the basics, to deliver more individualized shopping experiences. We ve all been there, searching for just the right product only to be inundated with a barrage of irrelevant search results and recommendations. What do we do? With so many shopping options at our fingertips there is no need to dig, we just move on to the next site. Deep-level personalization sifts through the sea of available products to deliver only the most relevant recommendations, keeping shoppers on your site, engaged, more likely to convert and return. For businesses seeking to gain a competitive advantage and optimize revenue it is important to understand not only the functional requirements for true personalization but the right degree and combination of these that will achieve the individualized shopping experience that only deep-level personalization can provide. Functional Requirements For True Personalization 1. Customer profiling 2. Real-time data collection 3. Real-time data delivery 1. Customer Profiling Who are they? 3 in 4 online shoppers prefer retailers that use personal information to improve the shopper experience. - Shop.org Holiday Industry Stats A collection of multiple data points, customer profiling can vary among personalization techniques. Factors such as purchase history, demographics, browse behavior and context provide a clearer picture of each unique shopper, and analysis of these interactions helps identify behavioral patterns and preferences, such as price sensitivity, brand partiality, style favorites, a penchant for specific product categories and more. Why does this matter? Simply put, consumers want help finding what they are looking for and are more likely to engage with your site and purchase if you make the experience about them. For example, you have a customer that almost always browses and/or purchases Makita Tools in the $50-$150 range. This customer clicks on a drill. What personalization strategy is more likely to convert?

7 Reality of Personalization Page 4 1. Show them what others who looked at this drill bought, which could include any brand, type of tool, price point and product category? 2. Individualize the experience with recommendations based on the customer s profile, by delivering other Makita tools such as additional drills, saws, and battery chargers that fit the brand, price range in which they normally purchase and product category? Granted, this is an easy example, we all know it s option 2. Still, it demonstrates the difference between a basic strategy, in this case a collaborative filtering technique, and a stronger strategy that filters in individual preferences in combination with real-time browse activity. Customer behavior is usually more complex than in the above example, which lends to the necessity for developing deep customer profiles, a must for deep-level personalization. 2. Real-Time Data Collection What Are They Doing? In order to develop deep customer profiles, you must have real-time data collection. Historical and demographic data, while very important, are only a part of the picture. Understanding what your customers are doing now is the only way to engage them with personalized recommendations that fit their current need. For example, browse and click behavior, shopping cart activity, keyword searches and interaction with reviews and ratings all provide valuable information for determining the most relevant recommendations. However, in order to respond to the customer s current need, you must also be able to deliver profile based recommendations dynamically and in real-time. 3. Real-Time Data Delivery What Is The Optimal Experience For Them Right Now? This is where it can get tricky. Because, even the highest levels of personalization can have an element of real-time data collection that results in immediate recommendation delivery. However, many techniques are based only on product or page context and, as such, produce the same recommendations for everyone. In order for it to be true real-time data delivery, visitor context must be applied. For example, a customer browsing your site clicks on a women s jacket. Below is an example of how this might look by technique: 3a. Shopping Cart and Purchase Analysis This technique would produce personalization types like Top Sellers or Co-Purchased, gathering the best recommendations to show based on analysis of overall product sales and delivering the same experience to everyone. North Face Taheri Calvin Klein DKNY $ $ $ $89.00 Result: a variety of styles, brands and price ranges based on product and sales data analysis. No individualization.

8 Reality of Personalization Page 5 3b. Collaborative Filtering This technique would produce personalization types like co-purchased (Others Who Bought This Also Bought) or co-viewed (People Who Viewed This Also Viewed), based on group behavior (wisdom of the crowd), and deliver recommendations in context of the product clicked, not the visitor. North Face Adidas Adidas Tights Hurley $ $ $81.00 $67.00 Result: a variety of styles, brands and price ranges based on how other shoppers have interacted with the originally clicked product. Product to product affinity targeting. Not individualized. 3c. Customization This technique would pull in another layer of group filtering in relation to the customization type in place. For example, Geo-targeting would filter recommendations by region, Weather would react to current weather in the region and Customer Segmentation would filter by set segments. North Face North Face Lole Merrell $ $90.00 $ $90.00 Result: a variety of styles, brands and price ranges based on location. For example, popular warm weather jackets for a Metro NYC area visitor who is shopping during the winter. Highly targeted. Not individualized. 3d. 1:1 Real-Time Personalization This technique could incorporate any of the above, but in addition to the above would pull in the customer s historical profile information and real-time browse activity to predict and produce individualized recommendations specific to the customer s past preferences and current shopping activity. Land s End Columbia Land s End Columbia $65.00 $70.00 $50.00 $75.00 Result: styles and brands based on the shopper s historical profile and real-time browse activity. For example, top selling cold weather jackets to a Metro NYC area visitor in the winter, with the customer s brand preferences for Lands End and Columbia, in their most often purchased price range of $100 or less. Highly individualized.

