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Personalized User Journeys
By Kevin Jackson Global Sales Director
Gravity R&D 12/15/14
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Omnichannel and Retail 2.0
Omnichannel can be defined as the seamless customer experience across all platforms.
Today, these platforms include brick & mortar, PC, tablet, mobile, and now wearables.
The importance and emergence of omnichannel is directly related to the dramatic rise
of “web impacted” retail. Forrester Research has recently estimated that “this year,
52% of all U.S. retail sales will be influenced by, or occur online.1” Web impacted
retail is forecasted to grow significantly not just in the U.S., but in markets all around
the world as the lines between offline and online cease to exist.
The fusion of online and offline activities is a big part of the transition from Retail 1.0
to Retail 2.0, which involves “enhancing consumer engagement within brick and
mortar, moving beyond simply blending in the online and the mobile experience, all
driven at the heart by sophisticated big data tools that truly enable contextual,
personalized and real-time conversations between brands, retailers and consumers.2”
Many people believe that retail stores fall victim to “showrooming”, where people
view items in-store and then later buy them on-line. In reality, it is actually
“webrooming” that is more prevalent as people research items online and then buy
them offline. The truth is that the game has changed for brick & mortar and online
stores, and both must adapt to meet the needs of the modern consumer. The
personalized user journey is a strategy designed to help your business take advantage
of the opportunities that our connected world is now offering.
Moments of Truth (MOTs)
Procter & Gamble has done an enormous amount of research on how to influence
MOTs. The explosion in the number of mobile devices in recent years has created
both opportunities and challenges for companies like P&G. The expectations of
younger demographics can no longer be met with flashy in-store signage. The
creation of a loyal customer now require modern, real–time solutions that are
personalized and localized.
1 Forrester Research Web-Influenced Retail Sales Forecast, 2012 to 2017 (US) 2 Retail 2.0: the convergence of wearables, iBeacons and big data: Gigaom Research mobile report, Aditya Kaul, 4/29/14.
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In order to illustrate how MOTs work, let’s now consider the example of Greg
Perkins, who is 27 year old marketing manager looking to buy a new camera.
MOT 0: This MOT was coined by Google and refers to how the consumer first goes
online to collect information to support a possible purchase. Sure enough, Greg surfs
around on the Internet and finds a few cameras that he likes using his iPad.
MOT 1: Greg bought his iPad from the electronics store Social Digital, and was quite
satisfied with the price and service. He goes to the Social Digital site using his laptop
and starts looking at cameras. Suddenly, Greg gets a personalized recommendation
for one of the cameras he is interested in. The offer is too good to pass up and Greg
buys the camera based on the recommendation made by Social Digital. MOT1 was
heavily influenced by the right offer at the right time to the right person.
MOT 2: Social Digital is now promoting their new app and Greg has installed it on
his phone. The app allows Greg to choose what products he would like to receive
offers for, and Greg selects a few items that are on his wish list. As Greg is walking
through a shopping mall, he receives a notification on his phone from a nearby
iBeacon about a flash offer for a smart watch. Greg has been thinking about smart
watches and buys it online using his mobile phone. He then walks to the Social
Digital store located in the shopping mall and picks up his new smart watch.
MOT 3: Social Digital continues to learn more and more about Greg across all
platforms and gets him to join their loyalty program as well. Greg is now a loyal
customer and thinks of Social Digital first when considering buying any electronics
products.
iBeacons, MOTs, and Big Data
Brands like P&G are taking notice of iBeacon technology and how it can be used to
significantly affect MOTs. iBeacons are small devices that broadcast a
BluetoothSmart radio signal to trigger alerts or messages on consumer phones.
The key benefits of iBeacons include:
1. Accurate indoor location. Wifi and GPS are ineffective indoors.
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2. Venue and application specific. 3. Users can choose what notifications to receive or none at all. 4. Passive, and not active approach. No scanning or tapping required. 5. Hardware is cheap and low maintenance.
Once iBeacons are installed, they can also serve up useful data such as where customers enter and leave selected areas, how they found these areas, and how long they stay in these areas.
Imagine a shopper staring a wide selection of wines. Suddenly, this shopper receives a
personalized offer from Hilltop. This offer was able to influence the Moment of Truth
as the Hilltop wines became instantly differentiated from the rest.
The microlocation data provided by the iBeacon is combined in real time with Big
Data to:
1. Contextualize and personalize marketing campaigns using real-time data.
2. Enhance and enable omnichannel retail capabilities by integrating online and offline data sets.
3. Identify the most valuable customers and improve brand loyalty. 4. Provide intelligence on viability and success of online and offline retail
channels. 5. Provide predictive analytics capabilities forecasting customer buying
patterns.
Delivering the right offer, to the right person, in the right place, at the right time, on
the right device is also referred to as proximity marketing. The recent Forbes article
entitled, “How Proximity Marketing Is Driving Sales 3 ” provides analysis and
evidence regarding how proximity marketing will “close the last gap between the
customer and the register.”
