Why Context is Key for Fueling Personalization

In 2012, Digital Trends found that nearly 75 percent of consumers say they prefer to do business with brands that use personal information to customize their shopping experience.

Despite this widespread desire for increased relevance, the majority of brands are still having big issues using personalization consistently due to struggles such as combining multiple data sources and understanding customer behavior. Many marketing teams charged with tackling personalization feel they lack the time and resources to effectively scale and deploy personalized communications in a way that meets the needs of millions of customers. This disparity between brands and buyers results in consumers being inundated with daily promotional emails from tens to hundreds of brands that ultimately leave consumers worn out and ready to unsubscribe.

Acknowledging the consumer demand for more personalized shopping is one thing, but successfully delivering on that demand can be challenging for retailers. According to Gartner, 89 percent of brands plan to compete on "customer experience" within the next year, but less than 10 percent of brands feel they are effectively personalizing. In the increasingly competitive retail ecommerce battlefield, how can retailers determine which move to make in order to deliver a scalable and improved experience?

The short answer is context. By using behavioral and transactional context about your customers, you can enable automated experiences that deliver personalized communications. Here are three tips on how to use context to immediately fuel personalization:

- Act on Abandonment

Quite simply, abandonment occurs any time someone does not complete their intended call to action. For example, purchase abandonment occurs when a consumer begins the purchase process but doesn't convert. In addition, site abandonment represents anyone who visits your website and leaves without purchasing.

A retailer might think that both types of abandonment require the same email experience, but that's not always true. A shopper who adds something to their cart but abandons the site without purchasing should be reengaged in near real-time with an email featuring the specific products they viewed and a clear call-to-action (CTA). For website abandoners, brands should consider automating an email program that reengages these shoppers a day after abandoning and includes the product(s) they engaged with, as well as additional merchandised products based on that engagement.

After establishing these basic but essential programs, retailers can amplify them by adding new elements, such as notifying someone when an item in their cart has dropped in price.

- Pay Attention to Products and Price

Brands can also automate a campaign that recognizes customers who engage with a product multiple times but do not purchase. For example, if a customer continues to visit an out of stock item, the retailer can create a triggered alert to that customer when the item is back in stock. Brands that are collecting behavioral data and retaining it can even create an automated campaign that identifies customers who routinely shop at certain price points. For example, using both behavioral and historical data, retailers can identify customers who appear to only buy products that are on sale. They can then use this knowledge to target these individuals more specifically.

- Bring Personalization to Your Website

Because a consistent customer experience is crucial to conversion and loyalty, retailers can leverage multiple customer behaviors to tie the email and website experiences together. For example, if someone browses a category on your site and then abandons, they should receive a follow-up email featuring the products they browsed with additional potential products of interest. If that customer clicks through an email, retailers can transform homepage assets, like the hero image or ad tiles, to display similar content to what was featured in the email. Tying these experiences together is shown to increase conversion.

Brands that are thriving in the cutthroat retail space are finding ways to automate personalized experiences using technology that uncovers context about customers' shopping experiences. Forrester has called this emerging practice "contextual marketing," which allows retailers to use customer insights to quickly drive relevant and scalable communications.

Successful brands are actually reducing the frequency with which they contact many of their customers, while increasing the relevance of the emails they're sending. When using contextual marketing, brands not only see customers who are less annoyed and more loyal, but also an actual uptick in revenue. In fact, a recent study by Forrester found that retailers using contextual marketing technology can increase revenue by 15 percent and often experience improved conversion rates and repeat business.

Overall, shoppers are eagerly awaiting an increasingly personalized buying experience. Context is the key to success in a currently brutal market where margins are often slim, competition is dense and everyone is trying to keep up with Amazon. With the current state of the retail industry, it's safe to say that the future lies in brands' ability to effectively personalize.

As CEO and President of SmarterHQ, Michael Osborne oversees and assists in business development, investor relations, organizational strategy and growth. SmarterHQ is the contextual marketing technology brands use to drive conversion and loyalty. The company leverages brands' existing marketing technologies, combining real-time behavior recognition with historical consumer data to power email and website campaigns that deliver the relevant experiences customers demand.