Digital etailing – personalisation takes another step forward

13Jul09

Another good article in Marketing Week.

But as the blighters cut their page links occasionally, I’ve copied the article below, as well as letting you click through to it: HERE

This time it’s very personal

28 May 2009 | By Morag Cuddeford-Jones

Smart Technology, such as that which allows online retailers to sense when a frustrated customer is about to prematurely abandon a transaction, is revolutionising personalisation.

Walk down any high street in the UK and you can’t help being struck by the number of boarded up shop windows. From big names to family stores, the credit crunch has hit retailers hard. Yet online retail is up 15% this year to £50bn in sales, according to etailing body IMRG.

While price, convenience and choice are all important online retail offerings, the internet market has evolved to the extent that those retailers that go one step further than rivals to woo the consumer will prevail – these are the brands making things personal.

Echo E-Business Management’s managing director Deborah Collier says “Personalisation gives any etailer the competitive edge. Branding is important but the ability to engage customers and understand them is crucial in tough times.”

Personalisation has been a hot topic for some time, helping brands improve one-to-one marketing, customer segmentation, up and cross-selling. But today, it’s all about predicting what the customer wants before they even know they want it and then making them think it was their decision in the first place.

When you think of personalised online content in the retail context, online lifestyle retailer Amazon springs to mind as the most advanced purveyor of this sales technique. Based on previous choices, each new visit to the site produces book, DVD and even kitchen equipment suggestions. However, it is now being suggested that Amazon’s model is very much a blunt instrument.

Frank Lord, managing director EMEA of ecommerce provider ATG, argues: “The Amazon analogy highlights the common problem with this kind of personalisation. If I use it to buy a ballet dancing gift for my daughter, I am then continuously given ballet suggestions. Personalised etailing has many more levels of complexity.”

Collier adds: “With Amazon’s kind of personalisation, you can put people off by selling them the wrong thing.”

So how can the sales environment become truly personal? Guy Westlake, senior product marketing manager EMEA at ecommerce provider Vignette, suggests: “The most cutting-edge technologies track customers’ actions on your site and build a profile of their wants and behaviours from there. Within one or two clicks on the site, you can build up a picture of the consumer.”

Three-step process

However, in what may be seen as personalisation heresy, Westlake explains that, as a rule, our behaviour is never that individual and even if it were, you could never give every single person exactly what they wanted. Instead, he advocates a three-step process:

Use technology to harness the wisdom of crowds and understand your consumer to personalise the product offering. “It’s low cost, high return and has a short lead time to implement,” Westlake says.

Personalise the online experience taking the lead from social networking. “Retailers underestimate that customers love talking to each other. They like to have ownership of brands and it creates advocates further along the loyalty ladder,” he reveals.

Allow users to add their own further levels of personalisation. Westlake explains: “Sites such as the BBC’s draw users into the experience, create ownership of the online environment and make it a port of call rather than a sales channel.”

But despite etailing’s continued growth in an otherwise shrinking economy, the sales environment is still failing to reach its full potential. Westlake states that it takes an average of six clicks for the user to find content that is relevant to them and this may be a contributing factor for the 95% of potential customers who abandon their baskets before they can complete a transaction.

ATG’s Lord believes he may have a personalisation solution to the problem, primarily taking online offline again. “If a customer has a problem in a real store, they simply ask an assistant. It’s very difficult to do this in the online environment.”

He suggests introducing “Click to Call” technology that allows the online consumer to get hold of a real person in real time to assist with the purchase.

This relies on the customer being motivated enough to seek help, however. Lord believes that this technology can also anticipate when a customer may be about to drop one of the fabled 95% of unsold baskets.

“The greatest return on investment for this technology comes as it pays attention to when the customer is likely to leave. The customer may have been shopping for a while, clicking through pages and pictures, but then the movement stops and nothing happens for a long time,” he reports. “The Click to Call option can then appear as a pop up, prompting the customer to ask for help. Equally, problems often occur at the credit card stage, so Click to Call would also work here.”

Collier at Echo E-Business agrees that merging the on and offline ways of behaviour brings personalisation home. “I love the Dell website where it comes up with a message from a chat operator, a real person. It isn’t intrusive. The ability to have the same customer service both on and offline makes me feel reassured about the purchase.”

While Lord claims that a personalised human interaction is not a costly addition to an etailer’s portfolio of services, one simple and cost-effective way to personalise reverts to the old customer relationship management adage of “knowing thy customer”. In its most simple form, this revolves around creating a sign-in process to allow the online retailer’s technology to access former orders and preferences. However, there are indications that the sign-in process is not seen by the customer as a benefit and can often lead to even greater customer churn as potential shoppers leave the site even before registering.

Freddie Laker, director of digital strategy at business consultants Sapient Interactive, recognises that inconveniencing the customer in the pursuit of personalisation can be counter-productive, but believes the industry is on the verge of finding a solution.

“The new twist in ecommerce is using open IDs such as Facebook Connect. Using one simple log-in for a wide variety of sites is very consumer friendly and allows the etailers to benefit from the pool of information gathered as the customer travels around the web,” he argues.

Social media

Laker feels that this is the tie-in between commerce and the social media phenomenon that brands have been seeking. While Facebook Connect is not used as a commercial tool as yet, he can see a future where shopping using an open ID then transmits your purchases back to your Facebook mini-feed where you can share your experiences, comments and reviews with others, ticking boxes in terms of ownership and advocacy.

The costs involved in re-engineering your online presence for greater personalisation needn’t prove punitive. ATG’s Lord claims add-ons such as Click to Call can fit in a small budget and take no more than two or three weeks to implement. However, he does admit that the personalisation project his company has taken on for Tesco runs into seven figures and has taken between six and 12 months. However, Lord explains: “The return on investment in this case is going to be very dramatic.”

He points out that harnessing social media is an even less expensive way of building in personalisation. “Twitter, blogs and ratings get customers to interact. It’s a small incremental cost to have customers engage with you,” Lord points out.

Westlake has the numbers to crunch. “There’s a real business value driven by these technologies. We have been working with a major high street brand on a project running since December 2008. In the first two months, it saw £120,000 in additional revenue,” he claims.

Laker at Sapient sums up the challenge for etailers. “The reality is that in most cases online, particularly for the high-end high street retailers, they have become slightly commoditised. They can’t stand out through site design or product offering because the fact is, they’re all pretty bloody good. Personalisation is the differentiating factor from now on.”

Vignette are: HERE

ATG are: HERE

Echo E-business are: HERE

Sapient Interactive are: HERE

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2 Responses to “Digital etailing – personalisation takes another step forward”

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