9 Reality of Personalization Page 6 Certona s 1:1 Real-Time Personalization This personalization technique leverages a powerful combination of deep customer profiles, real-time data collection and real-time recommendation delivery based on unique customer profiles and real-time browser activity. Elevating the customer experience, 1:1 real-time personalization brings individualization to all personalization types, from the most basic such as Top Selling to the more complex strategies like Profile Discovery. With flexible business rules it is easy to create merchandising schemes around a variety of personalization types and overall strategies to engage customers, drive sales and meet merchandising goals. As a result, this deep-level form of personalization has proven to be the highest performing technique. Not all businesses deploy personalization with vast amounts of historical customer data. For those that do, historical data can serve as a strong starting point for customer profiles. For those that do not, it takes just a few clicks to begin creating a behavioral profile. As shoppers interact with your site their profiles are augmented in real-time, increasing the engine s ability to predictively deliver intelligent recommendations specific to each unique visitor. The benefit is that regardless of where you are in your data collection efforts, 1:1 real-time personalization will create and continue to deepen customer profiles resulting in increasingly individualized experiences, and the deep-level personalization that today s connected consumers have come to expect. Real-Time Data Delivery Overview Examples Basic Personaliza on vs. Certona s 1:1 Real-Time Personaliza on Common Personaliza on Types and Techniques Real-Time Collec on Real-Time Delivery Individualized Real-Time Collec on Real-Time Delivery Individualized Top Sellers No Yes Co-Purchased No Yes Bought Together No Yes Subsequently Purchased No Yes New Arrivals No Yes Top Rated No Yes Trending No Yes Accessories No Yes Recently Viewed No Yes Collabora ve Filtering Personaliza on Types Most Popular No Yes Search-Viewed No Yes Co-Searched No Yes Viewed-Purchased No Yes Co-Viewed No Yes Mul variate Tes ng No Yes Segmenta on No Yes Geo-targe ng No Yes Time of Day No Yes Weather No Yes Pro e Discovery NA NA NA Yes Di erence Shopping Cart and Purchase Analysis Personaliza on Types Usually consists of one of the above, may have a customiza on layer. Data Driven Personaliza on Types Customiza on Methods Most Personalized Across En re Catalog Can combine personaliza on types with customiza on layers, customer behavioral pro les, current ac vity and exible merchandising rules for the most individualized experience.

10 Reality of Personalization Page 7 Part 3: Omnichannel Retail: It s Here. It s Real. It s Personal! Introduction Purchasing decisions are no longer exclusive to one channel. Prior to buying, consumers access multiple points for product information and comparison shopping. How many times have you been in a store and witnessed shoppers on their mobile phone scanning bar codes and looking up products? How many times have you done this yourself? Researching products, showrooming and looking for deals prior to making a purchase are all a part of the modern buying process. To this end, it is more important than ever to ensure that you get the right product and offers in front of consumers at the right time, and that interaction with your brand and individual products is consistent across all channels. Previously defined as recommendations, personalization has become synonymous with the customer journey and is fundamental to achieving omnichannel success. As the buying process has expanded in complexity, with technology providing retailers more opportunity than ever before to reach consumers with personalized recommendations, content, creative and offers, the expectation placed on retailers has evolved. Today s connected consumer expects information to be available at their fingertips. Whetherat home, on their computer, scanning an offer, searching from their mobile device, browsing a store aisle or reaching out to customer service, they expect retailers to guide them through the vast number of available options to help them find just the right product. Adisjointed experience from one channel to the next leads to frustration that can prompt themto go elsewhere. Personalization is the conduit for meeting the customer s expectation for finding the right product, and the glue that ties channels together, harmonizing data across all customer touch points to create a seamless omnichannel experience as consumers journey through the buying process. Consumer Buying Process Applied To Channels Usually Result of: Product solves a problem Product fulfills a desire Product recommended Need/Want Recognition Seek Information Compare Alternatives Evaluate Options Web Social Contact Center Mobile In-store Make Purchase Web Mobile In-store

