Personalization has become an integral component for successful omnichannel strategies, as companies understand that individualized experiences persuade customers to engage across multiple touchpoints, driving lifetime value and revenue. For the retail sector, incentivizing shoppers to interact with the brand across numerous channels encourages them to spend more and spend often.But, as Retail Systems Research's recent "Retail's Email Moment: How Personalization Can Revitalize Retailers' Email Strategy" report suggests, only those brands that tap into email's full potential receive the maximum benefits, for they comprehend this maturing tool's ability to bridge the channel gap. Sponsored by CQuotient, the study reveals that 47 percent of respondents agree that multichannel customers are more profitable than single channel customers. Yet, despite this near majority, few have mastered the skills and strategies necessary to achieve personalization through targeted messaging.
The following trends highlight the primary struggles facing retail marketers today and ways in which they can alter their perceptions to better meet the needs and expectations of their consumer base:
1. Tackling Internal Challenges and Distractions
As the debate over segmentation (push) versus behavioral (pull) marketing heats up, companies are beginning to realize that much of the problem lies in the way they operate. While push marketing comes from the traditional, physical side of the business, offering very little customer information, pull marketing carries the vast data collected across digital channels. Thus, 49 percent recognize that "understanding and accommodating how different customer segments engage" remains their top operational challenge, while 53 percent believe "more effective targeting by capturing more detailed customer preferences" to be their biggest marketing opportunity.
2. Bridging the Personalization Gap
The proliferation of contact channels makes it increasingly difficult for companies to develop consistency across all touchpoints. As a result, 61 percent of retailers found that customer retention has become more difficult and building customer loyalty remains challenging, 49 percent can't keep up with the new ways consumers use technology, and 42 percent feel too many communication channels have unproven effectiveness. Therefore, brands struggle to develop a balance between digital engagement and traditional media. Instead of relying on the once tried and true methods of mass media, retailers must embrace smaller unique campaigns to achieve successful personalization strategies.
3. Underestimating Email's Value and Potential
Though most retailers struggle with the transition from mass to targeted messaging, only 31 percent of retailers polled cite targeted email campaigns as the top priority on their journey to overcome challenges and increase customer lifetime value. Unfortunately, the problem often lies in how retailers perceive email, for most see little value in using email to close the gap between digital and physical stores. While 44 percent believe email drives traffic to stores, only 13 percent feel email drives sales within stores. Thus, email tasks and capabilities often fall into the hands of the digital marketing team, whose goals typically focus upon driving traffic to the brand's website, not establishing an omnichannel experience, delaying progress even further.
But, as personalization becomes an expectation, retailers will recognize two trends that continue to dominate the space and dictate the rate of progress:
1. Amazon: No matter the brand's reliance on e-Commerce or not, all retailers must indirectly compete with Amazon, for the online leader offers consumers high degrees of relevancy, thereby impacting the average shoppers' expectation throughout the retail space.
2. Privacy: Because recent data breaches continue to challenge consumer trust, many are beginning to use cash instead of credit cards as they consciously guard sensitive information, while others expect companies to use shared data to increase relevancy.
Email offers retailers the opportunity to connect omnichannel touchpoints, yet many still struggle to define ROI, allowing the business to fall behind, inevitably diminishing relevancy. In many instance, the influx of data may actually hinder progress, as the more data retailers have, the less they find it actionable. However, those retailers that kickstart their renewed strategy by focusing on campaigns that provide the most meaningful impact are likely to surpass their laggard counterparts. Such campaigns must take advantage of the opportunities personalization provides, thus creating a feedback loop that enables the collection and analysis of response data to identify successes and failures. Retailers must also test regularly so they can validate the behavioral changes sparked by personalization. Ultimately, retailers must look for results beyond the digital realm, as personalized email strategies have the power to bridge the gap between online and physical stores.