How Personalization Trends are Transforming Retail Marketing

It’s no secret that personalization is a huge part of the modern retail landscape. Personalization products contribute to a great customer experience. One study reveals that 9 out of 10 marketers now use personalization solutions to provide better shopping experiences.

Despite the fact everyone knows the importance of personalization, many businesses still don’t truly understand how it works or how to implement it. Let’s take a look at why personalization is important now and the future of personalization for what’s coming next.

What Is Personalization in Marketing?

Personalizing the customer experience has been rumbling through every industry globally for years now. Consumers are choosier than ever, and there’s simply more competition for business.

And thanks to the adoption of digital tools leveraging personalization, this is what many customers have come to expect. In fact, 80% of consumers are more likely to purchase from a brand when the experience is personalized. They’re unwilling to be treated like everyone else.

What’s more, personalization is necessary to cut through the noise and deliver relevant information to your customer. At its simplest level, personalized marketing is delivering personalized content to individual customers to promote a brand’s products or services.

For example, Amazon gives a different set of recommendations to shoppers based on their previous purchase and browsing history. But true 1:1 personalized marketing is more than this. It’s connecting with the individual throughout their customer journey. It’s about sales, sure, but it’s also about customer experience.

To implement personalized marketing, businesses need the right technology to both ingest and leverage data — meaning you need to be able to sync with available data sources and then use that data in an effective way to speak to your customer.

Personalization solutions vary in complexity, but for all of them, data is the cornerstone.

Luckily, data is more available than ever before, despite restrictions over third-party data. (This simply makes first-party data all the more important.)

The Rise in Personalization

All personalization trends are based on consumer demand. Over the past decade, the way customers make their purchasing decisions has influenced the rise of personalized experiences.

Nobody likes to feel like a number. They don’t want to spend hours browsing for the right product or service or have to repeat their problem to five customer service reps.

Let’s take a look at the popularity of personalized experiences:

  • 91% of consumers are more likely to shop with brands that give them personalized offers and recommendations.
  • 60% of millennials claim that they would give up their personal data to receive tailored recommendations.
  • 52% of shoppers now assume that offers and brand messaging are personalized.

Consumer sentiment alone should demonstrate why personalization is important in the 2020s. This preference for personalization from brands is even stronger among Gen Z, where 74% show an interest in personalized products. Successful commerce is about figuring out what your target demographic wants and then giving it to them.

Of course, just because someone says they’re interested in tailored messaging doesn’t mean that it directly translates into bigger profits.

Let’s look at the experiences of businesses and marketers in providing personalization as a service.

  • 97% of marketers said their personalization efforts saw an increase in business outcomes.
  • 25% of marketers saw a spike of more than 20% when they invested in personalized messaging.
  • 63% of marketers claim that after personalizing their customer experiences, they experienced better conversion rates.
  • 50% of businesses say that tailored email marketing campaigns drive better engagement rates.

The fact is that businesses that have invested in the future of personalization have generated real results. And that’s not just at the beginning of the customer journey when you’re targeting prospective buyers. These days, you’ll find tailored messaging at every step of the sales funnel but also for onboarding, retention, customer service, cross-selling and brand advocacy. And that personalized marketing content is now omnichannel, distributed via email, video, apps and more.

Surprisingly, while the adoption of personalization technology (or personalization technology for our friends in the U.K.) is growing, it’s still not used by most businesses, and many companies use it incorrectly. For example, many online retailers fail to push personalized product recommendations via email marketing.

But for businesses that are willing to invest in the latest personalization trends, there’s a tremendous opportunity to gain an edge over your competitors. We’ll dig into this some more below.

6 Personalization Trends Dominating the Marketing Landscape in 2022

As marketers, it’s easy to get excited by trends and the latest and greatest idea on the market. But looking at trends also helps us understand how consumer interests are shaping brand behavior. What they want drives what we create — especially in the realm of content marketing.

So while we’re not saying to add every trend below to your marketing mix, it’s helpful to know what’s current and what’s coming. Here are the personalization trends impacting the marketing landscape now and in the future.

1. Increasing Cross-Department Collaboration

In the past, marketing was confined to the marketing department, but a major personalization marketing trend will see departments collaborating on a deeper level.

Product engineering is a crucial aspect of delivering a personalized solution to customers. Organizations are streamlining themselves in creating the overall experience.

To successfully execute collaborative strategies, managers need to clearly define the responsibilities of not only each department but each team member within those departments.

