With customer journeys becoming increasingly complicated, it's getting harder for businesses to keep track of customer needs, wants and desires, and use that insight to improve the customer experience as well as the outcome. Many businesses have tried to overcome the challenge by using ‘so-called’ personalisation – but is that working?

The findings from our recent research, entitled “The Art of Personalisation— Keeping it Relevant, Timely and Contextual”, highlight how many of today’s consumers are more than willing to opt-in to receive personalised communications via SMS, email or social media from the brands and retailers that they know. Indeed, an impressive number of shoppers in the US (55%), UK (52%), Germany (46%) and France (44%) say they often or sometimes sign-up to personalisation.

However, results also indicate that shoppers in all countries said that most messages they receive still feel like mass marketing that weren’t created with them in mind (France 47%; UK 42%; Germany 40%; US 36%). Clearly, with consumers ready and willing to engage, the rewards will significantly increase for those brands who adopt a more sophisticated and strategic approach which delivers offers and tailored suggestions based on their shoppers’ unique wants and needs.

Individuals want to feel unique
Despite this current personalisation shortfall, however, around one-third of messages received by US (37%) and French (32%) consumers, and around one-quarter of messages received by German (27%) and UK (26%) consumers had stimulated them to act.

Evaluating which personalised content held the greatest appeal for them, consumers in all countries said they most wanted to receive messages about products relating to their interests. Recommendations related to a previous search also ranked in the top three for shoppers in the US (43%) and UK (39%), while retargeting the exact product for which they’d previously searched resonated with consumers in France (44%) and Germany (40%). However, it was updates relating to product availability and/or price that proved particularly popular in all four markets, taking the #2 spot with 42% of shoppers in Germany and the UK, and was identified as the third most relevant message type by 44% of consumers in France and 42% in the US.

Consumers value applicability to their desires and like to be rewarded for their behaviour when it comes to personalised communications. In order for businesses to be successful with their personalisation efforts, they need to better understand their consumers, target them effectively and provide messages, recommendations and offers that are relevant to them and drive an emotive response. If they don’t do this, they risk annoying audiences with their outreach which, in turn, negatively impacts brand reputation and customer loyalty.

More or better?
In our experience, optimised personalisation -rather than more - is better. Amongst the leading retailers we work with, there is already a shift from a simplistic (and sometimes endless) stream of email promotions or product recommendation based on shopper buying habits, to a less cluttered and more refined approach. One which spans channels and makes use of new data sources such as geo-location, to inform the recommendation made. Retailers that take this new approach are the ones reaping the rewards, as they operationalise their personalisation efforts, moving from a pilot-based approach to ‘Personalisation at Scale’ as we call it.

Getting prescriptive on personalisation
Whilst the success of any personalisation initiative relies on people, processes, data and technology, one of the key technologies to achieving great things is prescriptive analytics. The goal of prescriptive analytics is not only to predict future outcomes, but to make recommendations based on those outcomes. It is reliant on new transactional and non-transactional data tracked via the consumers’ digital footprints across multiple platforms, to fuel its decision-making process and predictions.

For the customer, prescriptive analytics helps simplify their shopping experience by pre-empting their needs and suggesting products that they want before they are yet aware of wanting them – thus motivating even the most reluctant of shoppers. Moreover, it makes those suggestions in proven ways that work for not only that category of consumer but also their unique preferences.

Harnessing prescriptive analytics takes time. To get the full value of the new tools, workflows and methods, most managers need to change the way they think and work. In our experience, widespread adoption also requires extensive testing, patience and the right champions if it is to be a success.

Prescriptive analytics is much more than software and data science – it’s a way to combine the strengths of humans and machines to make better, faster decisions, based on new insights. Using it to make significant performance improvements therefore requires organisational and mindset changes. But it does not need to be an overnight change. Planned incremental steps in individual categories can help build confidence in the technology and lower the risks.

The close link between insights generation and decision making will help companies to create a continuous stream of pleasant and personalised surprises for customers who will reward them with more purchases, increased loyalty and recommendations of their products to others. For those retailers prepared to try something new, there is a real opportunity impact the bottom line and wow customers.


Written by Lars Fiedler, Partner and Senior Solution Leader of Marketing Solutions, Periscope® By McKinsey

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