The concept of “knowing the individual customer” is not a product of the 21st century and the many customer-tracking tools we can use today. Being a regular customer of a skilled salesperson meant that they knew you, your shopping habits, and your needs. You would get personal recommendations and a host of small perks that would boost your shopping experience in slight, but still enjoyable ways. Of course, this type of personalization was not a possibility in all industries. It might have worked in the grocery shop you visited every day. In shops you would frequent once or twice a year, you would be a like a new customer every time you visit.
Now we have tools that help us replicate that type of experience even in businesses and industries where previously it was not an option. Businesses that operate without a personal contact with their customers — the majority of e-commerce businesses — can leverage data-gathering abilities to create truly personalized marketing, shopping experiences, and products, to their customers.
The way data-gathering tools have developed, even traditional businesses that do not operate online can use them to gather information about their customers. The industry, the type of business, and the type of storefront do not matter anymore. You can, for example, have a medical marijuana dispensary, and use dispensary POS software to gather data about your in-store sales and customers. And there is no reason why you wouldn’t use the same data to power an online shopping experience.
Creating Omnichannel Hyper-Personalization
The merging of brick-and-mortar and digital shopping, often mislabeled as “retail apocalypse,” is one of the key examples of the benefits of omnichannel personalization powered by omnichannel data gathering. The convergence of traditional commerce and e-commerce into just commerce reflects the desires of the consumers. We have data that shows that consumers like the best of both worlds — in every major product category, users like to research both online and offline, and they like to purchase in the same way.
Businesses that want to meet their customers on the customers’ terms have ways of doing it while providing a personalized experience. The solutions that gather data from both physical and digital interactions exist. Brands, retailers, or anyone who offers a service or a product can use points of contact to derive data to power a hyper-personalized experience on every channel they use to interact with their customers. But different channels have their specific functionalities. Creating an experience that is reflective of a brand and personalized to the needs of customers requires a level of integration that seamlessly blends different channels into one experience.
When Hyper-Personalization Clashes with Branding
Hyper-personalization comes with its own set of perils. Businesses should be aware of them, and they should find ways to minimize their effects, if not avoid them completely.
One of the key problems for brands is that, if they offer a hyper-personalized product or service, they risk completely removing the branding from it. In that case, personalization should be kept at the level that allows customers to recognize themselves in the products and services they need, without affecting the brand’s own personality. Nike’s customization option is a good example of a brand allowing its customers to personalize the product while keeping the branding elements intact.
Data Gathering and Usage Problems
Hyper-personalization depends on a business’ ability to gather data about its consumers. Gathering data, however, is much like walking a tightrope. Different regions have different regulatory requirements for entities that gather user data. This year, we are expecting new regulations regarding data gathering to come into effect in the EU. Brands, businesses, marketers, website owners, everyone who gathers data about the users of its digital assets need to stay on top of changes in an evolving legal landscape.
But then, there are the consumers and their preferences. Surveys show that more than a quarter of consumers don’t like it when companies acquire information about them without their consent. Around 15% feels that companies who use their personal information violate their privacy. Almost the same number of consumers has questions about the origin of the information and the safety of its storage. Of course, these problems are easy to deal with simply by implementing strong transparency policies.
Businesses should also determine how best to use the consumer information they gather. Customers like when the information they provide allows them better deals or discounts based on their history of purchases. They also have nothing against providing data as a way to get faster and more convenient service such as expedient checkouts.
Hyper-personalization is a reality most businesses have to deal with. It fits perfectly with the current trends in retail, and it is powered by technologies that are becoming so widely used that we will soon forget there was a time we did not have them. However, hyper-personalization is not something businesses should take as a simple fad, because it is not a fad, and it is everything but simple.