Our Near Futures Series of inspiration and insights reports is designed to highlight what is happening today and how it can shape tomorrow for brands and business. This one is on the Near Future of Personalization.
"Nowadays, consumers are overwhelmed with the available choice and the stream of messages being directed at them. In order to stand out and be useful, brands need to acknowledge and adapt to the needs of their consumers.
Personalization means adapting their products and services around the preferences and behaviours of the consumer to suit their real-life needs. Successful brands are designing customer relationships— before, during and after the purchasing process.
This report depicts changing consumption patterns that are no longer defined by traditional boundaries, drivers behind the need for personalised offers that reflect consumer behaviour, as well as ways of maintaining the ongoing and long-term relationship with consumers that are based on personalization."
1. UNDERSTAND TODAY. SHAPE TOMORROW. 1
WHAT I WANT.
HOW I WANT IT.
LHBS // THE NEAR FUTURE OF PERSONALIZATION
The Near Future of Personalization
Q3 2015
2. ABOUT.
At LHBS, we are curious about the brand opportunities that lie at the
crossroads of emerging consumer needs, enabling technology and
market dynamics. What we learn, we like to share. That’s why we’ve
created the Near Future Series of inspiration and insights reports
designed to highlight what is happening today and how it can shape
tomorrow for brands and business.
This one is about The Near Future of Personalization.
We hope you enjoy this deck and are able to be inspired by it in your
innovation process.
This report is powered by the LHBS Inspiration-Hub that
systematically tracks changes in culture, markets and technology and
how these signs collectively point to a bigger story.
INTRODUCTION
UNDERSTAND TODAY. SHAPE TOMORROW. 2
Discover Define Develop Deliver
UNDERSTAND TODAY. SHAPE TOMORROW.
LHBS // THE NEAR FUTURE OF PERSONALIZATION
3. UNDERSTAND TODAY. SHAPE TOMORROW.
INTRO
DUCTION.
Personalization means adapting their products and services around
the preferences and behaviours of the consumer to suit their real-
life needs. Successful brands are designing customer relationships—
before, during and after the purchasing process.
This report depicts changing consumption patterns that are no
longer defined by traditional boundaries, drivers behind the need
for personalized offers that reflect consumer behaviour, as well as
ways of maintaining the ongoing and long-term relationships with
consumers that are based on personalization.
INTRODUCTION
3
Nowadays, consumers are overwhelmed with the available choice
and the stream of messages being directed at them. In order to
stand out and be useful, brands need to acknowledge and adapt to
the needs of their consumers.
LHBS // THE NEAR FUTURE OF PERSONALIZATION
Joanna Bakas
Co-founder & Managing Partner at LHBS
lhbs.com | jb@lhbs.com
4. INTRODUCTION
UNDERSTAND TODAY. SHAPE TOMORROW. 4
PERSONALIZATION
WHAT
Creating experiences tailored to that
particular individual that exist at a service,
data or content delivery level.
WHY
Creates a stronger user experience by
anticipating their needs upfront, making
everything “just right” for customers, without
them having to set it up.
LHBS // THE NEAR FUTURE OF PERSONALIZATION
5. 40%
60%
UNDERSTAND TODAY. SHAPE TOMORROW.*Source:
94%
6%
5
6%
UNDERSTAND TODAY. SHAPE TOMORROW.Source: Microsoft
but only 6% have a plan in place to
actually use it
4%
96%
96%
96% of retailers believe personalization
makes good business sense
INTRODUCTIONLHBS // THE NEAR FUTURE OF PERSONALIZATION
6. UNDERSTAND TODAY. SHAPE TOMORROW.
personalized
SOLUTIONS
personalization
TOOL KITS
pin point
TARGETING
CONTENT
6
CONTENT
LHBS // THE NEAR FUTURE OF PERSONALIZATION
8. UNDERSTAND TODAY. SHAPE TOMORROW.
Our connection to the world through our devices will increase,
and as a result make more data available while enabling
personalization on any connected device at the same time.
But consumers will give over data only in exchange for real value
that they can get in return.
Personalized experiences that are powered with consumer data
allow for greater customer intimacy— online or at POS— and
being able to know the wants of the consumer before they realise
what they want. In addition, brands are able to drive sales by
increasing the cross-selling potential, through suggesting based
on past, similar, complimentary or recently viewed items.
The balance lies in the fine line between intrusive, almost creepy
pin point targeting vs. data and behaviour based targeting that
delivers real value.
