Individualization: How Data And Technology
Are Redefining Personalization
Brendan Witcher, Principal Analyst February 17, 2016
@BrendanWitcher
Empowered customers have given
rise to a new era.
© 2015 Forrester Research, Inc. Reproduction Prohibited 4
Empowered customers have given rise to a new era
Age of manufacturing
Mass manufacturing
makes industrial
powerhouses
successful
• Ford
• Boeing
• GE
• RCA
Age of distribution
Global connections
and transportation
systems make
distribution key
• Wal-Mart
• Toyota
• P&G
• UPS
Age of information
Connected PCs and
supply chains mean
those that control
information flow
dominate
• Amazon
• Comcast
• Capital One
Age of the customer
Empowered buyers
demand a new level of
customer obsession
• Macy’s
• Salesforce.com
• USAA
• Amazon
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The past.
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Today.
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Organizations must focus on four market imperatives to meet the needs of customers
Transform
the customer
experience
Embrace
the mobile
mind shift
Become
a digital
disruptor
Age of the
Customer
Turn big data
into business
insights
Your business needs to dramatically
change in the age of the customer or risk
being disrupted out of business.
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Welcome To The New Normal: Hyper-adoption
By 2019 there will be 3.5 billion
smartphones in the world.
Source: Global Business And Consumer Tablet Forecast Update, 2013 To 2017
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Source: Forrester Research Web-influenced Retail Sales Forecast: 2015 To 2020 (US)
Image Source: (media.pathfinder.gr/cman_img_f/9549445219531437587.jpg)
of 2016 store sales will be web-influenced
In the US,
38%
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$ billions
In 2016, 49% of all US retail sales will either be influenced by or occur online
› Source: Forrester Research Web-Influenced Retail Sales Forecast, 2015 To 2020 (US)
$3.4T
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Similarly, B2B buyers expect to utilize online buying to a greater degree
Base: 930 B2B buyers at organizations in Canada, US, UK, France, and Germany
Source: A commissioned study conducted by Forrester Consulting on behalf of Accenture and hybris, August 2014
52% of B2B buyers expect to make
half or more of their work
purchases online in 3 years
Each time a customer is exposed to an
improved shopping experience, their
shopping expectations are reset to a new
higher level. › Image source: Wikimedia Upload (https://upload.wikimedia.org/)
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Experience is a significant factor in every online shopper’s journey
Base: 4,485 US online adults (ages 18 and over)
Source: Forrester’s North American Technographics® Customer Life Cycle Survey 2, 2015
Image Source: https://www.flickr.com/photos/83633410@N07/7658225516
68% “I am unlikely to return to a
website that does not
provide a satisfactory
customer experience.”
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Source: Forrester’s Business Technographics® Global Priorities And Journey Survey, 2015
Business leaders are prioritizing customer experience in 2015
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Personalization is a #1 digital priority
Base 32 eBusiness And Channel Strategy Professionals
Source: Forrester’s Q1 2014 Global eBusiness And Channel Strategy Professional Online Survey
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Personalization in B2B tops the list as well
Base: 526 B2B sellers at organizations in Canada, US, UK, France, and Germany *Base: 176 B2B sellers in the US
Source: A commissioned study conducted by Forrester Consulting on behalf of Accenture and hybris, November 2014
eBusiness leaders
must help
organizations prepare
for the next evolution of
personalization, which will rely more on
the pillars of
individualization, rather
than segmentation.
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Agenda
› The broken state of engagement and personalization today
› Defining the four pillars of personalization 2.0
› Recommended steps for delivering the next wave of personalization
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There is a significant gap between
belief and reality with personalization
Image source: Customer Communications Insights (http://customercommunications.com/)
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of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience.
Base: 4,549 US online adults (18+)
Source: Forrester’s North American Consumer Technographics® Brand Compass Survey, Q1 2015
Image source: (https://imagine.magento.com)
62%
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Organizations today are prioritizing a capability they’re not able to fully deliver
Base: 200 advertising and marketing professionals at organizations with 500 or more employees. US, EMEA, and APAC.
