Weak personalization can have a negative effect on consumers, with two in five saying they would stop buying from a brand if they perceive their ads to be unrelated or poorly targeted, according to a report by marketing platform Emarsys.
The study, which interviewed 2,000 consumers in the UK, highlights shopper’s growing demand for more personalized offers (60%), adding that only 6% of consumers currently believe they receive these.
Creating a tailored experience is therefore key, with 41% of respondents say they would shop again with a brand if the offers they received were clearly unique and personalized to them.
However, brands are struggling to scale their human-led personalization efforts, identifying the need for automation processes and artificial intelligence (AI) programs.
“The customer is expecting an experience that they want to be personalized in a speed that is impossible,” a representative for German agile-retail start-up Les
ara, told the audience at the recent Emarsys Revolution conference. He added how technology is an enabler for personalization, and how the company has been using data as a “north-star” to guide its efforts.
Also at the conference was membership-only e-commerce brand, BrandAlley, which shared how its effort to tailor its email content to previous purchasing behaviour with the help of AI, increased traffic to its site by 16%.
AI adds immense value to personalization strategies, noted Grant Coleman, VP and market director of the UK and Nordics at Emarsys: “AI tips this balance in [retailers] favor, doing all the legwork so that communication is always tailored across every channel along the purchase lifecycle, eliminating the risk of upsetting valued patrons.”
Across the industry we’re seeing a steady increase in brands focusing on personalization by deploying tools such as AI. Recently, H&M invested in Thread, a UK-based men’s styling service that uses a combination of man and machine to tailor recommended items for its users. The move shows that the Swedish group is well aware of such technology as an important catalyst for all future consumer interactions.
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If there was one overarching term at Shoptalk Europe this week, it was artificial intelligence. From machine learning to visual search, natural language processing and more, the role of systems that facilitate smarter and more personalised customer experiences was key.
Keynote talks from Google, Alibaba, Westfield and more all referenced such a focus, with repeats of numerous big stats bandied about in terms of where this space is moving. By 2020, 85% of customer interaction in retail will be managed by AI, according to Gartner, multiple speakers said. And 30% of all companies will employ AI to augment at least one of their primary sales processes by the same time period, they further added.
“We’re putting AI front and centre as a driving force to make [smart commerce] happen,” noted eBay’s chief product officer, RJ Pittman. “The curve is steep but the opportunity is extraordinary. So we’re going to start climbing; we’re right at the precipice of a transformational inflection point.”
Other such initiatives were referenced throughout the conference too. Levi’s noted its virtual stylist chatbot, created with Mode.ai, which aims to replicate the experience customers have in store by helping them with the fit and style of jeans to suit them.
Topman’s global digital director, Gareth Rees-John, highlighted his work with a Canadian company called Granify to help optimize the menswear store’s e-commerce conversion rates by serving different messages to shoppers when they are at flight risk. The notifications use machine learning to address issues that will help retain the individual in question, such as letting them know an item is low in stock, as one example. It’s seeing an uplift of 3-5% in doing so.
Flash sales site BrandAlley meanwhile, outlined how it works with marketing automation company Emarsys for persona based targeting in its email campaigns, which has led to a 16% conversion lift. And AI firm Sentient Technologies showed how providing 256 real-time website design variations for consumers for Swedish flower delivery chain Euroflorist, has resulted in a 17% increase in conversions.
An underlying thread throughout however, was how much more work there is to be done to move towards true personalisation. Rees-John reminded the audience how many retailers are still operating on legacy systems with “jumbled data” making it hard to move forward fast, for instance. His focus, he said, is on “making little changes that have robust business cases”.
Meanwhile, Bruce Macinnes, chairman of BrandAlley, noted that he hopes to move towards personalising the entire customer journey from homepage to checkout. “We have plenty of personalised content along that journey but it’s not fully personalised yet and we believe there is a way to go to using all the data that we have,” he explained.
Charmaine Huet, chief marketing officer of Woolworths South Africa, wants to work towards having millions of different communications plans every day. “78% of our revenue comes from credit cards, so we already know a lot about our customers. Now what we’re really thinking about is how do you really personalise the experience for them and how do you create content that is really personalised and resonates with [each of them] – and this is really difficult, it takes humans and data and AI.”
Vladimir Stankovic, global digital and e-commerce director at Camper, said AI can be seen as the enabler for all this. “It will allow us to get closer to our consumer, to give them what they want.” His big hopes lie in how it can impact discovery: “Natural language processing and visual search are providing new ways to discover product. I believe there is huge value from this technology.”
Visual search companies particularly dominated the exhibit floor, including the likes of Slyce, which works with Tommy Hilfiger, and Fashwell, which works with Zalando. Ted Mann, CEO of the former, said being able to search through your camera lens will become common practice for shoppers down the road, noting new functionalities his team is adding including being able to use visual search to create wishlists and to fill shopping baskets.
In his keynote talk, Tim Kendall, president of Pinterest, likewise said “the future of discovery will be visual”. He pushed the idea that Pinterest is aiming to do to discovery what Google did to search, with visual search at the heart of achieving that.
The company’s Lens tool, which allows customers to find similar items from its database by searching through their cameras, is being heavily integrated in the shopping space. It recently launched a partnership with Target on that basis, similarly starting with a registry experience.
“This Pinterest partnership quite literally helps us shorten the distance from when our guests have an idea to when they’re ready to make a purchase,” said Rick Gomez, chief marketing officer at Target, at launch. “It’s another way we’re making it easy and fun for our guests to explore and find new products.”
Ultimately the goal, said Huet of Woolworths South Africa, is for automation in retail processes to do just this: allow more frictionless shopping, as well as a level of personalised experience so consumers can spend more time doing (and finding) what they really want.
AI in its various forms, is helping shopkeepers move this forward. “Just look at this conference; AI is already here,” said Pittman of eBay. “I say embrace it. And then go build something great.”