TREND OVERVIEW // PIN POINT TARGETING
8
pin point
TARGETING
Demographics based on age, gender, location, income and lifestyle
are no longer viewed as reflecting real needs of consumers.
30% of Amazon’s revenue is attributable to sales based on personal
recommendations. 70% of Netflix views are triggered by personalized
rankings and recommendations.
LHBS // THE NEAR FUTURE OF PERSONALIZATION
9. 40%
60%
UNDERSTAND TODAY. SHAPE TOMORROW.*Source:
1%
99%
9
99%
Number of consumers
that will share personal
info for rewards.
However, they still
want brands to ask for
permission.
WHY IT MATTERS // PIN POINT TARGETING
Source: Microsoft
The Consumer Data Value Exchange
UNDERSTAND TODAY. SHAPE TOMORROW.
LHBS // THE NEAR FUTURE OF PERSONALIZATION
10. 40%
60%
UNDERSTAND TODAY. SHAPE TOMORROW.*Source: 10
While millennial consumers are relatively comfortable
providing personal information, context is key.
Customers expect reciprocity in the form of high-quality
recommendations and relevant offers, and don’t want to
be targeted in a way that they find “creepy.”
UNDERSTAND TODAY. SHAPE TOMORROW.
WHY IT MATTERS // PIN POINT TARGETINGLHBS // THE NEAR FUTURE OF PERSONALIZATION
11. 40%
60%
UNDERSTAND TODAY. SHAPE TOMORROW.*Source: 11UNDERSTAND TODAY. SHAPE TOMORROW.
WHY IT MATTERS // PIN POINT TARGETING
“I like when a company
makes recommendations
that make shopping
easier”
“I would give more
data to businesses
if it meant avoiding
irrelevant offers.”
“I have no issue with
companies using my
data to improve
my experience.”
“I don’t like when
companies use
personal data to
target offers at me.”
“It creeps me out
when I receive
offers in social media
for things I searched.”
“It creeps me out
when a company
knows what I want
before I’ve told them.”
49% 44%
44%
48% 46%
47%
Source: L2 Report on Personalization
LHBS // THE NEAR FUTURE OF PERSONALIZATION
12. UNDERSTAND TODAY. SHAPE TOMORROW.
REPORT TITLE // IMPLICATIONS.
UNDERSTAND TODAY. SHAPE TOMORROW. 12
Sephora Personal
Targeting While
Shopping
Pin point targeting in-store ads to business and
customer value
A bit of new technology is turning up inside Sephora
stores nationwide in the USA is called Beacons.
When you're in a store with your smartphone, open
the Sephora to Go app, and you'll see special
promotions, birthday month benefits, and get a
reminded to take advantage of in-store services like
mini-makeovers. You'll have to opt-in to this tech,
which surprisingly, most everyone does. When
Sephora took Beacons on a trial run in a few San
Francisco stores, more than 80% of Sephora
shoppers wanted in.
Learning
Consumers appreciate value in exchange for access and
data.
Source: Internet Advertising Bureau
SIGNS // PIN POINT TARGETINGLHBS // THE NEAR FUTURE OF PERSONALISATIONLHBS // THE NEAR FUTURE OF PERSONALIZATION
13. UNDERSTAND TODAY. SHAPE TOMORROW.
Seamless Use of Data
Netflix program and title tiles line up based on viewer
preferences based on previously watched items. The
items in the rows (or carousels as they are called) are
ranked based on personal data as are the rows
themselves. To continue watching an episode, series or
film, the system automatically starts where the viewer
last left off. It’s personalization that is barely noticed.
Learning
It’s not about “hunting” consumers down, it’s understanding
their behaviour in order to better meet their needs.
Opt In Targeting
One of the top apps in Apple and Android app stores is
RetailMeNot. Users sign-up for coupons and promos from their
favourite retailers via the app and choose to receive
communications via push notification and email. RetailMeNot is
one of few retail apps that successfully offers a preference wall
for users to manage notifications, including nearby alerts based
on geo-location, featured coupons and special sales.
Learning
Behavioural targeting not only makes business sense but is a
favourite for consumers.
Learning
Targeting that allows consumers to opt in is not only
accepted but appreciated.
13
Movers are an important segment for broadcast service
providers, as customers in a new home or apartment are
ripe for acquisition. Using a third-party data partner,
DirecTV is able to identify consumers who have or are
about to move. These customers receive personalised
content related to moving on the DirecTV desktop and
mobile site, driving double-digit conversion lift.
