In this opinion piece, Fjord’s APAC general manager, Bronwyn van der Merwe (pictured below), offers marketers some valuable tips on using data to personalise the customer experience.
The rise of connected intelligence is bringing in a new digital era: living services. These are sophisticated, contextually-aware digital services designed to anticipate and respond to our needs. Living services change around us in real time based on data and analytics such as changes in our environment and our patterns of behaviour, and they will transform the way we live, work and play.
The retail sector is arguably one of the industries that has been most affected by digital disruption, and continues to be. Harnessing technology and delivering living services has become imperative to succeed in this new landscape, and Australian online retailers such as The Iconic have pioneered the use of data and analytics such as shopping history, sizing and style preferences to enhance and personalise the user experience.
Whilst many companies use various data points to create a seamless experience, the use of consumer data is a contentious issue, with various high-profile cases of misuse. Despite this, Australian consumers are generally willing to share their data with retailers to receive a more personalised experience.
However, it must be sensitively handled. according to Accenture’s research, 41 per cent of respondents stated that they disliked tactics such as receiving texts from a brand or retailer when walking by a physical store. More than one third (35 per cent) also disliked receiving ads on social sites for items they’ve browsed on a brand website.
To balance these competing demands, retailers must remember that the key is using customer data and insights to deliver an exciting and indispensable service, without overstepping the fine line of data privacy.
At Fjord, we believe that in order to achieve this, Australian retailers must take a customer-first approach to personalisation. After all, consumers don’t want brands to define their journeys – we want brands to offer experiences that will help us carve our own paths, removing mundane tasks and anticipating our needs in delightful ways.
Enabling a two-way digital dialogue
Australian retailers should look to harness data to create ongoing, two-way digital experiences that resemble interactions customers would have with a sales or service associate.
Japanese retailer Uniqlo is a leading brand when it comes to using digital to create these two-way experiences. In a first-ever neuroscience campaign in Australia, Uniqlo introduced wearable technology ‘UMood’, which selected clothing to match the mood of its’ customers. And the brand continues to use digital to strengthen two-way dialogue, recently launching an AI-powered assistant in its app for Japanese customers, offering voice-enabled customer service and recommendations based on personal preferences.
Brands who use data to drive stronger relationships with their customers build what Accenture labels a ‘living profile’. These living profiles allow the customer to own and drive the experience and are the most effective tools in creating services based on each customer’s unique preferences, passions and needs.
Living profiles go beyond what a customer buys or consumes to capture the more detailed nuances that explain why customers make certain choices. In the clothing industry, for example, aspects such as fabrics, styles, features, fit, and brands would make up a living style profile that evolves along with the customer.
In fact, Accenture research found that 74 per cent of respondents said they would find these ‘living profiles’ valuable if they could be used to curate the experiences, offers and products they receive.
Nike’s new concept store, Nike Live, does exactly this. Through leveraging digital data, the store tailors experiences to the individual users’ needs, like try-on and order pick-up, as well as determining the product assortment the store carries.
Online retailer, ASOS, is another example of an organisation building living profiles of its customers. By using machine learning, ASOS analyses customer demographics, purchase and returns history, web and app session logins to differentiate each customer, categorising their value and ultimately providing them with tailored purchasing options and experiences.
It’s important to note that as brands shift from traditional marketing communications to digital, there tends to be an over reliance on data and technology to define the experience. Although data is critical for good personalised experiences, that is only one part of the solution. For brands to succeed in their transformation they need to create an experience that’s led by great design, fuelled by customer insights and enabled by data and technology. By respecting customer data and putting customers in control of the experience, businesses create the most effective and feasible way to scale one-to-one personalisation.
For many Australian retailers, the only way to keep pace is to create engaging experiences that build trust in the way customer data is used. The formula for a successful context-aware service is to always remember that the benefit – in terms of utility, automation, pleasure, beauty and new perspective – must always outweigh the cost, which could be loss of control, lack of privacy, distraction or anxiety.
So, how can brands ensure that the benefits of new digital services always outweigh the actual or perceived costs? Fjord believes they need to take two steps.
Firstly, brands need to reduce the implicit cost to consumers by increasing:
- Transparency: let me see what is happening to my data.
- User autonomy: let me control my data.
- Security: don’t leave holes in my personal network.
Secondly, brands need to boost the explicit benefit of by increasing, as appropriate:
- Automation: remove unnecessary cognitive load from me.
- Personalisation: shape services around me.
- Adaptation: understand the changing external context.
Retailers need to effectively harness data that satisfies expectations by empowering consumers to truly carve their own paths to purchase – for example, by enabling them to signal their interest in offers and setting how and when they receive promotions.
Australian retailers such as The Iconic have shown that investing in data and digital technology is imperative to lead in this new landscape. After all, successful personalisation will only be seen by retailers that start two-way conversations with consumers and enable those consumers to create their own experience while interacting with the brand.