personalization
Opinion

Retail needs to get really personal

BY David Orgel

You only think you know me.

Those are words a retailer never wants to hear, especially after tailoring marketing and assortments to consumer needs.

The desire to get more targeted has the industry excited about a new era of personalized marketing. You think local marketing is cool? Personalized marketing is far more powerful. It’s generating buzz across retail channels, from mass market to hard goods to grocery.

Just to be clear, much of the momentum is driven by competitive threats. “It’s due in no small part to Amazon, which is presenting shoppers with items based on their past purchases, browsing, and wish lists,” said Gary Hawkins, a former retail CEO and an expert on consumer loyalty at retail. “So to compete with that, retailers need to become adept at personalization and relevancy.”

Retailers vary widely in these capabilities, with such companies as Kroger, Walgreens and Nordstrom often cited as leaders.

Why didn’t years of retailer loyalty programs manage to accomplish the kind of personalization we are now talking about?

A big reason is technology. It’s only now that new technologies, such as artificial intelligence and machine learning, are advancing capabilities. The excitement is about more customized solutions for everything from consumer products to healthcare, combined with better ways to deliver offers to customers, including through digital coupons, apps and digital wallets.

New developments also are starting to make personalization more affordable and less labor intensive. The era in which retailers need to employ large, expensive teams of data analysts may be coming to a close due to software advances that boost personalization capabilities, said Hawkins, a strategic advisor to digital solutions company Birdzi, which focuses on this strategy.

Personalization has the potential to address some of the most important consumer needs, delivering convenience to time-starved shoppers through on-demand products, or relevant healthcare solutions to consumers based on specific conditions.

The health and wellness potential can’t be overstated, especially in the face of overwhelming U.S. health challenges, much of it due to chronic conditions.

Personalized wellness has the opportunity to bring together healthcare and food to address this problem, according to a white paper by Hawkins and Dr. Marcus Sredzinski, COO and EVP of Medical Security Card, LLC.

“It bridges the chasm by leveraging nutrition science, big data, artificial intelligence, machine learning, and consumer technology to guide each person to foods and products beneficial to their individual health condition,” according to the paper.

Despite all the promise of personalization, we can’t count the benefits before they materialize. There will be hurdles to overcome. First, if products and offers aren’t relevant, it will turn off consumers, maybe for a long time. Second, it’s not just products that need to be personalized, but also prices.

“Usually the price element is not personalized,” said Graeme McVie, chief business development officer of Precima, a data-driven solutions company. “It’s often done by type of customer at the micro-segment level. But you need to truly get to price by item by customer.”

Roadblocks aside, personalization needs to move forward, because the potential benefits are so great. In fact, this strategy may help determine where consumers will shop in an omnichannel world. Personalization should be a province of tech-savvy online retailers, which have loads of data about their customers. However, it could also be a key strategy for brick and mortar retailers to attract shoppers to physical stores. Retailers need to create relevancy at all shopper touchpoints, including in-store, web, tablet, mobile app, and other platforms, Hawkins emphasized.

Ready or not, personalization will happen. And the generation everyone’s trying to reach, Millennials, will probably be the most receptive of all, as long as it makes a difference in their lives.

If it doesn’t, we’ll hear about it, loud and clear. The marketing may be personal, but consumer feedback these days is rarely private.


David Orgel is an award-winning business journalist, industry expert and speaker who was the longtime chief editor and content leader of Supermarket News. He is currently the principal of David Orgel Consulting, delivering strategic content and counsel to the food, retail and CPG industries.

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