The Right Place at the Right Time
SIGNS // PIN POINT TARGETINGLHBS // THE NEAR FUTURE OF PERSONALIZATION
14. UNDERSTAND TODAY. SHAPE TOMORROW.
IMPLICATION
Personalised targeting should be
based on analysing and
understanding the customer’s
needs.
The new way to target efficiently, is to look at actual behaviours, patterns and needs. Collect data and
analyse it for patterns that create an accurate image of a real consumer need. Just finding them and
tracking them down is not enough and can result in a negative experience.
14
LHBS // THE NEAR FUTURE OF PERSONALIZATION IMPLICATIONS // PIN POINT TARGETING
15. UNDERSTAND TODAY. SHAPE TOMORROW.
IMPLICATION
Consumers are happy to share their
personal data, but only if they get
something in return.
Brands should be transparent on which data is collected & when, and offer easy “opt outs”. They should also be
clear in communicating why do they need the personal data and the privacy of all their details.
15
IMPLICATIONS // PIN POINT TARGETINGLHBS // THE NEAR FUTURE OF PERSONALIZATION
17. UNDERSTAND TODAY. SHAPE TOMORROW.
True personalization is when consumers elect a preference and
build products and services around their needs.
Brands are taking personalization a big step forward into mass
personalization. They are discovering that they can elevate
customer loyalty and engagement—and use their customer base
as an engine of advocacy to potential buyers.
Equally, personalization helps companies differentiate their
products from those of their competitors at a time when the
Internet is rapidly making it easier for customers to compare the
prices of products with standard features.
Making it personal may just pay off. According to Deloitte, one in
three consumers wants personalized products.
TREND OVERVIEW // PERSONALIZED SOLUTIONS
17
personalized
SOLUTIONS
With overwhelming choice available anywhere and at any time,
it is becoming increasingly difficult and time-consuming for
customers to move efficiently throughout the purchase journey.
Personalization is a strategy that brings an added value to consumers
— saves time, stress and the possibility of an unsuitable decision.
Source: Deloitte Personalization Survey
LHBS // THE NEAR FUTURE OF PERSONALIZATION
18. 40%
60%
UNDERSTAND TODAY. SHAPE TOMORROW.*Source:
34%
66%
18
66%
Percentage of global
consumers that switched
brands due to poor
customer service that came
from not knowing what
they need and want.
WHY IT MATTERS // PERSONALIZED SOLUTIONS
Source: Trendwatching
The Future Of Customer Service Study
UNDERSTAND TODAY. SHAPE TOMORROW.
LHBS // THE NEAR FUTURE OF PERSONALIZATION
19. UNDERSTAND TODAY. SHAPE TOMORROW.
REPORT TITLE // IMPLICATIONS.
UNDERSTAND TODAY. SHAPE TOMORROW. 19
IOMA Creates Unique
Skin Care Solution
One size no longer has to fit all
IOMA uses microelectromechanical systems, which
are commonly called MEMS, to take such accurate
analyses of the skin. For IOMA’s latest launch, the
Bespoke Youth Rituals, a tool that looks like a remote
control measures seven aspects of customers’ skin:
moisture, water loss, bacterial activity, UV damage,
pigment spots, redness and wrinkles.The results— on
a scale of 0 to 18— show the counter person how
many drops of each active ingredient to put in the
customer’s day and night creams. It’s rare two people
leave with the same products.
Learning
Though more complex and resource intensive,
personalised solutions resonate with consumers, who are
often willing to access them at a premium price.
Source: Internet Advertising Bureau
LHBS // THE NEAR FUTURE OF PERSONALISATION SIGNS // PERSONALIZED SOLUTIONSLHBS // THE NEAR FUTURE OF PERSONALIZATION
20. UNDERSTAND TODAY. SHAPE TOMORROW. 20
Personalised &
Evolving Playlist
Weekly curated musical “mix-tape” from Spotify
The playlists are tailored specifically to users based
on their music taste from the previous week and are
intended to make users feel like their best friends
made them a personalised mixtape every single
week. As user’s taste evolves, Discover Weekly will
keep up.
Explore Sign
Learning
The playlist are an example how brands can
continuously nourish a relationship with consumers by
turning an overwhelming amount of information into a
curated playlist that evolves every week to reflect
changing tastes of the listeners.