Without everyone being on the same page, the customer experience will suffer when investing in custom, unique buying journeys.

2. The Rise of Machine Learning

The engine that drives personalization is data. Gathering, processing and analyzing millions of data entries cannot be managed manually. Enter machine learning.

Organizations are now relying on machine learning to offer personalization solutions on a deeper, more meaningful level.

Machine learning enables users to be served with the best recommendations and variations. Expect this trend to continue to rise as businesses become more comfortable with adopting this kind of technology.

3. Bringing the Digital Experience to Brick-and-Mortar Retailers

One of the greatest challenges faced by retailers is how they can provide a personalized experience in a physical location. Even though ecommerce has taken off in the last several years, brick-and-mortar stores serve an important role for many shoppers.

Customers have shown that they still want to try on clothes in person. They’ve also demonstrated enthusiasm for attending curated events. To leverage the power of digital experiences, retailers are increasingly looking at digitizing their physical premises for a custom shopping experience.

There are endless opportunities to enhance the in-store experience in this vein. Amazon Go is one, but adding a personalized chatbot solution to your store is another. (More on chatbots below.)

4. Connecting Online and Offline Commerce

It has long been an ambition of businesses to be able to bring their online and offline experiences together. Only now has that become possible, and it’s dominating the tailored marketing landscape.

Organizations want to be able to connect with users across all touchpoints. Previously, smartphones have been the major touchpoint, but businesses are thinking of new, innovative ways to connect online with offline.

Some examples of touchpoints include Internet of Things (IoT) devices and special kiosks.

But what’s the point of connecting in this way?

To put it simply, bringing various data points together allows for a more seamless experience. What’s known as experience optimization is now at the heart of crafting the customer experience. This is the trend that is completely transforming the way customers interact with brands.

5. Investing in Marketing Tech

Everyone talks about the trends in marketing, but the challenge that often goes overlooked is how to deal with the complexity. Providing personalization as a service is infinitely more complex than a standardized promotional campaign. For that, technology is the answer.

Right now, the problem is a complete lack of solutions aimed at small businesses. Not everyone is particularly tech-savvy or has the team to manage their tech stacks. But that’s all about to change.

Organizations are increasingly investing in their tech stack to deliver memorable customer experiences with state-of-the-art personalization technology. Smaller businesses, in particular, will start looking at all-in-one solutions that allow them to consolidate their tech stack.

6. Personalizing for Anonymous Users

Online privacy is a huge issue for modern customers. Approximately 50% of U.S. Internet users are seriously concerned about online privacy.

Online shoppers are increasingly turning to solutions that enable them to remain anonymous. It’s also become a significant personalization trend because businesses are coming up with creative solutions to personalize the experience for these anonymous users.

While there’s no way to provide the same level of customization for an anonymous browser, it’s still possible via using the limited amount of data you have. Some examples of this include:

  • Changing country currency
  • Tailoring based on how they visit your site
  • Using a visitor’s location

The trend to unmask anonymous users and harness the effectiveness of personalization is currently a priority for businesses that have invested heavily in custom experiences.

The Future of Personalization: Technology Solutions for Modern Marketing

Technology is what makes a tailored experience possible in the first place because it’s entirely based on available data. The future of personalization is an exciting one as solutions become more advanced and their capabilities increase.

Here are some of the intriguing technology solutions organizations are using to transform their marketing campaigns.

Augmented Reality

Augmented reality is already a feature in a limited number of stores across the country. Powered by AI, the Dialogflow platform is already used by Covergirl to allow people to virtually try on clothing.

A customer chooses the item they wish to try on, and augmented reality will change the customer’s virtual image to make it look as if they are wearing the product. This can give shoppers an idea of how they might look when wearing an item, before deciding whether to physically try it on.

In the future, the rudimentary state of augmented reality is expected to advance by providing personalized recommendations based on a customer’s facial features, skin tone, and even emotions as they use these augmented reality stations.

Furthermore, augmented reality can help to personalize the trying-on experience in different environments. For example, if a screen is present a customer could see how their hiking boots look in a selection of mountainous environments.

It may seem like a small thing, but the little touches like these can go a long way to creating a memorable customer experience.

Does this mean the end of the salesperson or stylist? No, augmented reality still requires a human touch, even if it involves picking out the product the customer wants to try.

