Don’t stand too close to me – big data in retail, is there such thing as too much personalisation?

By Gary Brooks, creative director at KHWS

Brooks: personalisation must be tailored to suit the shoppers’ frame of mind

The surge of digital is our modern day industrial revolution. From the constantly updating streams of content broadcast on social media, to e-commerce chatbots, it has changed every aspect of our lives. From Amazon’s drone delivery to the Internet of Things anticipating consumer needs before they even know it, big data and analytics are already having a marked impact on the retail environment.

It is tempting for retailers to see each and every tech development as a shiny new holy grail, providing the long-sought answer to some of the industry’s most challenging questions: how do retailers build a better community? How do retailers better measure the path to purchase? – drilling deeper and deeper into data-led shopper insights.

However, at this time of rapid acceleration, retailers are racing to ensure that they are making the most of tech and data at their fingertips. But there is value in pausing and considering how much personalisation is too much. Although big data can provide a solid, scientific ground on which to build a retail marketing strategy, it is not as nuanced as complex shopper behaviour needs it to be, meaning that there are discrepancies between the way it categorises and targets consumers and the shopper realities.

Up close and personal

Online personalisation is becoming increasingly effective. We marvel at how often it gets it right, but it’s by no means reached its peak – we’ve all been spuriously recommended a product that completely misses the mark, supposedly based on a previous purchase. Personalisation strategies are firmly on the radar of retail marketers in order to maximise the lifetime value of existing customers and gain new ones. However, the requirement for personalisation extends instore too, with 53% of UK consumers spending less than two hours browsing per physical shopping trip. It seems like an obvious step to use available data to deliver more convenient and personalised shopping experiences to match the ease of online shopping.

Big data analytics will play a major role in shaping the future of the retail industry. But there is a fine line to be walked. The shopper decision-making process is complicated and humans are, by nature, unpredictable. Is hyper-personalisation actually giving consumers what they want? Perhaps not. Data and prediction is the antithesis of serendipity, which provides a huge amount of satisfaction and pleasure for humans. This can be applied to shoppers in that they can discover products that they didn’t even know they wanted, or needed, though bricks-and-mortar browsing. Highly-focused targeting online might force a shopper’s hand to purchase, but too limited choice can just as easily push them the other way – away from the point of sale. It is beginning to take away the joy of impulse shopping, by increasingly refining which products are pushed to individual consumers – there must be a balance.

Brand commerce – enabling you to walk the line

Behavioural science has been a common point of reference for some time, helping to identify how shoppers make purchasing decisions. However, this is having to be reconsidered for the digital age.

Whilst there are over 120 heuristics – the hardwired short cuts we use to solve problems and make decisions – identifying and reframing the nine most relevant to purchase decisions provides a base from which to shape strategies and ideas that help drive retail sales. In turn, this framework makes behavioural science useable for retailers and will begin to unpick the reasoning behind shopping, not just the route to get there. Are they thinking fast or slow? Is it a habitual decision? Are they acting on recommendation? Or are they looking for something new? Understanding this is the real key to identifying the optimum level of personalisation and will ensure that retailers don’t limit potential sales through overly narrowing recommendations, or overwhelm shoppers with choice when they are not in the right frame of mind to receive it.

The truth is, retail personalisation has to be tailored dependent on the shoppers’ frame of mind – this differs according to the time of day, the category, and the platform. An understanding of how behavioural science can drive brand choice amongst shoppers must be the basis for more informed and effective marketing activity. This will help overcome the challenge of giving consumers the right level of personalisation in the era of big data.

(A Retail Times’ sponsored article)