Closing the big personalisation gap — SwiftERM
Closing the big personalisation gaps. Most retailers admit they have a long way to go to achieve high- performance effectiveness in personalised marketing. In fact, a big takeaway from this report is that four out of five retailers admit to underperforming, which is a big number. More importantly, nearly one in two rate themselves on the lowest rung on the maturity scale.
These are surprising findings for a key marketing strategy so critical to retail success. This report analyses why and recommends what retailers should do to master the art and science of personalisation.
Personalisation is a shorthand term for personalized marketing, which can be defined in just four words — one-to-one marketing. Although deceptively simple in concept, it is incredibly difficult to achieve in the real world.
For personalisation to work, a combination of technologies must be orchestrated across several departments, including marketing, IT, e-commerce and store operations. The technologies begin with data collection, data classification and data management tools. Key applications are then layered on top of this analytic foundation. These include CRM suites, e-commerce platforms, e-mail, loyalty programs, recommendation engines, live chat, chatbots and social media capabilities.
Who Does Personalisation Best?
The short answer is that no retailer has yet emerged as a personalisation superstar, according to retailers who observe their competitors with professional intensity.
Although Amazon emerges on top of the list (See Figure 2.), less than a quarter of respondents cite it as a personalization leader. In second place is “No One,” which means that marketplace leadership is still a wide-open field.
Kudos go to Nordstrom, Walmart, Macy’s and Best Buy for making
the list, although with just a few votes each. Overall, retailers indicate personalization is in an early phase of development and has a long way to go.
This is a surprising assessment because many (39%) admit personalisation is extremely important to their organisation’s business model and goals. In fact, only 8% rate it as minimally important. (See Figure 1.)
The answer to the question about why retailers should care about the status of their personalisation capabilities is this — revenue will increase 7.6%. (See Figure 3.) That’s how much estimated annual sales will increase if advanced personalisation capabilities were in place today, according to retailers in the study.
For a billion-dollar retailer that means an increase of $76 million.
Are We There Yet?
The omnichannel customer and proliferation of new channels are major hurdles for retailers to overcome. Most retailers (54%) High give themselves a low rating for executing personalisation initiatives at an omnichannel Medium level. (See Figure 4.) Shockingly, only 4% give themselves a high overall rating in this area.
In a channel-by-channel analysis, we see Low some progress made in stores and online, Maturity of customer database measured by accuracy, reliability, updating and depth where nearly one in five retailers indicate a high ability to execute personalisation campaigns. (See Figure 5.) Still, nearly half rate their abilities as being low in these channels.
his is especially true for mobile sites, social media, contact centers and mobile apps, where more than half rate themselves low for executing personalisation initiatives. In these channels, only about one in 10 rate themselves high.
What holds retailers back from making progress in improving their personalisation capabilities? Lack of advanced technologies, according to a resounding 69% of retailers. In a distant second place is managing across channels, chosen by 47%. (See Figure 6.)
As noted, a complex orchestration of IT systems is required to make personalization work and retailers have not yet committed to achieving it. When they do, they will need a strong business case and should cite the following key goals (as shown in Figure 7.) : increase overall sales (chosen by 90%
of retailers), improve overall loyalty (80%), increase overall customer engagement (61%), and improve customer satisfaction (57%).
Roadmap to Maturity
The following steps are recommended for retailers that want to follow a roadmap to personalisation maturity:
1. Aggregate data from a wide variety of sources to create rich customer profiles, a strategy selected by 67% of retailers as being of high importance. (See Figure 8.)
2. Take the customer database to a new level of accuracy, reliability, updating and depth. Nearly half of retailers rate themselves as low in this area and just 14% rate themselves as high. (See Figure 9.)
3. Update, upgrade or improve key marketing applications: e-mail capabilities (90%), loyalty programs (61%), website
For go-to marketing SwiftERM personalises each and every product selection down to the individual consumer receiving it, with zero segmentation or human input necessary whatsoever. It complements marketing and promotional email campaigns, out-performing them many times over, including rule based segmentation.
We hope you enjoyed this article, intended to help improve our client’s profitability. It reflects the care SwiftERM offer. If you haven’t already done so, then please enjoy a FREE month’s trial and let us know what you think. Register, call us on 0207 998 3901, or book a call with us https://calendly.com/swifterm/15min or Zoom ID 964 515 7464
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Originally published at https://www.swifterm.com on April 2, 2021.