Advice to Retailers [2016]

In case you haven’t noticed the era of big-box retailers has come to an end.

That’s not to say that many of them won’t hang around for a few more years, clinging to life support. it’s just that the future of retail lies in being agile and brands that can best accomplish this will survive.

My insight into this is that ultimately the consumer has all the power in this relationship.  Retailers have the choice as to whether or not they re-evaluate their omnichannel strategy, their customer experience and how often they do so.  With that being the case, I can’t help but notice how soo many retailers, whether out of loyalty to one platform or because of unchecked egos, have grown complacent and are failing to keep up with changing consumer demand.  They simply believe they are infallible.

Word of advice, if you’re selling the same way in 5 years as you’re selling today you probably won’t be selling much.

Big Data is the Key to Retail in [2016]

Brick and mortar stores who wish to stay in business in 2016 must change the way they engage with customers.  This is a direct result of a very real shift that is occurring as more consumers choose to spend their dollars online.  To put this into perspective, online shopping in the U.S alone rose 23% in 2015 to 76.9 billion and it is expected to increase at a similar pace again this year.

In order to survive in today’s marketplace, retail must embrace the innovative technologies that have been driving this eCommerce boom, namely personalization, and big-data.

By embracing personalization and big data, retailers can take cues from leading online brands such as Netshoes, Crate & Barrel and Hayneedle who have long relied upon Baynote to power their personalization initiatives.  These companies have shown that they are serious about every aspect of the customer experience and are willing to double down to meet the needs of today’s demanding shopper.  As a result, these online retailers have become wildly successful and have built a very loyal customer base.

“The ability of this solution to intelligently introduce our customers to relevant products across our ever growing assortment made the Baynote solution a superb choice to augment our internal expert recommendations.”

— Dave Markle, Director of Site Experience. Hayneedle

Similarly, brick and mortar brands such as Bloomingdales, Gander Mountain and Brookstone have also made the shift to providing a more data-driven customer experience.  By partnering with RetailNext, a leader in the in-store analytics space these brands and many others are utilizing real-time analytics to collect, analyze, and visualize in-store data from a nearly endless number of touchpoints.  This data is giving these traditional retailers the ability to gain shopper specific insights which had before only been available to online retailers.

“It helps us make a better correlation between transaction data and traffic.  So we can find opportunities we might be missing.”

– Chris Schindler, Director of Operations. Gander Mountain.

By taking advantage of innovations in technology from companies such as Baynote and RetailNext, retailers are able to maximize the lifetime value of their shoppers, increase average order values, conversion rates and grow their bottom line.  Whether online or offline, the retail brands of today are able to truly drive seamless personal shopping experiences that customers have come to expect.

The only question is which retailers will heed the siren’s call and provide the personalized shopping experience that their customers are demanding and which will go out of business, there is no middle ground.

Getting Beyond The Personalization Buzzword

Far too I often I hear the buzzword, personalization, thrown around by solution vendors and I have to ask myself, “Do they really know what it means?”  Do these people understand that personalization is not re-targeting, that these words can not and should not be used interchangeably?  This issue has been weighing on my mind for some time so I thought I would explain the key differences as I see them.  Basically, targeting is about marketer needs and personalization is about consumer needs. Both techniques can increase revenue but they come at it from different angles.

As our VP of Product Dan Darnell wrote in a recent blog post, Targeting versus Personalization Explained:

With targeting, marketers and merchandisers take insight from their experiences and attempt to show relevant offers, content and products to visitors by using a variety of techniques, with the most common involving segments and rules.

Most marketers have a few buckets that they group customers into and this is as much for the marketer as anything else – new visitors versus loyal shoppers, soccer moms versus football dads, etc. The marketers believe that these groups buy different stuff or react to different content or promotions. In addition, these segments make sense to the marketers and help them organize their thoughts and content around key groups. For example, a marketer wants to provide an incentive for first time shoppers to come back again. So, they setup promotions to target visitors in this segment. This is a great strategy. It allows the marketer or merchant to control what the visitor sees and hopefully allows them to optimize based on business needs.

However…

Unlike targeting, personalization focuses on consumer needs. What offers, content or products will a particular visitor find most relevant based on their current needs. To create a relevant, personal experience for each visitor, a personalization engine soaks in all kinds of information about the visitor – where did they come from, where are they located now, where do they live, what did they search on, what page are they looking at right now, what have they bought before, what segments are they a member of, etc. All this information combined with powerful machine learning algorithms tells a personalization engine what content or products they are most likely to be interested in right now. As the visitor moves through the site, their intent can change. At first they may be interested in a new sweater and then their interest shifts to new jeans. The personalization engine goes along with them and continuously personalizes the content and products to best meet their needs given all the data that is available. Personalization at this level is not something that a marketer or merchant can figure out ahead of time.

Hopefully this distinction makes sense. When marketers and merchants think of the offers or products they want to promote, they are thinking about targeting. When retailers let visitors drive the decision making with their data and based on their intent in real-time, they are personalizing.  To learn more about how BaynoteONE can help you drive real-time personalization click here.

If you enjoyed reading the above, be sure to click the comment button below.  This will give me a chance to thank you personally, and connect with you