Source: A commissioned study conducted by Forrester Consulting on behalf of SAP/hybris, June/July 2015
91% Of marketers are prioritizing
improving customer experience
through personalization over the
next year.
16% currently have the capability to
capture customer intent and deliver
real-time, behavior-based
marketing across all channels.
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11
Base: 200 advertising and marketing professionals at organizations with 500 or more employees. US, EMEA, and APAC.
Source: A commissioned study conducted by Forrester Consulting on behalf of SAP/hybris, June/July 2015
Image Source: https://www.youtube.com/watch?v=u-6hRFssmbc
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Organizations too quickly check the box on delivering “personal” experiences
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Other Products
Personalization today is often driven by single data point segmentation
Me
Product
Product
Segmentation
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Other Products
Personalization today is often driven by single data point segmentation
Me
Product
Product
Segmentation
Personalization based
on segmentation fails to
deliver on its promise
with most of your
customers.
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As a result, most companies mistakenly believe they are delivering personalization
Base: 1,200 consumers(18 and older). 200 advertising and marketing professionals at organizations with 500 or more employees. US, EMEA, and APAC.
Source: A commissioned study conducted by Forrester Consulting on behalf of SAP/hybris, June/July 2015
66% rate their efforts at
personalization at
“very good” or
“excellent”
31% companies are
consistently delivering
personalized, cross-
channel experiences
40% most promotions don’t
deliver anything of
interest to them
Marketers Consumers
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Agenda
› The broken state of marketing and personalization today
› Defining the four pillars of personalization 2.0
› Recommended steps for delivering the next wave of personalization
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Q1: How successful are you when you
get personalization right?
Image source: StaticFlickr (https://c1.staticflickr.com/)
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Q2: How successful would you be if you
got personalization right more often? Image source: StaticFlickr (https://c1.staticflickr.com/5/4036/4420875996_a354a88130.jpg)
Q1: How successful are you when you
get personalization right?
But before we begin . . .
Image source: (https://extrasport.be)
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You cannot truly personalize experiences for customers if you cannot recognize them
Image source: Blog Cabin (https://blog.kabinata.com)
Prerequisite: The ability to recognize your customer, regardless of device or channel
Image source: Zona IT (https://zonait.tv/)
> Customer data = > Effective personalization
Source: Zona IT (https://zonait.tv/file/2015/06/META.jpg)
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The transaction with the customer must be their information in exchange for value
Base: 1,200 consumers(18 and older). 200 advertising and marketing professionals at organizations with 500 or more employees. US, EMEA, and APAC.
Source: A commissioned study conducted by Forrester Consulting on behalf of SAP/hybris, June/July 2015
70% of consumers are aware that
companies use personal
information to send them
targeted offers.
Data Value
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Customer data under a single database improves personalization capabilities
Base: 1,200 consumers(18 and older). 200 advertising and marketing professionals at organizations with 500 or more employees. US, EMEA, and APAC.
Source: A commissioned study conducted by Forrester Consulting on behalf of SAP/hybris, June/July 2015
Image Source: https://pixabay.com/en/computer-database-network-server-156948/
# of
customer
databases
Data is useful for
creating single view
of the customer 52% 70%
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An individualization strategy is defined by key technology investments that enable
four unique characteristics and differentiate it from a segmentation strategy
Image source: (https://http://media2.trover.com/T/53bf5905d809d82508000388/fixedw_large_4x.jpg)
1. Customers are identified and treated as a segment of one using rich customer profiles.
Image source: (https://http://media2.trover.com/T/53bf5905d809d82508000388/fixedw_large_4x.jpg)
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2. Customer data is assessed in real-time and dynamically calculates intent. Image source: OnPoint DMS (http://www.onpointdms.com/)
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3. Personalized content is delivered equally across every screen and channel.
