Why Most People Are Wrong on Personalization

A few weeks ago McKinsey’s Marketing and Sales practice published “What shoppers really want from personalized marketing.”  It is the best paper I’ve read on the topic in years.

And thank you, McKinsey, for sending it forth. Because “personalization” has become one of those awful clichés of retail strategy – oft-cited, but rarely thought-through or defined.

Especially among retail technologists.

The authors start with the basic value case:  yes, personalization can be a huge boon for retailers and consumers.  Targeted communications that are relevant and useful can create lasting customer loyalty and drive revenue growth of 10-30 percent.

But then – unlike so many others – the McKinsey team asks the hard question:

What — from a shopper’s point of view — are the operative, value-creating definitions of personalization?

To determine the answer, McKinsey studied shopper diaries that described more than 2000 interactions.   As a result (in their words), “we were able to see what kind of personalized communication works for customers and what doesn’t.”

And they came up with five recommendations.  For the personalization that shoppers want.

And you know what?

It’s not about the offers or coupons.

Four of the five had absolutely nothing to do with offers, coupons, or showering shoppers with markdowns.

Instead, the shoppers wanted advice – recommendations for products and services they might not have thought of.  They wanted reminders – of household items needed, or school events, birthdays and anniversaries.

They wanted the advice and reminders at the right time.  When shopping decisions were being made.  (Which means the when of personalization is just as important as the what.)

Moreover, they wanted to be recognized. Not necessarily with a coupon or an offer, but simply, courteously recognized as a returning shopper of past and future value.  Regardless of the channel they shopped.

The big takeaway:

Toss-away the personalization cliché.   Think beyond the coupon.

Visit me on LinkedIn and tell me what you think.


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Jon Stine

About Jon Stine

Global Director Retail Sales at Intel. Jon Stine leads Intel’s global sales and strategy for the retail, hospitality, and consumer goods industry sectors. His CV includes leadership of North American retail consulting practice for Cisco Systems, and a prior stint at Intel, where he founded the company’s sales and marketing focus on the retail industry. His perspective on technology’s value in the industry has been shaped by advisory and project engagements in the United States, across the European Union, and in India, Australia, and the People’s Republic of China, and from 15 years of executive sales and marketing experience in the U.S. apparel industry, working with the nation’s leading department and specialty stores. At Intel, his current areas of research and engagement include the future of the store in this new digital age; how and where retailers turn data into competitive advantage; the role of technology within the new cross-channel shopper journey, and, the critical business and IT capabilities that industry success will demand going forward.