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It's Not You, It's Me.

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Shoppers are breaking up with brands who fail
to provide a seamless, personalized experience.
Here’s what retailer marketers can do about it.

Published in: Marketing
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It's Not You, It's Me.

  1. 1. It’s not you. It’s me. It’s not you. It’s me. Shoppers are breaking up with brands who fail to provide a seamless, personalized experience. Here’s what retailer marketers can do about it. epsilon.com
  2. 2. It’s not you. It’s me. Contents The paradigm shift: from brand to customer 4 The materials for change: personas, shopper history and real-time decisioning 6 The Internet of Everything (IoE) defined 10 From personalization to hyper-relevance: how the IoE is writing the future of shopping 11 Avoiding the breakup: how to build trust with your customers 12 Conclusion 12 About Epsilon 13
  3. 3. It’s not you. It’s me. It’s true that you never get a second chance to make a first impression. The proof? Customers are breaking up with retail brands that can’t deliver on their evolving expectations. The tech-savvy generation and their time-pressured parents are rapidly adapting (and perhaps outpacing) retail brands. Customers are demanding a shopping experience that is intuitively seamless, fast, authentic and personalized. So how do you answer the increasing demands of your customers? The blended customer experience
  4. 4. It’s not you. It’s me. The customer experience has become the “final frontier” for retailers. It used to be all about the brand. But a lot has changed. Because of increasing customer expectations and falling store sales, retailers are learning that they have to make a big shift. It’s not about the retailer’s brand any longer. It’s all about the customer—and how the brand can create a shopping experience built on this new-found focus. Let’s face it. Most shoppers can find similar or better alternatives online. A large part of why they are coming to the store is for the experience itself. “Customers not only want, but expect a personalized experience. They expect retailers to know their preferences and interests. A recent Infosys study reported that 78 percent of consumers are more likely to be a repeat customer if a retailer provides them with targeted, personalized offers.” But the pendulum swings both ways. The CMO Council reported that more than half of North American consumers would consider breaking ties with retailers that do not provide offers that are relevant and personalized.1 So we’ve come to a place in time where retailers are forced to change their ways. The shift of focus must come away from the brand and, instead, highlight the customers’ expectations and needs at an individual level. Brands that succeed in this change will see increased loyalty and profit margins. But those that do not will be faced with a serious decline in sales and brand loyalty. 1 Trend report: Why Personalized Retail Is the Future of Brick-and-Mortar Stores, trafsys.com 2 Survey says shoppers want ‘more personal, less personalization’, retailcustomerexperience.com, May 29, 2014 The paradigm shift: from brand to customer Shoppers want a balance of technology and the physical 52%said shopping is “too impersonal” these days and they are concerned about the reliance on algorithms to dictate their purchases 57%worry that they’ll discover fewer new things if companies always show them exactly what they’re looking for 66%are looking to be inspired while shopping 71%would welcome interactive walls that enable shoppers to try on clothes without changing 65%said they were willing to share data if they could see the benefit 71%worry about the amount of information that online stores know about them 59%would be open to a store that is able to recognize them when they walk through the door
  5. 5. It’s not you. It’s me. Unless you’ve been hiding under a rock, you probably already know all of this. But the real question is: What do you do about it? How do you create an experience for each and every one of your shoppers that will make them feel that when they enter your brand’s store, they are entering their store? Today most retailers realize the power of personalization and the in-store experience. The problem is that they don’t know how to craft an experience that is unique, and they don’t have the information they need to get started. The relevancy criteria Forrester notes, more than ever, brands need to deliver relevant experiences. But what makes an experi- ence “relevant”? To comply, retailers need to ensure that their brand’s shopping experiences: • Meet customer needs. A highly relevant experience meets the content and functionality needs of a customer while satisfying the underlying emotional needs that trigger an interaction. • Feel personal. Consumers expect—and appreciate—personalized experiences. Truly personal expe- riences deliver relevant content and function based on explicit and implicit feedback about customer needs and preferences. • Deliver in the moment. Relevant experiences take into account a person’s current state—such as time of day and location—and deliver on situational needs, such as finding additional product information using a barcode scanner at the point of consideration.3 3 Forrester: 2012. Rogowski, R., Powers, S., Yakkundi, A. Contextualization.
