Personalisation is becoming of growing importance for marketers to effectively reach and engage an audience. However, just 15% of retailers at the World Retail Congress 2017 had implemented a personalised marketing initiative.
According to research from Periscope By McKinsey, most retailers and brands agree that personalised ads and promotions can boost consumer store visits and sales. However, only a minority have actually taken the necessary steps to boost personalisation.
The survey among retailers found that 95% of them believe personalisation to be a strategic priority for their business, with 64% considering it a top three priority.
Whilst only 15% had actually implemented personalised measures, 43% said they planned to boost their efforts in 2017/18.
Almost half (46%) of retailers believe that personalisation is a good way to offer a more customer-focused approach, whilst 36% see it as a necessity in order to keep up with consumer expectations and demands. Another 10% believe it may enable them to manage their marketing budgets more efficiently.
Brian Elliott, Managing Partner of Periscope By McKinsey, explains:
“Many retailers are still in the early stages of experimenting with personalised marketing. As such, they are only beginning to see the impact this is making to their businesses. Our own experience shows that there are both short and long-term gains to be made in both performance and health. For example, retailers can expect to see more efficient marketing and cost savings, alongside increased customer retention and revenue, personalisation can also play a key role in generating a larger customer base that is more engaged and satisfied with their brand experience.”
Retailers are aware of the opportunity at hand. 15% said that personalised ads (versus mass promotion) drove additional revenue increases of 100-300%, particularly in new customer conversions. 41% noted a high impact on their revenue streams (50-100%), especially within cross-sell conversions.
The majority of respondents (80%) said that personalised promotions had a direct impact on the volume of consumer visits they received and 59% noted a 25-50% jump in visits.
Among the channels most utilised by retailers for personalised ads are Social Media (74%) and email (74%), as well as app push messages (51%) and direct mail (30%).
However, a mere 17% of retailers have implemented a personalisation software suite. 67% are collecting and synthesizing data whilst 67% also admitted to not having the right tools for personalised offers. 41% of respondents found that the right solutions partner could create a challenge for their business to drive personalised ads.
Automation is a big factor when it comes to personalisation. Two-thirds of retailers said that their content management system was the technology they relied on to manage creative assets, followed by automated campaign management systems (56%).
Elliott adds that the switch from mass marketing to personalisation can be difficult.
“The key to success is being able to bridge the gap between data and creating an automated near real-time environment. In addition, to have impact on the customer journey, promotions must be both journey context relevant and delivered quickly after a trigger is detected, before the moment is gone. To this end, we work with retailers globally to overcome their data integration and technology challenges with our personalisation solutions. Helping them to adopt more agile ways of working within their marketing teams to multiply the number of personalised offers and customer relevant triggers to enhance customer experiences.”
These findings suggest that although many retailers are inclined to improve their personalisation strategies, actual implementation efforts are lagging behind.