According to Ninth Decimal, a mobile audience intelligence company, targeted,
personalized offers are strongly correlated to higher conversion rates:
3 How Proximity Marketing Is Driving Retail Sales, Forbes, Greg Petro, October 8th, 2014
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• 53% of consumers are willing to share their current location to receive more relevant advertising.
• 57% of consumers are more likely to engage with location-based advertising. • 62% of consumers share local deals with friends. • 63% of consumers feel a coupon is the most valuable form of mobile
marketing.
The Chief Marketing Officer of MyBuys, Daniel Druker, commented in a recent
interview, “Our data shows that marketers who fully implement a customer centric
strategy can generate 15%-25% higher sales and improve customer lifetime by up to
500%.4” Omnichannel, Retail 2.0, Moments of Truth, and proximity marketing all
point to the same thing: UX = ROI. Enhancing a user’s experience with more
personalization and relevance is strongly correlated to higher conversion (ROI).
Personalized User Journeys In this paper, we have established that due to the rapidly changing habits of
consumers, a seamless experience across all platforms is critical to success. We have
also shown that the Internet has a huge influence over the entire retail industry, both
online and offline. Microlocation data from iBeacons now allow personalised offers
and content to be delivered to the right person, in the right place, at the right time, on
the right device.
One-size-fits all, mass marketing is still used in markets all over the world. It is
commonplace to see the same advertisement slapped on every available outdoor and
indoor advertising space with little regard to what is actually happening in these areas.
The strategy of mass advertising is to create an overall brand awareness so that people
will see so much of the brand that they will feel compelled to buy it. The world has
changed, however, since the days where the Marlboro cowboy was a part of almost
every city’s landscape. Younger demographics now demand a different dialogue; one
that is interactive, relevant, and personalized. Now, with the help of microlocation
data, we can deliver these recommendations to people at precise times and locations.
4 “22 Retail Executives Share Technology Predictions for 2014Retail Touch Points”, Retail Touch Points
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Online Stores Plant Virtual Flags
In addition to personalizing content for specific people, what about customizing
content for individual microlocations? For example, an online retailer might place
iBeacons around athletic stadiums or crowded public areas that host sports activities.
For these microlocations, they would broadcast personalized offers for items related
to sports. iBeacons placed in areas where lots of young people hang out would
broadcast offers for products that have proven to be popular with these demographics.
Finally, iBeacons can be placed in the areas outside of brick & mortar stores to alert
people about online deals before they even reach an offline store.
Personalizing content for locations and then for the people in those areas leads to
higher degrees of relevance, conversion, and customer loyalty.
Brick & Mortar Areas of Influence
Physical stores can no longer be satisfied with controlling the real estate under their
rooftops. As we have just described, competition for consumer dialogues is happening
well before consumers are able to reach the front door. Deploying iBeacons in areas
around bricks & mortar stores is one way to establish a personalized communication
with consumers and take advantage of impulse buying habits. In our fast moving
world, people have less time for shopping and value convenience highly. Due to the
rise of m-commerce and the desire to receive products quickly, iBeacon notifications
can be used to allow people to see an offer, purchase it with their mobile phone, and
then go to the nearby store directly to pick it up. No more check out lines, just the
right product in the shortest time possible. This is a decided advantage that brick &
mortar stores have over online retailers and the reason why Amazon recently signed
the lease for opening a store in Manhattan.
Conclusion We are living in extraordinary times where our world is changing faster than many of
us are able to realize. Businesses in all industries must adapt themselves to a world
where people are empowered with real-time information and require personalized user
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experiences in exchange for their loyalty. Omnichannel is no longer a choice and
delivering seamless experiences across all available platforms is mandatory. While all
of this may sound like bad news for businesses, this is far from the truth. Enabling
personalized user journeys may be a challenge, but it is also a huge opportunity and
one that can lead to substantial financial rewards.
Since Gravity is one of the world’s leaders in machine learning and recommendation
engines, we can help clients to realize the opportunities of omnichannel and proximity
marketing activities and avoid the pain points. While the omnichannel can build a
loyal customer base, a poorly executed omnichannel plan can send customers running
into the arms of competitors. The transition to Retail 2.0, however, is well under way
and consumers are not giving businesses a choice in the matter. The customer is king
and their expectations are high. The personalized user journey is not about how
consumers behave online, but rather about how online affects the entire lives of
consumers.
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About Gravity R&D
Gravity R&D was founded by a team of data scientists who entered the Netflix open
competition in 2006 to create the best collaborative filtering algorithm to predict user
ratings for films. In 2009, Gravity was a part of the group that tied for first place. This
was quite an achievement given that there were more than 44,000 submissions from
more than 5,000 groups.
Gravity has gone on to become one of the world’s leaders in machine learning and
recommendation engines and currently provides services to clients like Dailymotion,
P&G, RCI (part of the Wyndham Group), Schibsted and Naspers.
About the Author
Kevin Jackson is the Global Sales and Marketing Director for Gravity R&D and can be reached at [email protected].
Contact Us
To learn more about how Gravity R&D can help your organization harness the power of personalized user journeys, please go to www.gravityrd.com.
12/15/14