11 Reality of Personalization Page 8 Ex.: How A Customer Might Journey Through The Buying Process Store Search Landing Page Browse Products View Video Click Ad Remarketing Call Contact Center Mobile Check-in POS Purchase Share on Facebook Web Mobile Social In the era of agile commerce, businesses must be able to deliver highly dynamic, relevant, and personalized content and experiences to customers across touchpoints. This means driving relevant, personalized, and linked offers across marketing, social media, and display marketing campaigns, as well as across websites, mobile applications, and offline channels. Merchandising, marketing, supply chain, customer service, and technology teams must all work to integrate systems that can enable both consistent and contextual interactions with customers. - Forrester Report, Four Steps to Your Agile Future Creating a seamless customer journey requires that businesses go through a journey of their own. First, embracing personalization as more than an enhancement, but rather a long-term corporate strategy, is necessary to gaining a competitive advantage and is imperative to omnichannel success. In addition, there are definitive steps that can be taken to build a foundation for omnichannel personalization. These steps will vary depending on where your business is with data collection, channel implementation and your current personalization methodology, but the elements that support a successful omnichannel personalization strategy remain the same. C-Level Support Organizational and cultural changes are typically a part of moving to omnichannel. These types of changes usually require the support of, and are often driven by, executive management: Developing a Vision and Strategy: Moving to omnichannel is usually not a singular implementation, but a journey through multiple implementations that lead to a complete omnichannel approach. Developing an overarching vision and communicating a clear strategy for achieving this vision is necessary for structuring the organization to achieve omnichannel success. Establishing Business Objectives: Channel business objectives should be clearly defined and consistent across the organization with proper alignment to support omnichannel goals, such as, enhancing the customer experience and increasing customer loyalty, retention, lifetime value, acquisitions and overall revenue.

12 Reality of Personalization Page 9 Allocating Necessary Resources: Deploying technology that supports the omnichannel vision, partnering with top tier providers and assigning internal resources are essential to building the groundwork for efficiency and success. Breaking Down Silos: Business units that support each channel often operate independently of one another. A convergence of these units, their goals and success drivers is essential to a comprehensive omnichannel strategy. Democratizing Data: In order to create a complete view of each customer and deliver a seamless personalized experience, data must be interconnected across channels. For example, data collected at POS and through reward cards should be available for online profiling and vice versa. Personalization Evaluation The most well planned omnichannel strategy cannot succeed in creating the seamless experience that consumers have come to expect without personalization. Making sense of your of your data, leveraging it to deliver individualized customer experiences and harmonizing those experiences across all channels is the job of personalization, and the purpose of moving to omnichannel. Make sure that your strategy includes a personalization solution that can do the following: Deliver True Personalization: Beyond wisdom of the crowd and testing and targeting, you want a solution that creates a clear picture of each unique shopper to predict and deliver the most individualized experience. This should include deep customer profiling as a source of historical behavioral data, and real-time data collection and delivery for responding in the moment with the most relevant content, creative and recommendations. Offer Flexibility and Ease of Use: Business rules should be flexible and enable you to curate personalization strategies for achieving your specific business goals. In depth testing and analytics should be easily accessible for optimizing personalization strategies throughout channels as your omnichannel business evolves. Provide Ease of Implementation: The implementation process should be guided by a team of experts to offer the most efficient means of deploying personalization. Your provider should be partnered with top tier technology partners to offer easy integration with channel platforms, and have the ability to work with internal platforms. Supply Continuous Advice and Expertise: Guidance should not end after implementation. Your provider should act as a partner, providing advice on best practices, recommendations specific to your business goals and ongoing innovations to keep you at the forefront of personalization evolution. Channel Implementation Most businesses are not prepared to make an immediate move to omnichannel. As the saying goes, don t try to boil the ocean. Take a phased approach where you can test and collect learnings as you build out your omnichannel personalization strategy. Most businesses begin with web and/or personalization, then move into mobile, contact center and lastly, in store. It is important to determine the order of channel implementation that makes the most sense for your business. Below are some considerations:

13 Reality of Personalization Page 10 Consumer Demand: Evaluate market trends for your industry to determine the channels to which your target market levitates. This includes not just the channel in which they purchase, but where they reach out for product information, ratings, reviews, and comparison shopping. Your Customers Desires: Analyze the purchase, browse and behavioral patterns of your customer base to determine the channels that are most important to them. Resources and Funding: Identify channels that are appropriately sourced with technology, staff and budget for moving forward immediately. Best ROI: Determine the channels that will provide the most immediate return on your investment. Ease of Implementation: Pinpoint channels in which personalization can be easily implemented. These may include areas where platforms are in place for easy integration, where minimal IT involvement is required or a combination of these and other factors. Omnichannel is here. The reality is that consumers already search and shop in every channel, and they expect their experiences to be seamless and personal. To learn more about developing an omnichannel personalization strategy, including the five functional requirements for omnichannel success, visit Certona.com and download our white paper entitled, The Power of Omnichannel Personalization. About Certona Delivering personalized customer experiences for the world s most popular brands, Certona is the leader for true omnichannel personalization. Trusted by more than 400 top ecommerce sites, Certona s real-time personalization platform increases engagement and conversions by leveraging Big Data and serving up individualized content, promotional, and product recommendations across all customer touch points. Combined with a flexible business rules engine, marketers can harness the power of real-time behavioral profiling while maintaining control over their recommendation and personalization strategies. Personalize Anytime Anywhere: Certona.com Personalize any channel Learn more: sales@certona.com certona.com