Retailers can make personalization work
More often than we see good examples of personalization, we see the bad. There are countless examples across social media of customers experiencing companies that are missing the point when it comes to personalization.
Take this Amazon.com customer for example:
Dear Amazon, I bought a toilet seat because I needed one. Necessity, not desire. I do not collect them. I am not a toilet seat addict. No matter how temptingly you email me, I'm not going to think, oh go on then, just one more toilet seat, I'll treat myself.
— Jac Rayner (@GirlFromBlupo) April 6, 2018
Obviously, this customer bought a toilet seat as a one-time purchase out of need rather than desire. This is just one example of personalization gone wrong, which explains why so many companies have a difficult time developing and implementing a successful strategy.
But personalization is not a lost cause. The most successful companies understand that personalization is at its core a data problem. Spotify, the leader in music streaming, pays close attention to how their customers use its service, creating data driven personalization.
Spotify can plug the data on the songs subscribers listen to into an algorithm and generate a personalized playlist of new music for the user every week. This feature, called Discover Weekly, drives deeper product usage by solving the challenge of finding new music in a highly personalized fashion.
As customers listen to these playlists and indicate their preferences by skipping some songs and repeating others, the personalization flywheel kicks into full gear and Spotify can improve playlists week after week. These engagement-based improvements lead customers to be deeply attached to the brand and create a significant churn barrier.
In retail, Vans creates personalization through its Vans Custom program. Customers are given the opportunity to create their own product, customizing style, design, color and material via an online portal on the Vans’ website. This drives fierce brand loyalty while putting the customer in charge of the personalization, thus avoiding many of the issues we see with traditional personalization approaches.
DISCUSSION QUESTIONS: What’s holding back better personalization efforts by retailers? Can you name another example of a retailer, brand or other service doing personalization well and what lessons they offer?