LHBS // THE NEAR FUTURE OF PERSONALIZATION SIGNS // PERSONALIZED SOLUTIONS
21. UNDERSTAND TODAY. SHAPE TOMORROW. 21Source:
Ad Plot Changes Based
on Your Preference
Viewer sees an ad that is relevant to their
interests, music and consumption choices
New Axe ads can show up to 25,000 mutations of the
same story for a grand total of 100,000 outcomes.
The stories are distributed based on interests like
music, brands, or other consumption preferences,
producing the four distinct groups: "Artsy," "Fresh,"
"Naturals" and “Roots.” The degree of customization
varies and will be further optimised based on
responses.
Explore Sign
Learning
Personalised solutions offer new brand experiences not
only in terms of products but also communication
especially when enabled by data.
SIGNS // PERSONALIZED SOLUTIONSLHBS // THE NEAR FUTURE OF PERSONALIZATION
22. UNDERSTAND TODAY. SHAPE TOMORROW.
Learning
Rather than standardised solutions, a personalized service
can make the difference between an ordinary or a memorable
experience.
Hotel Room Always Like You Left It Personalized Beauty
22
Learning
Technology is a great and scalable enabler in delivering truly
personalized experiences which have the capability to offer
truly differentiated service offers.
L’Oréal Paris has launched a beauty app called Makeup
Genius where users can “try on” products virtually. The
app uses advanced facial mapping technology and has
over 11 million downloads. The company is now bringing
out versions for hair colour, hair styling and skincare.
Explore Sign
Learning
Personalization can be playful, fun while addressing functional
needs as well as emotional ones e.g. my face is unique.
By connecting Facebook accounts upon booking, the
TAM airlines accessed customers’ feeds, liked pages and
profile pictures, to create 100% personalized “Ownboard
Magazine” including only content that customers are
sure to be interested in.
100% Personalized Magazine
Explore Sign
SIGNS // PERSONALIZED SOLUTIONSLHBS // THE NEAR FUTURE OF PERSONALIZATION
With the Hub by Premier Inn app, guests are able to pre-
select the temperature and light in the room, not only
book in and check in. They will also be able to choose TV
or radio channel they want to listen to when they arrive
or stream content from their own device.
Explore Sign
23. UNDERSTAND TODAY. SHAPE TOMORROW.
IMPLICATION
Personalization in products and
services works to build more effective
customer relationships.
Technology & data has made mass personalization effective and scalable. Brands can and should invest resources
in creating solutions for people that they need, as they need them and when they need them– as added services, as
well as innovation.
23
IMPLICATIONS // PERSONALIZED SOLUTIONSLHBS // THE NEAR FUTURE OF PERSONALIZATION
25. UNDERSTAND TODAY. SHAPE TOMORROW.
Product personalization helps brands boost sales on their own
websites or gain share on a retailer’s site.
A Bain survey of more than 1,000 online shoppers in the USA
found that while less than 10% have tried personalization options,
25% to 30% are interested in doing so.
Beyond the pure size of the opportunity, the survey showed that
those customers who had personalized a product online engaged
more with the company. They visited its website more frequently,
stayed on the page longer and were more loyal to the brand.
As more retailers and brands give their customers the design-it-
yourself option, they should see a boost in profitable revenues,
stay connected to their best customers.
TREND OVERVIEW // PERSONALIZTAION TOOL KITS
25
Personalization
TOOL KITS
One of the consequences of the digital world that we have all come
to embrace, is the level of personalization it affords us. From websites
remembering our purchasing history to the serving of ads that reflect
our browsing. Our expectations have been raised.
Source: Baine Personalisation Survey
LHBS // THE NEAR FUTURE OF PERSONALIZATION
26. 40%
60%
UNDERSTAND TODAY. SHAPE TOMORROW.*Source: 26
If 25% of online sales of
footwear were personalized,
that would equate to a market
of…
UNDERSTAND TODAY. SHAPE TOMORROW.Source: Baine Personalisation Survey
$2 billion
per year.
WHY IT MATTERS // PERSONALIZATION TOOL KITSLHBS // THE NEAR FUTURE OF PERSONALIZATION
27. UNDERSTAND TODAY. SHAPE TOMORROW. 27Source:
Personalized 3D
Printed Cosmetics
MINK not only allows personalization in design,
but also production.
3D printing is all the rage these days. The Mink
printer allows consumers to create perfectly
personalized cosmetics based on any colour they like
or see.
