CX Spotlight by Fifth Quadrant

The Rising Importance of Hyperpersonalisation in Retail CX

Personalisation, which used to be simply about adding someone’s first name to an email, has been undergoing a rapid evolution over the past few years. Thanks to advances in Artificial Intelligence (AI), big data, analytics, machine learning and mobile devices, the way in which brands reach and communicate with their audiences has changed dramatically. We are now in an era of hyperpersonalisation, a time in which customer experience (CX) is being driven by highly curated experiences for increasingly demanding customers with growing expectations.

The pros and cons of hyperpersonalisation

In a fast-changing digital world, customers are time poor and becoming less inclined to wade through the plethora of channels and retail options available at their fingertips. Simply knowing your name is not enough; Customers now want retailers to understand them, and adjust their products and offerings accordingly. By leveraging the insights provided by the glut of data available, retailers are able to provide customised content, products and promotions based on the habits, location and even mood of the user.

Hypersonalisation is truly a double-edged sword. When it is done right, it can improve loyalty, boost engagement and increase revenues. Just ask Amazon and Netflix – McKinsey estimates that over a third of what consumers purchase on Amazon and three quarters of what they watch on Netflix comes from product recommendations based on data insights. But when it is done badly – it comes off as an invasion of privacy. Let’s face it, in order for brands to better understand you, they need more of your personal data. This can lead to something we have called “the creepy factor”, which we saw in the case of retailer Target figuring out a teenager was pregnant, before her father knew.

The power of the graph

CEO and co-founder of graph database platform Neo4j Emil Eifrem says that retailers must provide consumers with smart, context-sensitive prompts developed using AI and data-driven, real-time software.

According to Neo4j, a graph database is a databse that treats the relationhips between data as equally important as the data itself. In other words, the data is stored in a way that shows how each individual point is connected to or relates to others. “There are no isolated pieces of information, but rich, connected domains all around us. Only a database that natively embraces relationships is able to store, process, and query connections efficiently,” Neo4j says.

Eifrem says that eBay’s ShopBot is a good example of graph-powered hyperpersonalisation. Shopbot is a personalised shopping assistant housed within Facebook Messenger which helps consumers find optimal deals across eBay’s billions of listings. “Context is stored for future transactions, which means that the more customers use Shopbot the smarter it gets. It does this by building a library of data it can quickly cross-reference using the underlying graph database,” Eifrem says.

Eifrem concludes that the importance of personalised and predictive content is rising. “They [shoppers] want hyper-personalised recommendation engines to not only show them what they want, but also help them to discover items that they like and probably would not have discovered themselves,” he says.

Shopbot.image.EbayShopbot. Image: Ebay

With their online focus and interface, Amazon, Netflix and eBay are obvious examples of companies using hypersonalisation to improve CX. But the trend is taking place across the whole retail spectrum, from travel, to fast food, sport and fashion. Here are a few examples.

Travel

EyeforTravel describes itself as a community of commercial, marketing, digital and data experts that are changing the way travel is sold. At an EyeforTravel event earlier this year, VP of products & planning services at Japan Airlines Akira Mitsumasu said that hyperpersonalisation is a new force changing the air travel experience.

Mitsumasu observed that there is shift taking place towards co-production and value co-creation between consumers and brands. This is leading to travellers becoming more willing to share their data - as long as it improves CX. Mitsumasu added that airlines need to do more than move customers from one place to another, they need to think about the purpose of the journey. As a result of this approach, Japan Airlines has come up with hyper-personalised offers including curated ski trips for people with disabilities, a loyalty programme for people who travel with their pets, and tours of regional cities to taste local sake and beer.

3C91DC6A00000578-0-image-a-12_1485532444499Less dangerous than snakes.

Food

Fast food companies have been quick to see the potential of hyperpersonalised offerings. In Australia, major brands such as KFC, Hungry Jack’s, McDonald’s and Dominoes all have mobile apps which simultaneously harvest customer data and provide users with access to customised menus, location and preference-based deals, directions to the nearest store, the ability to skip queues, or the offer of special prizes. The power of these kinds of things is cumulative; the more people use it, the more data is collected and the more sophisticated the algorithms get.

Screen Shot 2018-08-16 at 1.19.09 PM (2)

Sport

In the realm of sport, Channel Islands surfboards has gone to great lengths to provide its customers with a hyperpersonalised experience.  Channel Islands says that early in the development of its website, it identified the goal of creating a “near tactile” experience that would connect customers to their surfboards. Customers can input their height, weight surfing ability and optional nickname and profile picture and then see a variety of board recommendations for them. If they want to take it a step further, customers can build a fully customisable board and adjust every dimension, component and visual aspect of the board. “In the development of the new website, the limits of integration and customisation were pushed into a next-level customisation platform, adaptive to screen size,” Channel Islands says.

Channel Islands

Fashion

Fashion is a natural fit for hyperpersonalisation, as it is by nature a way in which people express their personal identities. Undandy is a Portuguese company that offers the ability to create custom men’s shoes. Similar to Channel Islands, Undandy has a website on which users can design their own handmade leather shoe, customising all aspects of the shoe including the shape, material, decoration, stitching and more. You can even engrave a phrase of your choice on the sole. Although a handmade and personalised shoe would have been a luxury item in the past, a custom pair of Undandy shoes are priced at well under US$300. They haven’t skimped on production either – according to their website, each shoe is made by third-generation Portuguese shoemakers. When it comes to consumers designing their own products, there is an argument for “leaving it to the pros” - feast your eyes on these monstrosities I came up with:

Screen Shot 2018-07-25 at 8.45.53 AM (2)

We are undeniably moving into a world of hypersonalisation. Retailers from across all segments should be looking at how they can leverage AI, big data and analytics to create more personalised and curated experiences that are tailored to their customers.

Fifth Quadrant conducts research that empowers companies to improve their CX. To learn more about how Fifth Quadrant can assist your organisation, contact us today.

 Ready to talk CX? 

 

Brad Arsenault

Written by Brad Arsenault

Brad is the Head of Marketing at Fifth Quadrant. For over 16 years he's worked across digital marketing and content production. He actively publishes content on LinkedIn and Medium.

Topics: personalisation CX Articles & Insights big data

You might also enjoy reading...