  6. 6. It’s not you. It’s me. To get started along the journey of creating a shopping experience that is built around your customer, you will find that personas, your compiled shopper history and an organized real-time message engine are your keys to success. However, before you can cross these items off your to-do list, you need one very important thing—data. Data is the building block for creating shopper personas built in reality. Data that you store of your shoppers’ past transactions with your brand will provide critical information that will deliver a truly personal experience for them. And data will help you to make decisions about what message or offer your shopper should receive in any given moment. To be successful, you need to be sure that data is your foundation for all things moving forward and that your decisions are grounded in actionable insights. Personas: Going beyond segmentation Retailers have long used customer profiles as a representation of their marketing segments. Personas take these profiles beyond the basic demographic makeup of the customers. A well-developed persona incorporates the basic demographics with financial information (e.g., ability to pay, credit worthiness, net worth), interests and—perhaps most importantly— transactional behavior and categorical spend. True, it does take work (and often money) to create accurate shopper personas. But once this task is done, these can be powerful tools for getting marketers and store employees to understand and obsess about customer needs. With personas, your brand has a holistic view of who is shopping at your stores. To be successful, marketers have to use personas consistently. They should serve as a reference at every step of the design process so that it’s clear who they are designing the experience for. It’s also important to note, that building personas is not just a one-time job. Once you have created your personas, they should serve as living, breathing documents that need to be evaluated on a regular basis. If your customer base changes, then so should your personas. Measurement is crucial to ensure that the personas remain an effective guide. The materials for change: personas, shopper history and real-time decisioning
  7. 7. It’s not you. It’s me. Sample persona: chic society The households in this niche are very business and culturally oriented. These households are typically in their mid-50s, and they usually do not have children. There is extensive domestic business and foreign travel in this niche. These homeowners own residences that have an average value of about $317,000, and they have lived there for 15 to 20 years or more. They are more likely than the general population to have grandchildren. Chic Society households own many credit cards and have a known history of being mail responsive and purchasing items through the mail. Their discretionary spending includes purchases of general merchandise, magazines, kitchen accessories, specialty foods, and women’s apparel. The households in this niche are also more likely to donate to charitable causes, such as wildlife and environmental issues. They have a great interest in monetary investing. Household activities and interests include travel, including international trips, cruise ship vacations, cycling, and boating and sailing. Other interests include gardening and grandchildren. They are very health conscious regarding weight control, and they enjoy regular physical fitness, walking for health, and self-improvement. They are loyal online subscribers that are likely to use a Web portal such as AOL, Yahoo, or MSN. Chic Society households are affluent, and the vehicle ownership reflects their wealth. They are more likely than average to own luxury exotic makes, such as Lotus and Jaguar, as well as luxury full-size vehicles, such as the Cadillac XTS. They also have an above average likelihood to own new vehicles in very recent model years from 2010 forward. $168,592 Avg. HH income 54 Avg. age of head 16 Avg. length residence 12% have kids
  8. 8. It’s not you. It’s me. Shopper history: the more you know Personas are only one element of the personalized shopping experience. Shopper history is another. Capturing a customer’s history with your brand empowers you with hugely valuable information. What have they purchased in the past? What are their preferences? What are they buying with your competitors? Having the answer to these questions can make you a master of the retail universe. But, knowing them is not enough. You have to ensure that they are easy to access. How many databases are the answers to these questions stored in currently? Do your store associates have access to them? Are they fueling the messages that are being served on your ecommerce site? If your answer is no, then you have some work to do. It is one thing to capture this information—but the most important thing you can do is to be sure that it is readily available so you can use it at every step of your customers’ shopping journey. Real time: Making it happen in the moment that matters Now that you have created your personas and you can access your shopper history at any stage of your customers’ journey, you have one more very important thing to do. You need a real-time decisioning engine. Sound complicated? Well, in a way, it is. But you already have most of your legwork done with your personas and your shopper history database. Now it’s time to map all of the possible journeys your shoppers may take and think about their experiences. At every step, what offer would be relevant to them in that moment? This exploration takes time and a lot of thought. But in this mapping process, you’re actually creating a database of offers and messages for your customers that will make their shopping experience feel personal and relevant. After all, that’s the goal, right? 4 Forrester: Contextualization by Ron Rogowski, Stephen powers, and Anjali Yakkundi, November 19, 2012
  9. 9. It’s not you. It’s me. 5 Forrester: Advance to Next-Generation Personalization. By Anjali Yakkundi and Ron Rogowski, January 31, 2014 Bringing it together: Joining the elements of your new shopping experience Forrester notes, “Combining the user-archetype information that personas contain with an individual’s history, preferences and current environment can help companies engineer experiences that feel like they were designed for a specific user, even if they were not.”4 In essence, this is the secret formula. It’s not possible to make every experience individually and uniquely personal to a single customer. But if you can combine the persona + shopper history + real-time decisioning engine, you will be delivering on an experience that feels custom fit for your shoppers. Your customers don’t have patience for you to figure it out. They just want an intuitive experience that feels as if it was authentically created with them in mind. Shoppers’ expectations of instant gratification aren’t changing. If you can deliver on their expectations, you’ll reap the marketshare of the brands that are not. It’s a lot to tackle if you haven’t already started. Remember, you don’t have to climb the mountain in one attempt. Focus on one aspect of your customer experience and use it as a beta project. Then build upon your customer experience from there. According to Forrester, “Organizations that have failed in personalization initiatives often tried to do too much at once. Instead, successful organizations we spoke to avoided these pitfalls in new contextualization initiatives by starting small and adding a personal touch for certain experiences before ramping up to large personalization initiatives.” Persona Shopper history Real-time decisioning Custom shopping experience + + =
