We live in a time when consumers are demanding higher levels of personalisation than ever before, with 69% of consumers saying they want an individualised customer experience, but only 40% of brands possessing the capabilities to offer one. Evidence points to a supply issue, and in order to meet this rise in demand for personalisation, companies must ensure they’re equipped with the technology needed to meet their customers’ needs.
Whilst something as simple as addressing each customer by their first name makes headway towards gaining their trust, it is not enough to drive long-term loyalty and increase shopper lifetime value. Addressing a customer by their first name used to be a benchmark for success, but customers now expect much more integrated and personalised experiences in 2019. A name might help a business get a foot through the door, but it won’t guarantee customers will stay for any meaningful period of time, or return again.
A common challenge is that many brands do not currently have the right technology in place to implement more sophisticated personalisation strategies. Brands are under increased pressures to implement Artificial Intelligence (AI) into their marketing strategies, with 81% of marketers expecting the majority of their decisions to be data-driven by 2020, according to recent Gartner research.
Yet AI adoption is limited, with many businesses fundamentally lacking an understanding of how these technologies can be harnessed to add value to their business once embedded.
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By integrating AI into the marketing mix, businesses can create truly unique experiences and increase their engagement rates with customers, whilst at the same time driving efficiencies by freeing up time for marketers to focus on the less manual aspects of their craft. Alternatively, failing to recognise the benefits of AI, could leave marketers paralysed by their data, burnt-out by the demand to manually tailor experiences and ultimately risk losing out on future purchasing opportunities to competitors.
Recognising the hurdles and preparing for success
Understanding the obstacles that stand between providing adequate customer experience and an excellent one are key to any businesses’ future success. Consider that Hitachi Capital’s recent research reveals that whilst 70% of retailers now consider investment in technologies such as automation, artificial intelligence (AI), augmented reality (AR) and blockchain a priority, more than one in three admit they lack an understanding of how these areas could add value to their business. This is the first hurdle companies must recognise if they’re to future proof their strategy.
The beauty of AI comes from its inherent ability to paint a picture of the user journey for businesses, to connect the dots and then alter the experience to better meet that customer’s needs.
For example, if a data set tells you that a customer is returning, it allows you to leverage this information to ensure they’re met with new content they may not have come across before, whilst also promoting the tried and tested products you know they keep coming back for, time and time again.
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A key challenge that brands face with their data is trying to figure out what is most important. Instead of focusing on previous historical behaviours as is often the case, it’s crucial they wake up to the value of analysing “in session” behaviour – i.e. what the visitor is doing right now.
AI allows businesses access into all of these insights to try and establish patterns from the data and ultimately deliver the most individualised experience for that moment in time, so the human doesn’t have to make this decision manually.
AI-driven personalisation software, therefore, enables marketers to make informed decisions – to order and prioritise content in an intuitive way and ground the decisions they make in concrete insights, without taking up an employee’s personal time.
Data, data, everywhere…
When it comes to personalisation, retailers often fall into the trap of thinking they don’t have the right kinds of data insights, or a high enough volume, to fully understand their customers’ shopping habits.
This is a common misconception and the second hurdle to overcome. Recognising that in fact, some of the most simple data sources can yield valuable insights and are already available to your businesses, allows you to leverage this information to its fullest potential.
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Purchase history, location, recently viewed products or the type of devices being used, all tell insightful stories about a buyer’s intentions, interests and needs. By harnessing the power of AI and machine learning, businesses can individualise product recommendations and evaluate hundreds of visitor data points in real-time. AI does the hard work, making it easy to test and optimise, recommend products and segment and target, whilst at the same time reducing the time businesses would spend trying to decode this information manually.
The proof is in the pudding
True belief in the value personalisation technology can bring to your business shouldn’t be based on anecdotal evidence or a hunch. What should be top of mind for all executives and strategy leaders is the impact AI can have on the bottom line.
According to our recent Personalisation Development Study, for companies that exceeded ROI goals in 2018, there was a direct correlation between their willingness to invest in personalisation and an embedded technology and expertise within its organisational structure and culture.
The study also found that 86% of companies achieving high ROI reported that personalisation made up 21% or more of their marketing budget. Moreover, 74% of businesses that exceeded revenue goals in 2018 have a dedicated budget for personalisation.
Research shows that prioritising customer loyalty and lifetime value by investing in a robust, AI-driven personalisation strategy can drive long-term success. Evidently, the brands exceeding their targets are the ones taking a more customer-centric approach seriously.
Ultimately, customers expect seamless retail experiences and greater levels of personalisation than ever before. By taking these small steps, businesses can ensure their customers are returning time and time again. Recognising the common hurdles and getting up to speed with the benefits of AI, can, therefore, ensure companies provide a shopping experience they can be proud of.
Written by Amaar Mohammadally, strategy consultant at Monetate