Opportunity for retailers to address personalisation shortcomings

Felix Kruth, product director at Voyado

Personalisation has very much been under the spotlight during Covid-19 as shoppers have gravitated to online channels and expected an experience that mimics the one enjoyed in-store but it has all too frequently been found wanting.

Phil Bacon, senior ERP consultant at Xpedition, says: “Lots of businesses will now be looking at themselves coming through Covid-19 having originally thought they were good online but now they’re realising that they are poor. The personal experience of customers buying goods online is not so good. The in-store rapport has not been replicated online.”

Xpedition has partnered with customer experience specialists Voyado to address these problems that often revolve around retailers buying personalisation tools and relying on them to simply fire out emails containing product recommendations based on shoppers’ previous online behaviour.

Although such capabilities are a great addition to a retailers’ personalisation armoury because they do add value, they need to do more than just this. Felix Kruth, product director at Voyado, says: “Personalisation is more than just product recommendations in email communications. These tools will see that the customer looked at jackets and so send them recommendations for more jackets. Advanced algorithms are used in these tools but it does not always mean the end result is an experience the customer wants.”

He is instead an advocate of taking a lifecycle-based approach that involves determining where on the journey the customer is with the retailer rather than using algorithms to analyse what products the person should like.

“The personalisation strategy is applied when the customer does things like buys a first product, returns an item, contacts customer service or simply follows the retailer on Instagram. It focuses on how the customer should feel after taking any of these actions. These personal interactions become closer to the way personalisation works in a store. It mimics the relationship aspect,” he explains.

These personal interactions become closer to the way personalisation works in a store. It mimics the relationship aspect.

Such a strategy is not just about mapping out alternative customer journey paths because these invariably revolve around customer purchases, according to Kruth, who prefers to bring in other factors beyond transactions in a more holistic approach: “Often with personalisation we get stuck with focusing on transactions but shopping never has been this way.”

Kruth cites customer service platforms as one way to overcome this transaction-driven scenario. If it is integrated into a retailers’ broader systems it could, for instance, give visibility of VIP customers who could potentially be given faster order delivery and expedited refunds for returned goods.

This clearly improves service levels – and will likely result in increased sales – but all too often for many retailers the primary metric within e-commerce is conversion rates and this is rather a blunt instrument. In contrast, Kruth says the best companies are invariably structured as customer organisations – with the likes of chief customer officers on board – and not sales organisations. 

“It could be the case that the conversion rate in a store is low but that people drank lots of coffee in there. The overall experience for the customer could therefore be positive,” says Kruth, which could ultimately drive greater sales online rather than in the physical store.

Phil Bacon, senior ERP consultant at Xpedition

To ensure visibility of the interplay across channels and to manage the complex data flows it is essential that retailers have one source of data, according to Bacon, who says Xpedition provides this capability for its partner Voyado to access the relevant, consistent data regardless of channels. “We give one version of the data across omni-channel organisations and enable marketing departments to be cleverer,” he suggests.

Such data will become much tougher to accrue from customers now that legislation around e-privacy, involving the shortening of cookie lifespans and browser data being forgotten more quickly, is increasingly being implemented. But Kruth suggests this changing landscape represents an opportunity for retailers.

“Much of the personalisation tools used by retailers have delivered okay results without the companies really knowing their customers. Companies will now need to be properly consumer centric, which will force them to improve their personalisation efforts. Many businesses are now working hard at customer log-ins, which more likely goes well if they have great loyalty,” he says.

Companies will now need to be properly consumer centric, which will force them to improve their personalisation efforts.

Kruth predicts that although many retailers are concerned by the changes hitting the e-commerce environment he believes there is a tremendous opportunity for businesses to bloom if they take the right approach to personalisation and invest their resources in the relevant technology solutions.

Glynn Davis, editor, Retail Insider