  10. 10. It’s not you. It’s me. The Internet of Everything (IoE) defined Most people are now familiar with the Internet of Things (IoT). The Oxford Dictionary defines the IoT as “a proposed development of the Internet in which everyday objects have network connectivity, allowing them to send and receive data.”6 So how does the IoT differ from the IoE? According to Dave Evans, Chief Futurist at Cisco, “The Internet of Things is just one of four dimensions…The IoE is built on the connections among people, processes, data and things. However it is not about these four dimensions in isolation. Each amplifies the capabilities of the other three. It is in the intersection of all of these elements that the true power of IoE is realized.”7 The blended customer experience 6 Internet of Things, wikipedia.com 7 Beyond Things: The Internet of Everything, Explained In Four Dimensions, Dave Evans, Huffington Post, September 2013
  11. 11. It’s not you. It’s me. Your shoppers are seeking innovations to make shopping easier; citing convenience and efficiency as key factors of importance. The experience is continuing to evolve with the IoE. “Hyper-relevance delivers value—such as greater savings, efficiency or engagement—in real time throughout the shopping lifecycle, using analytics to determine the experience that best suits the customer’s context (where he is, what she is looking to accomplish in the moment).”8 According to Cisco Consulting Services’ retail study, there are three key value drivers that hold consumers’ interest in IoE-enabled solutions.9 To be effective in meeting increasing customer expectations for hyper-relevance, retail marketers have to be innovative. Ask yourself, how can I make the shopping experience easier for my consumers? Can I make the checkout faster or easier? How can I ensure I have what they’re looking for in stock when and where they need it? How can I expedite delivery if I don’t? Can I help them to find what they’re looking for through peer reviews or product recommendations? These questions should already come up as you’re building out your ideal customer shopping experience. With the IoE comes new possibilities—the technology with which you can fulfil these wish-list expectations. You can use this new toolkit to create a shopping experience for your customers that is truly special and hyper-relevant to their needs. Retailers cannot change the fact that the power has shifted to the consumers—new tools and technology will certainly continue to fuel this transformation. But by creating a digital experience for your customers that is built around them, your brand can become differentiated, innovative and integrated to their lifestyle.10 From personalization to hyper-relevance: how the IoE is writing the future of shopping The Internet of Everything (IoE) is changing shopping behavior Consumer interest in IoE-enabled solutions 3 key value drivers Savings General in-store offers (digital signage) Special offers (augmented reality) Targeted offers (digital signage) 1 Efficiency Checkout optimization In-store guidance (digital signage) In-store guidance (augmented reality) Scan-and-play (smartphone) Drive-thru pickup Same-day delivery 2 Engagement Reviews (augmented reality) In-store advertising Product recommender (augmented reality) 3 8 Survey: Consumers want Internet of Everything-enabled retail experiences, by Katherine Boccaccio, January 12, 2015 9 Ibid. 10 Retailing 2015: New Frontiers 2007PricewaterhouseCoopers/TNS Retail Forward 21
  12. 12. It’s not you. It’s me. Just as in real-life relationships, your consumers are looking for authentic relationships with the brands and products that they buy. The evolving digital landscape has created competition and endless shopping opportunities. With all of these endless options, consumers want to be inspired. However, through all this evolution, the premise of buying and selling goods hasn’t fundamentally changed. The old adage “Nothing happens until someone decides to purchase something” still applies. The difference is that now shoppers are more equipped to demand an intelligent, transparent, unique and meaningful experience with the brand of their choice. They have more choices than they ever did before when selecting a brand to have a relationship with. Where the brand used to hold the power, now it is the consumer with all the power of choice. To be successful, you need to be strategically prepared to set your brand apart from the competition. To do this, you need to know your customer in a way that feels unconsciously unique and authentic. In the end, this is what will inspire trust for your shoppers. It’s that trust that will kindle a loyal relationship with your brand. Conclusion Today the customer is in control. They decide if, when and how to interact with their favorite retail brands. With all the channels of interaction available to the consumer, retailers need the ability to develop well-grounded engagement strategies to maximize the customer experience every minute of every day. As a new breed of marketing partner for this customer-empowered world, our approach harnesses the power of rich data, world-leading technologies, engaging creativity and transformative ideas to connect customers to brands and deliver dramatic results. Customers today have many options. We can help you create meaningful customer connections, resulting in increased revenue, more frequent engagement and more efficient marketing spend. Avoiding the breakup: how to build trust with your customers
  13. 13. It’s not you. It’s me. Want to understand how to take the first next step in your digital landscape? Let us help. Epsilon is the global leader in creating connections between people and brands. An all-encompassing global marketing company, we harness the power of rich data, groundbreaking technologies, engaging creative and transformative ideas to get the results our clients require. Recognized by Ad Age as the #1 World CRM/Direct Marketing Network, #1 U.S. Digital-Agency Network and #1 U.S. Agency from All Disciplines, Epsilon employs over 7,000 associates in 70 offices worldwide. Epsilon is an Alliance Data company. For more information, visit epsilon.com, follow us on Twitter @EpsilonMktg or call 800 309 0505. For more industry news and insights, subscribe to A Brand New View. epsilon.com Copyright©Epsilon2015EpsilonDataManagement,LLC.Allrightsreserved.

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