Customer Personalisation for the Advanced Shopper
Personalisation is now one of the core tenets of ecommerce. Research has consistently shown that customers desire personalised services from the retailers they choose to do business with and are even willing to pay more for the same products to get one.
However, personalisation is about to get even more complicated than it has historically been, as Google prepares to withdraw support for third party cookie data, and the wants and needs of an increasingly fickle customer base become increasingly focussed.
Retailers need to make overhauling their personalisation strategy a priority in 2023 if they want to incorporate these seismic upheavals and continue to provide their customers with the kind of retail experiences they are searching for – or risk being left in the dust.
When Google announced its intention to withdraw third party cookie support for its proprietary Chrome browser – the most popular internet browser in the world – it sent reverberations throughout the digital marketing world. Originally intended for 2023, the change has now been pushed back to 2024, but companies need to start adapting their strategies now in order to be ready in time.
"The most consistent feedback we’ve received is the need for more time to evaluate and test the new Privacy Sandbox technologies before deprecating third-party cookies in Chrome,” said Vice President of Google’s Privacy Sandbox initiative, Anthony Chavez. "This deliberate approach to transitioning from third-party cookies ensures that the web can continue to thrive, without relying on cross-site tracking identifiers or covert techniques like fingerprinting.”
Without this data to easily rely on, personalisation efforts are going to need to focus on first party data. Retailers will have to get to know their customers more personally than ever before and leverage survey data and information generated from their own website activity and CRM systems to work out the kinds of offers and recommendations to send to individual users.
With customers becoming increasingly cognisant regarding the gathering and use of their data – particularly in the wake of numerous high profile data breaches – a move like this was inevitable. Following on the heels of iOS introducing an opt-in policy for data gathering and Mozilla Firefox following suit, marketers need to refocus their personalisation game immediately.
Data and Analytics
Retailers developing large high-quality reserves of data is going to be essential in the new normal, if they want to meet the increasingly restrictive demands of the modern shopper.
"To support high-quality mass promotions, [retailers] needed a robust data lake (containing data on offers, transactions, and products), an analytics environment, and executional tools,” says McKinsey in a report on the grocery business. "For personalized promotions, these elements need to be combined with permitted data from customer-relationship-management (CRM) and loyalty systems, including customer purchase behaviour, app interactions, and profile information.”
There is no doubt this will require significantly more work than with the third-party cookie model as data now needs to be gathered from multiple sources, all the while navigating an increasingly restrictive and draconian regulatory environment. This data will also need to be segmented to achieve different goals around personalisation.
"Next to data, assessing the impact of personalized promotions on customer lifetime value calls for a wider set of models,” continues McKinsey. "For example, there will be two models to increase store visit frequency: one model pinpoints the potential for increasing a customer’s frequency, while the other recommends the best product to drive that customer to a store. Yet another model could help in selecting the right channel or message.”
As these models are put into action, they will lead to more sophisticated data reserves in their own rights. Each time a personalised campaign is completed, retailers can conduct A/B testing to refine strategy and constantly develop their understanding of customer behaviour. This approach can be deployed to improve statistical models, eliminate promotions which yield poor results, as well as developing a culture of testing and learning throughout the organisation.
The good news is that these strategies are universal across all sectors of the retail business and can be deployed with relatively little stress or expense. In fact, it’s highly likely your organisation already has many of these data gathering tools in place, but simply haven’t been using them to their fullest because of the simplicity, convenience, and effectiveness of third party information.
Final Thoughts
Third-party cookies’ days are numbered, of that there is little doubt. Once Google has developed its privacy sandbox, things will start to move very quickly, and retailers will need to be ready ahead of time. Personalisation will still be important in retail, which means brands need alternative strategies to meet the needs of the modern shopper.
Personalisation is sure to be part of the conversation at eTail UK 2023, being held in April, at the QEII Conference Centre, London, UK.
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