4. Connected back-end systems enable seamless experiences across the enterprise.
Image source: WallpapersCraft (https://wallpaperscraft.com/)
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It’s easy to think about personalizing experiences in ways we’ve done before
Me
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Individualization is about creating personal experiences across your ecosystem
Call center
Text messages
In-store online access
Online content
Social engagements
Direct mail
Mobile web
Web search
Apps
Online checkout
Retargeting
Associate engagement
Chat
Virtual agents
Smart TV
PLPs
Homepage
PDPs
Packaging
eReceipts
Digital signage
Product reviews
Site search
Outbound calling Me
Evolution…not Revolution
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Individualization is enabled by a system of unique characteristics and capabilities
Segmentation Individualization › Experiences are determined primarily by a low
number of data points that are compared to
other customers
› Engagement technologies use static/batch
processes to create rules-based models
› Engagement models rely solely on past
behavior to understand intent of the customer
› Screens, channels, or technologies are
operating in siloes due to disconnected
customer data access or lack of sharing data
between systems/vendor solutions
› Experiences are determined primarily by the
customer’s data and used to engage them as a
segment of one
› Engagement technologies capture, measure,
and assess dynamically and in real time
› Engagement is based on current behavior of the
customer in the context of his/her past behavior
› Personalized experiences are seamless across
screens, channels and - most importantly - the
digital touchpoints and technologies that exist
across the enterprise
Be careful to understand and respect personal boundaries
Source: Soul Mate of the Moment (https://soulmateofthemoment.files.wordpress.com/)
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Agenda
› The broken state of marketing and personalization today
› Defining the four pillars of personalization 2.0
› Recommended steps for delivering the next wave of personalization
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Recommendations
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Recommendations 1. Identify the gaps in your company’s ability to deliver
individualization.
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The North Face learns the “why” of customers shopping instead of the “what”
Image source: https://www.fluid.com/news/the-north-face-ibm-and-fluid-launch-new-interactive-shopping-experience-using-artificial-intelligence-ai
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Recommendations 1. Identify the gaps in your company’s ability to deliver
individualization.
2. Take off your eCommerce blinders and consider every
part of the customer journey.
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Sephora captures in-store engagement through digital, personal experiences
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Recommendations 1. Identify the gaps in your company’s ability to deliver
individualization.
2. Take off your eCommerce blinders and consider every
part of the customer journey.
3. Design each digital touch point to both use and collect
customer data.
© 2015 Forrester Research, Inc. Reproduction Prohibited 55 Image source: http://www.engadget.com/2015/10/01/starbucks-app-uk-mobile-order-pay/
Starbucks app is not for payments, it is a customer data capturing machine
Image source: http://www.engadget.com/2015/10/01/starbucks-app-uk-mobile-order-pay/
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Recommendations 1. Identify the gaps in your company’s ability to deliver
individualization.
2. Take off your eCommerce blinders and consider every
part of the customer journey.
3. Design each digital touch point to both use and collect
customer data.
4. Leverage partnerships with digital experts.
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Nordstrom expedited digital transformation by partnering with Shoes of Prey
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Recommendations 1. Identify the gaps in your company’s ability to deliver
individualization.
2. Take off your eCommerce blinders and consider every
part of the customer journey.
3. Design each digital touch point to both use and collect
customer data.
4. Leverage partnerships with digital experts.
5. Focus on creating great customer experiences and
avoid crossing boundaries unnecessarily.
Hudson Bay captures personal information in exchange for value without being creepy
http://www.thebay.com/webapp/wcs/stores/servlet/en/thebay/content-view/true-fit#
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Personalization Maturity Checklist 1. Identify the gaps in your company’s ability to deliver
individualization.
2. Take off your eCommerce blinders and consider every
part of the customer journey.
3. Design each digital touch point to both use and collect
customer data.
4. Leverage partnerships with digital experts.
5. Create exceptional customer experiences without
crossing personal boundaries unnecessarily.
Personalization done right doesn’t look like personalization…
Image source: http://earthcarwash.com/wp-content/uploads/2015/01/Happy-Customers-resized-600.jpg.png
Personalization done right doesn’t look like personalization…
Image source: http://earthcarwash.com/wp-content/uploads/2015/01/Happy-Customers-resized-600.jpg.png
…it just looks like a great experience.
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For a deep dive into today’s discussion…