Every business today, regardless of industry, faces the threat that its goods and services will become commoditized vis-a-vis competition. Winning in this environment requires differentiation through the creation of memorable experiences.
By Raj Badarinath
It’s all about the Customer today. People have more options than ever and online retailers are making it easier and more convenient to acquire anything they might possibly want.
Subscription programs, “Buy Online Pick Up in Store” (aka BOPIS or BOPUS) programs, and next-day shipping are features that drive more online purchases. But are retailers giving their customers the experience they really want, or is some of the technology employed with an eye towards personalization creating the opposite effect?
Future-forward technologies are fast-becoming the holy grail of marketing, and AI is proving a key tool to drive customer engagement and propel brands to the next evolutionary step in the Experience Economy. More and more brands and retailers use machine learning to accurately predict what will encourage browsers to become shoppers, and to create the stickiness needed for shoppers to progress from browsing to shopping cart to check out.
Customers today expect highly personalized experiences, with products and services tailored to their individual preferences. Personalization is the concept that has long been promised to give customers what they want, when they want it. Machine learning unlocks the possibility to create hyper-personalization, where the brand can truly serve its customer as an individual, and not as part of an over-generalized segment.
The potential of hyper-personalization is to create a “segment of one” for each customer. By understanding their likes, preferences, and behaviours, brands can inspire them to discover more products and content that will speak to their individual taste, providing a totally unique shopping experience.
But how should you balance the potential benefits of AI/Machine Learning with perceived risks from the customer point of view? How do you tell when a brand or retailer has crossed the line, creeping out the shopper? In providing a personalized experience, are brands really doing it right or are they overstepping boundaries in the race to win the next customer?
To understand the distinctions between what works for shoppers and what creeps them out, the RichRelevance 2018 ‘Creepy or Cool’ survey recorded answers from over 2500 respondents across the UK, France and Germany, asking consumers to rate a number of different technologies and trends as either ‘creepy’ or ‘cool’, as well as ascertain sentiment towards the use of AI.
Previously trendy technologies, such as using fingerprints for payments or interactive mirrors remained ‘cool’, but experienced a decline in popularity compared to 2017 (fingerprints down 6% to 50%; Interactive mirrors down 9% to 36%). Newer technologies such as voice search and virtual reality gained the biggest increase in interest with UK customers (voice search increased its popularity with consumers to 46% and virtual reality debuted on the survey with a ‘cool’ score of 41%).
Top 5 ‘creepy’ technologies according to UK customers:
- Emotion detection technology that adapts your shopping experience depending on your mood (58%)
- Facial recognition technology that recognises your preferences (57 %)
- Voice assistants within your home (Amazon Alexa, Google Home) are ‘always on’ and listening, providing product suggestions based on your conversations (56 %)
- Retailers know when you’ve been paid (56 %)
- Targeted ads on your phone based on your proximity to certain shops (46 %)
Top 5 ‘cool’ technologies according to UK customers:
- Fingerprint scanning to purchase items and arrange home delivery from the shop floor (50 %)
- Using voice-recognition technology to search for products (46 %)
- Smartphone apps that show product information, display videos, or even flag where desired items are located (41 %)
- Digital screens / interactive mirrors / virtual reality glasses in dressing rooms (36 %)
- Virtual reality goggles that simulate store aisles in your own home (41 %)
Designing a customer-friendly journey on your website is the first step toward creating a more pleasing shopping experience and becoming a successful e-retailer. It’s imperative to be empathetic towards the unique needs of your customers while allowing your business to create a personalized shopping experience that contributes to brand loyalty.
How retailers engage with their customers to deliver a more well-rounded shopping experience will vary depending on their offering and ethos. Technology is a critical piece of the pie to spark higher engagement and improve customer experience. The retailers who smartly employ AI and Machine Learning to increase personalization without violating customer boundaries will turn potentially creepy marketing tactics into “cool” and enjoy above par market success.
Raj Badarinath is VP Marketing & Ecosystems at RichRelevance.