In November 2021, McKinsey published an article about importance of personalization in modern retail. Key notes below:
Due to COVID-19 and growing of opportunities to analyze consumer behavior, personalization in retail is even more matter. 3/4 of consumers chose a different store, product or method of purchase during the pandemic.
71% of consumers expect retailers to communicate with them personalized. And 76% are disappointed if they don't.
Personalization improves company productivity and allows to grow 40% faster than more slower competitors.
Personalization is not just an option, but already a key tool in the competitive game. Consumers don't just want personalization, they demand it. Approximately 75% of consumers have changed their shopping habits last 18 months and most of them are happy about it. In addition, research shows that brands using personalization to communicate with customers generate 40% more revenue from these actions than another.
Players who are leaders in personalization achieve outcomes by tailoring offerings and outreach to the right individual at the right moment with the right experiences.
Customer expectations for a personalized approach have become even higher after pandemic and the growth of online customer-business interactions. Consumers now takes personalization for granted. 72% of consumers said, that thay expect that brands will reflect their interests and preferences. When asked, "What is personalization to them?" consumers responded that it was a pleasant feeling of being cared for. They respond positively when brands showcase their investment in customer relationships, not just sales. Personalization is especially effective with repeated interactions. This interaction creates a large amount of data from which companies can draw customer experience, creating strong and long-term customer loyalty.
Key ways to achieve personalization in communication with clients
Monitoring the life cycle of each client and identifying growth points that can boost the sale of goods and services. By shaping detailed customer segments and considering customer behavior patterns, companies can determine when personalization is most effective.
The growth in the volume of data requires the use of modern machine learning technologies for quick multi-channel decision-making. For example, companies use predictive analytics to determine what content and messages are best to send to which customers.
Agile operating model
Application of testing and training mechanisms for talents with the ability to provide multi-channel communication with the client (via digital or physical support channels)
Investing in talents and training. Focusing on the skills needed to support and manage personalization (quick thinking, e-commerce, advanced analytics, product and performance management). The development of internal competencies of teams allows to quickly implement and develop personalization methods.
Creation of partner networks that allow customers to get the maximum number of points of interaction with goods and services.
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Translation and review: Evgeny Strokin Author: McKinsey