However, this approach to personalization streamlines the customer experience and quickens the buying journey, which is always an advantage for businesses searching for impulse buys.

GPS Technology

GPS technology has already been implemented by brands like Starbucks and Macy’s to drive tailored offers. By using their apps, they can be set up to automatically send discount codes and special offers whenever a user enters the vicinity of a store.

However, this type of personalization as a service does require the user to consent to enable location tracking. It needs to be presented in the right way to avoid the retailer looking creepy.

After all, who wants to feel as if Big Brother is watching them?

GPS technology will likely also be used within huge retail locations. As the shopper moves around the store, they will receive personalized offers based on where they are and what they’re doing.

In-Store Personalized Product Recommendations

Technology is not going to make the sales associate obsolete. Instead, they’ll use it to ensure they can do a better job.

For example, in-store product recommendations tailored to the customer can help sales assistants to figure out exactly what the customer wants. This is the great challenge of selling. Sales assistants usually need to interrogate customers to figure out why they entered the store in the first place.

Now, a simple app can provide personalized product recommendations based on the available information about the customer. Salespeople can carry these apps and interact with customers to finetune the app’s personalized product recommendations.

Personalized Video Marketing

Video marketing is the most effective form of marketing around, with the highest view, engagement, and conversion rates. And that’s no surprise because it’s the most in-demand form of content. People can’t get enough of it — 83% of consumers say they want more video from brands.

Part of personalizing the customer experience is video marketing designed for a specific customer. But since a video is a static media file, how is it possible to personalize a video?

The answer comes from AI. By using the data of your subscribers, you can create everything from personalized videos to GIFs. Idomoo has created a revolutionary platform to enable brands to create customized videos quickly and simply.

Since videos already have such a high engagement rate, personalizing them will only drive this rate further up.

Empathy in Marketing

The importance of empathy in marketing cannot be underestimated. Relating to a person’s emotions and understanding them is the foundation of what makes a strong relationship.

That’s part of what personalization aims to accomplish. It builds better relationships. Retailers will dedicate more time and resources to building trust through empathetic marketing.

Machine learning is overcoming the barriers caused by the difficulties of building empathy digitally and at scale. As the technology grows in sophistication, better algorithms can understand visual and auditory cues.

In other words, machines can now figure out someone’s emotions based on their behaviors, which can then be used for marketing purposes. Amazon is already a leader in this field through its Echo device.

For example, Echo can now detect someone’s nasal tones to determine whether they have a cold. It will then respond by recommending cough drops or a chicken soup recipe.

Machine learning’s ability to decode human emotion will become critical to how brands personalize your shopping experience.

Shopping Ecosystems for Next-Level Customization

No retailer acts completely independently of its competitors. Take a shopping mall as an example. Every store and restaurant acts as part of the experience before they ever walk through your doors. If someone had a bad experience in one store, they may still be upset about it when they walk into yours.

Brands will begin to focus on the ecosystem in which they exist for a greater level of personalized experiences. It’s all down to the advancements made by AI.
Sales that move through ecosystems remain small in number, but they are expected to grow.

One example of a consumer ecosystem is the home. Smart devices have never been smarter, but they need to work with each other to give consumers the experience they want.

Marketers are going to start thinking about environments first and how their products fit into contributing to a positive environment, rather than the other way around.

Not only will this impact marketing, but it’ll also transform the way products are developed in the first place.

More Intelligent Chatbots

Chatbots have taken much of the strain off of traditional customer service lines. Intelligent chatbots can offer 24/7 support to customers experiencing problems. The issue with many chatbots is that they’re unable to tailor their support to the customer in question.

Text-only chatbots consistently fall short, and people are forced to call a human support agent anyway.

Idomoo is at the forefront of chatbot technology. By utilizing data from the cloud, these chatbots can now produce personalized videos that better serve the needs of customers. Whereas most marketers think about personalization as a service within the context of the buying experience, personalization must extend much further than that.

Wrapping Up

Not every brand has thought about how they’re going to make a unique shopping experience for everybody. But the momentum has firmly swung toward it, which means organizations that want to thrive cannot afford to ignore it any longer.

Personalized experiences can be found at every step of the customer’s journey, and even after they’ve made a purchase, the way you care for your customers remains important.

Idomoo offers several solutions for better shopping experiences. From intelligent chatbots to Personalized Videos for marketing, transform the prospects of your business with our Next Generation Video Platform.

Ready to learn more? Get started with a quick call.

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