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Study: What do consumers think about personalized marketing?

BY Dan Berthiaume

Before you declare your personalized marketing efforts a success, check with your customers.

That is the overriding message from a global study of 1,200 consumers and 200 marketing professionals conducted in October 2015 by Forrester Consulting for hybris. The study, “The Contextual Marketing Imperative,” finds that while 66% of marketers rate their efforts at personalization as “very good” or “excellent,” just 31% of consumers report companies are consistently delivering personalized, cross-channel experiences

In addition, 40% of consumers say most promotions don’t deliver anything of interest, and 44% of consumers say they receive too many offers and promotions. Thus it is not surprising that 37% of consumers say they delete most email offers and promotions without reading them, while 40% have unsubscribed or opted-out because they feel overwhelmed.

The negative impact of poorly executed personalization goes beyond driving consumers to ignore or opt out of promotions. Among those consumers reporting less-than-satisfactory personalized experiences, 61% said they were “somewhat” or “much less likely” to take advantage of future offers

Because consumers are sharing so much personal data with brands, they expect value in return – namely, in the form of transactional perks and improved customer experience. While most marketers seek to improve personalized customer experiences from this customer data, the study indicates their strategies are immature and their marketing efforts are falling short in this regard.

Many marketers still rely on segmentation methods that target certain demographics, such as a specific age group, which hybris advises is not nearly enough to engage customers. According to the study, 70% of consumers surveyed said they are aware that companies use personal information to send them targeted offers.

Collection of personal information in itself is not necessarily a problem. Seventy-four of consumers are “somewhat” or “very comfortable” with companies using data about them to provide personalized experiences.

But while 66% of marketers use demographics to create targeted content offers and 44% say they use demographic categories to create at least some level of personalization for unidentified prospective customers, only about half are using more sophisticated methods, such as leveraging data extracted from loyalty programs (52%) or behavior-based data (48%).

However, marketers at least recognizing their personalization efforts could be better. Ninety-one percent of marketers surveyed are prioritizing improving customer experience through personalization over the next year.

Despite the challenges marketers face in delivering contextual experiences, some are beginning to see signs of success. The key has been in centralizing customer data to capture real-time customer intent. The following study findings support this approach:

  • While only 16% of marketers surveyed currently have the capability to capture customer intent and deliver real-time, behavior-based marketing across all channels, an emerging set of more sophisticated marketers are starting to get it right when it comes to contextualized marketing efforts.

  • Of the 22% of marketers surveyed who each have a single customer database, 70% reported the data they collected was “very useful” in creating a single view of the customer, compared with just 52% of those without a unified database.

  • Armed with this valuable data across the customer journey, these marketers are 16 to 30% more likely to incorporate real-time marketing across multiple channels.

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The North Face uses artificial intelligence to engage with customers

BY Dan Berthiaume

Specialty outdoor retailer The North Face is engaging its nature-oriented online customers in a very down-to-earth way.

The North Face is launching a new interactive online shopping experience. Using the IBM Watson artificial intelligence platform and Fluid XPS intuitive recommendation engine, customers can now use natural conversation as they shop online to receive personalized outerwear recommendations.

“The customer searches for a jacket that suits a specific activity,” said Cal Bouchard, senior director of e-commerce for The North Face, in an interview with Chain Store Age. “We are trying to build a more personal, intuitive way to get to the jacket.”

Bouchard said The North Face is updating its online interaction with customers in response to a shifting e-commerce landscape.

“Traditionally, consumers shop for a product online using a white grid with product images,” said Bouchard. “They are finding new ways to shop for and explore products online.”

Bouchard said other retailers have used search algorithms that let customers describe products using natural language. However, she said The North Face is the first retailer to engage customers in an automated question and answer session that analyzes their natural language answers to deliver highly targeted results.

“In our pilot, the customer engaged in a roughly two-minute question and answer session,” said Bouchard. “Eighty percent of customers surveyed at end of the session said they would do it again.”
The North Face experience leverages Fluid’s Expert Personal Shopper (XPS) software. Utilizing Watson’s natural language processing ability, XPS helps consumers discover and refine product selections based on their responses to a series of questions.

For example, after a shopper enters details on a desired jacket or outdoor activity, XPS will ask questions about factors like location, temperature or gender to provide a recommendation that seeks to meet the shopper’s specific usage and climate needs.

"At The North Face our mission is to inspire a global movement of outdoor exploration," said Todd Spaletto, president, The North Face. “By tapping into the power of IBM’s Watson, we can ensure our customers get the best jacket for the activities they love, whether that’s ice climbing in Montana or skiing in Vermont. This not only improves their online shopping experience, it ultimately maximizes their outdoor experience.”

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Walmart confirms chief marketer resigning

BY Marianne Wilson

Walmart confirmed that its CMO, Stephen Quinn, who had held executive marketing positions with the chain for 10 years, will retire in January.

Michael Francis, Target Corp.'s former marketing guru, has been hired as a consultant. Francis spent 26 years at Target and most recently served as global brand officer for DreamWorks Animation. In August, he announced that he planned to step down from Dreamworks.

"If I was still working at Target, my heart would just sink," said a former Target executive in report on Twincities.com.

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