The hyper-personalization of the customer experience in retail: building loyalty and fostering growth
Hyper-personalization is one of the most popular digital marketing trends and one of the main objectives for most organizations. In fact, a Forrester study commissioned by Adobe found that 75% of customer experience leaders are expanding existing personalization at scale and 80% of surveyed companies rate personalization as critical to business growth.
And it’s no surprise. With an overly saturated market, retaining customers has never been more challenging due to intense competition and the need to capture and retain attention in an era where people have the shortest attention spans on record. Now more than ever companies need to listen to their clients, understand their needs and feelings throughout their retail experience. Only then can businesses understand how to leverage hyper-personalization by making it a strategic part of their concept-to-product and delivery processes.
While hyper-personalization is crucial for successful marketing campaigns and capturing consumer attention, it is not just limited to marketing. A truly hyper-personalized experience management approach is necessary if companies aim to interact, listen, and understand your customers’ sentiment and experiences across all channels.
Having a clear strategy is essential, but only with the right technology can you make it a reality and have a significant impact. To benefit from hyper-personalization, businesses need technology that enables you to scale your impact.
So, which are the main benefits of hyper-personalization?
Is it worth the investment?
Standard personalization makes use of information such as the customer’s name, location, or purchase history. Hyper-personalization goes much further and takes advantage of other factors such as purchasing patterns and various customer behavior data, which allow a deeper understanding of what they are looking for. It implies tracking and enhancing each moment of the relationship with the customer across all channels, in order to create unique experiences and stay ahead of the competition.
It’s essential that businesses listen to customers’ evolving needs and preferences in real-time, so they can offer products, brands, and services that truly matter. This, in turn, translates into increased customer loyalty.
When considering the use of hyper-personalization two things must be taken into account: on the one hand, that it can give a company a great competitive advantage and, on the other, that without the necessary technology and knowledge, it’s impossible to implement it. At NTT DATA, we have no doubt that the benefits justify the investment.
As some studies show, the use of hyper-personalization strategies yields higher income and conversion rates. According to the Boston Consulting Group (BCG) Personalization Maturity Index report, marketers using hyper-personalization have seen their revenue grow by 25%.
How hyper-personalization is already showing results in other sectors
Other industries like the entertainment sector, make great use of hyper-personalization. Netflix, for example, not only recommends series and movies that may interest users based on viewing preferences, but it leverages personalization much further. For example, Netflix customizes the movie and series covers to the preferences, patterns and tastes of each consumer. In the case of Pulp Fiction, the thumbnail that appears on the service’s interface will show John Travolta under the title of the film if users have recently seen content starring the actor and Uma Thurman, if they’ve recently viewed movies where the actrice is the protagonist.
Offering a personalized customer experience is both a trend and a necessity. However, many companies claiming to embrace hyper-personalization still segment customers based on traditional models and patterns tied to their interaction with the brand. Without integrating technological solutions that allow companies to factor in other indicators that contribute to building a successful relationship model, such as customer feelings or knowledge, real hyper-personalization can’t be done. In this sense, the United States is at the forefront of hyper-customization, because of the volume of investments made in advanced technologies such as artificial intelligence (AI), machine learning or data analysis.
Keys to real hyper-personalization
Designing a highly personalized shopping experience and implementing the technology that enables it is not an easy task, and there are certain steps or solutions that are essential to achieve it. This is the case, for example, with Qualtrics’ XM Discover, which helps companies gain insights and act on their customer experiences.
Such advanced tools help companies collect in-depth information about the customer, measure the perception around the brand and gather data that will deep-dive into the decision-making process before each purchase. Companies can then understand expectations and be more successful in meeting them. AI and other advanced technologies allow retailers to analyze data and react in real-time on a large scale. It’s also important to define clear objectives when implementing solutions that collect data because not all data points are equally important.
There are many ways to gather customer insights and to deliver the right, personalized content without saturating people with inputs. Through omnichannel listening that includes social networks and other platforms, businesses will be able to discover trends and behaviors that can help them redefine their strategy while aligning customer experience objectives with the KPIs of the company.
Transitioning towards a “phygital” model
We live in a time when the physical reality has stopped being disconnected from the digital one. By introducing a phygital model, retailers can integrate both environments and generate a complete omnichannel shopping experience that is hyper-personalized for the consumer.
Cutting-edge technologies like AI and machine learning play a key role in language processing but technology can’t be used to its fullest potential without the involvement of employees and their efficiency in communicating the needs and experiences of customers within the company. It is essential that the professionals of a company take an active part in feeding the data and attaining all the capabilities and elements needed for a hyper-personalized experience. At NTT DATA we are committed to delivering a true phygital experience: a fusion of the physical and the digital, with a 360-degree approach that encompasses the entire process.
This way, it is easier to combine the internal data of the company (transactions, segments, operations, logistics, distribution, suppliers) with external data (customer feedback, surveys, reviews, calls, comments on networks, activity). Taking all this data into account, we are able to analyze and identify the key points of the customer experience, and only then can a hyper-personalization strategy be put in place where customers’ needs are satisfied successfully, ensuring they continue choosing us and not the competition.
Sandra Valtierra, Customer Engagement Manager