Rebecca Gibson |
Just a few decades ago, almost everyone shopped at local stores where merchants greeted them by name, helped them to find products and knew how best to meet their individual needs. In the 1980s and 1990s, direct mail catalogues became a popular way for retailers to market their products to target audiences and enable consumers to shop for goods without leaving their homes. Today, many customers shop via a combination of physical and online stores. However, one thing has remained the same throughout the decades; customers have always expected retailers to provide a personalised service at all times.
“Consumers want brands to understand and value them as individuals and deliver products, services and experiences that cater to their specific needs,” says Michael Klein, director of industry strategy and marketing at Adobe. “Such personalised experiences make the end-to-end shopping journey quicker and more convenient and enjoyable. However, delivering these types of experiences has become increasingly difficult with the rise of online shopping and the growing number of customer touchpoints.
“In the past, retailers were delivering personalisation to a relatively small customer base, now they’re trying to offer it to thousands – and sometimes millions – of people at a global scale across both physical and digital channels.”
Over the past few years, retailers have been experimenting with different strategies to overcome these challenges, largely taking a ‘crawl, walk, run’ approach.
“At the crawl stage, retailers focused on being able to identify new and returning customers and by the walk phase, they’d progressed to factoring in historical customer data and additional contextual information such as geographic location and age demographics,” says Klein. “This enabled them to tailor certain aspects of the customer experience to individuals. Now, high-performing retailers are entering the run phase and aiming to offer real-time personalisation at scale to every customer at every stage of the shopping journey via every channel. Their ultimate goal is to provide customers with personalised products and services before they even know they need or want them.”
To achieve this objective, Klein recommends that retailers leverage artificial intelligence, machine learning, analytics and other personalisation technologies. “Retailers need to be able to merge data from multiple sources, analyse it rapidly and use these insights to assemble relevant content that can be delivered in real time at the customer’s point of need,” he says. “Our solutions, which are available on and integrated with Microsoft’s technologies, help them to do just that.”
In summer 2020, for example, retail and wholesale pharmacy corporation Walgreens Boots Alliance (WBA) adopted Adobe and Microsoft solutions to create a more personalised omnichannel experience for over 120 million customers in the UK and USA. WBA implemented Microsoft Azure, Dynamics 365 and Power Platform, as well as the Adobe Experience Cloud.
“Our solutions empowered WBA to better understand and segment customers, customise communications and personalise all pharmacy and retail transactions via every channel,” says Klein. “For instance, Walgreens has updated the myWalgreens customer experience platform to offer a rapid order and collection service, a 24/7 live chat tool where pharmacists provide personalised health advice, and much more. It has also launched a portal to enable US-based customers to book Covid-19 vaccinations.”
In the first quarter of 2021, Walgreens reported that 155 basis points-of-sale increases were driven by its mass personalisation efforts. In addition, its overall digital traffic had grown by more than 50 per cent year on year.
“WBA’s success and various studies show that customer retention and satisfaction rates are higher when brands offer customised experiences and services, so it’s clear that personalisation at mass scale works,” says Klein. “Online retail has grown significantly since the onset of the pandemic – our research found that 9 per cent of US and 15 per cent of UK consumers made their first-ever online purchase and nearly 50 per cent made digital purchases in a new product category. Hence, there has never been a more opportune time to invest in personalisation at scale.”
However, for personalisation to work effectively, retailers must earn their customers’ trust by allowing them to control the experience.
“Customers – especially those in younger demographics – are willing to share data with brands, but only if they are transparent about what information they’re collecting and how they’ll use it to develop value-added services,” explains Klein. “They’re happy to receive offers for their favourite products or recommendations for items they may like, but they don’t want to be continually bombarded with adverts or mass-marketing emails for irrelevant products and services.”
“This does drive personalisation but people find it creepy when they’re shown adverts based on information that they haven’t explicitly shared with retailers, which can prompt them to shop elsewhere,” he cautions. “Instead, retailers should create preference centres where customers can choose what information to share and which types of experiences they are comfortable with. By implementing intelligent technologies from Microsoft and Adobe, they can easily tap into this first-party data to develop personalised experiences that significantly enhance the shopping experience while still respecting the consumer’s privacy.”
This article was originally published in the Summer 2021 issue of The Record. To get future issues delivered directly to your inbox, sign up for a free subscription.