The little printer lets users choose any colour on the
web, or in the real world, and using simple already-
existing software, print that colour into a blush, eye
shadow, lip gloss or any other type of makeup.
Learning
As technology progresses, consumers will not only be
able to co-create in design but also production, taking
personalization to a new level.
SIGNS // PERSONALIZATION TOOL KITSLHBS // THE NEAR FUTURE OF PERSONALIZATION
28. UNDERSTAND TODAY. SHAPE TOMORROW.
Blending vs. Buying
With Whiskey Blender, it’s now possible for anyone to
design and drink their very own custom bottle of Scotch.
Blenders name their bottles and have the chance to be
name Master Blenders. Whisky Blender is as much about
the story and serving your own whisky; it's an extra layer
for the consumer and a differentiating feature.
Learning
Personalization is even more engaging and interesting in high
interest, highly emotional product categories or services.
Build A Unique Bike
Now with Trek, avid bikers don’t have to settle for
anyone else’s bike. They can create their very own with
Project One– Trek’s custom bike programme. Customize,
personalize, sensationalize: the choice is the rider’s. Just
select the model, fit, styling and components you desire,
and we’ll build the dream bike.
Co-Design Your Running Shoe
NIKE iD offers a great customer experience and product.
Their online community has recently reached 15 million
people. Since launching the personalized shoe, Nike’s
market share has grown from 48-61%. The most
interesting fact is that that NIKE iD now is 20% of store
revenue.
Learning
Personalization is especially important for “fan” groups who
share a string passions and interests.
Learning
Personalization can significantly contribute to the bottom
line and generate incremental customers.
28
SIGNS // PERSONALIZATION TOOL KITSLHBS // THE NEAR FUTURE OF PERSONALIZATION
29. UNDERSTAND TODAY. SHAPE TOMORROW.
IMPLICATION
Keep it simple.
Make the personalization co-creation experience as simple as possible for customers. The more complex the
process, the more barriers it will create and less buy in and participation.
29
IMPLICATIONS // PERSONALIZATION TOOL KITSLHBS // THE NEAR FUTURE OF PERSONALIZATION
30. UNDERSTAND TODAY. SHAPE TOMORROW.
IMPLICATION
Make it fun.
Customer engagement will come from a fun, interesting and playful experience. Keep it lighthearted and enjoyable
rather than purely functional.
30
IMPLICATIONS // PERSONALIZATION TOOL KITSLHBS // THE NEAR FUTURE OF PERSONALIZATION
31. UNDERSTAND TODAY. SHAPE TOMORROW.
IMPLICATION
Consider the category.
Not all product categories are ideal for co-created personalization. Generally, lifestyle and fashion brands have the
most potential because they’re inherent and more high interest categories.
31
IMPLICATIONS // PERSONALIZATION TOOL KITSLHBS // THE NEAR FUTURE OF PERSONALIZATION
32. LHBS Put the Title of the Report here
HUB.
UNDERSTAND TODAY. SHAPE TOMORROW. 32
https://inspiration-hub.com/
INSPIRATION-HUB
INSPIRATION
-HUB
Our Inspiration-Hub systematically tracks changes in culture,
markets and technology and how these changes collectively point to
a bigger story that carries implications for Business Development,
Brand Building and Customer Experience. To apply much of this
learning to specific and actionable ideas, contact up for a
workshop.
33. UNDERSTAND TODAY. SHAPE TOMORROW.
Discover
ABOUT
LHBS. Define Develop Deliver
We are an unconventional strategy firm that helps clients to
better understand today and successfully shape tomorrow. LHBS
has extensive experience & expertise in business development,
brand building and customer experience. The firm works across all
major industries for clients from the FT Global 500, German
Mittelstand and fast growing startups.
http://www.lhbs.com
ABOUT
UNDERSTAND TODAY. SHAPE TOMORROW. 33
34. Die in dieser Präsentation dokumentierten Gedanken und Vorschläge sind geistiges Eigentum der
LHBS Consulting Berlin GmbH und unterliegen den geltenden Urhebergesetzen. Die unauthorisierte Nutzung,
die ganze oder teilweise Vervielfältigung sowie jede Weitergabe an Dritte ist nicht gestattet.
LHBS Consulting Berlin GmbH
Köpenicker Straße 154
10997 Berlin Germany
UNDERSTAND TODAY. SHAPE TOMORROW.
IMPRINT
www.lhbs.com
THANK YOU
34