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Personally Perfect: How Individualized Value Explodes The World Of Retail Potential

a VP ThoughtWorks
There’s no debating that a great experience inside the retail store is a genuine joy. Shopping, whether it’s at a brick-and-mortar store or on an e-Commerce site, can be a lot of fun. But shopping is far from the only joy or challenge in life, so retailers that want to differentiate themselves and delight their customers need to think about the broader context of customers’ lives.

Retailers who see their customers as genuinely three-dimensional people and can act on this rich insight — who customers are, what problems they are trying to solve in their lives, who they are solving these problems with and how they define value — have the opportunity to differentiate themselves in a compelling way. This is good news in a crowded marketplace, because as stores become ever more polished, a fine shopping experience will become an increasingly commoditized customer expectation.    

Really engaging with individual lives requires thinking outside retail’s four walls.  

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Beyond Stick Figure Customers

Since the advent of mass-market retail, retailers have cast customers as groups of one-dimensional stick figures with easy-to-understand needs that fit them conveniently into neatly drawn segments. The modern retail store replaced the custom creations of individual craftspeople with mass-produced products to be sold to as many people as possible. It didn’t matter who those people were as individuals.

The current focus on customer-centricity aims to change that. But even as organizations work to build 360-degree views of their customers, these perspectives are often still constrained within the narrow boundaries of stocking and selling products. Stores or “retail crates” were founded on the efficiencies of scale that came from serving a broad market in roughly the same way. Much of the investment in so-called personalization has been about getting a better fit between unique individuals and the preset choices available to them. These may be good for the retailer but are hardly transformational for the customer.

Even a decade’s worth of purchase history and an up-to-date reading of a customer’s family, home and financial profile creates a stick figure view of someone’s life. This wealth of Big Data has little to say about what next Tuesday morning will look like for them or how their needs shift moment to moment.

“Others who bought this also liked this” recommendations are only marginally better. The mere fact that someone looks at a book on cooking for diabetics is just one data point. What a three dimensional customer genuinely desires will vary dramatically depending on whether she is doing a report for school (“Please help me pass my class”), looking for a gift (“I want to show that I care”), or buying it for my her own use (“I’m worried and really need some support”).    

Personalization Grows Up

Real people’s lives are about more than just buying a thing. They have complex and shifting definitions of value, which demand a deeper kind of understanding. Ultimately, purchases are not about the acquisition of a “thing,” but about the role those things play in our lives:

  • A pair of new shoes is not just shoes. It’s an outfit.
  • It’s not just an outfit. It’s a personal statement.
  • It’s not just a personal statement. It’s your dramatic entrance at an event.
  • It’s not just an event. It’s a memory.

If a retailer’s only goal is to put a coupon in someone’s hand, there is little value to understanding a customer more deeply. However, if retailers are willing to escape the crate and actively involve themselves in each customer’s unique life, then there are almost immeasurable opportunities to create micro-markets of one, each with their own metrics for delight. Success will be driven by the ability to create unique brand experiences, products and services that customers perceive as valuable.

How might narrow retail services be extended? Think about what you might expect from a friend who knows you. That friend might enrich your life by:

  • Curating: Almost everything works with something else. If your friend has a sharp sense of style or in-depth knowledge, she would be the one you seek out to find the right combination for your personal style and life need. 
  • Discovering: Exploration is a highly personal act. A genuine friend would draw on more than your purchase history and a few mobile phone data points to help you discover new possibilities. 
  • Tailoring: Remember the custom craftspeople and tailors of yore? Consider the power of custom crafting what you offer to the individual.

 

Note the common theme with all these strategies: They all are about creating unique improvements in individual lives, and none focus on selling products inside the traditional store.

Real-Time Context: Life In Motion

When you enter a store, time stops. Whether she types a URL or walks through big glass doors, a customer puts her life pause while she shops. This of course can be a good thing, a welcome respite from the bustle of real life. But it also places the retailer in an isolated bubble separate from the real business of living. 

Context produces intense but fleeting needs. They dominate our daily lives and create opportunities impossible to fulfill within the mindset and physical constraints of traditional retail. Choosing to serve these needs grants permission for wild thinking. How about a drone that dips into the traffic jam with your specific coffee preparation? Talk about context-dependent delivery!

Bigger Big Data

For all the terabytes of information that have been gathered, this is still a technology in its infancy. Traditional retail businesses that focus on simple product recommendations and targeted offers provide a small stage for Big Data’s performance.

Personalization and real-time engagement change all that. When retailers engage richly drawn individuals when and where they act, there are enormous opportunities to apply sophisticated and nuanced insights. Big Data can finally strut its stuff:

  • Ecosystems of data: The network of data can grow well beyond the simple tracking of purchase history and personal demographics. Many of these diverse real-time sources will lie outside retailers’ own systems.
  • Real-time thinking: Offer and recommendation-based personalization has relied on offline processing for the heavy lifting. That works fine if your goal is to assign a coupon to a customer. However, real impact comes from assessing context and shaping a sophisticated individual response in real time. Expanded machine learning capabilities will further open the door to dynamic evaluation and recommended courses of action optimized for the specific circumstance and moment in time.
  • Deeper brilliance: Big Data is not just about the data. The real power lies in the ability to choose a course of action that is genuinely appropriate to the moment. More data and richer problems are creating a fertile environment for these more sophisticated and elaborate insights.

People have been talking about a 360-degree view of the customer for some time. Improved analytics and integrated omnichannel capabilities will allow retailers to map customers across their path-to-purchase. In-store beacon technology, coupled with the geo-location on customers’ own mobile devices, will allow retailers to deliver tailored communications and support based not only on their physical location, but also on where they are in their shopping journey. We believe that it is not the 360-degree view that matters but rather a context-dependent view. That is the magic ingredient for a personally perfect shopping experience.


 

Dianne Inniss is part of the ThoughtWorks Retail team, joining from Capgemini Consulting. She partners with clients to design meaningful customer experiences and deliver solutions that generate customer delight, sustainable growth and profitability. When she’s not consulting, she’s dancing to soca or salsa music. Two things she can’t do without? A good Wi-Fi connection and a daily workout.  

Dan McClure is the innovation design practice lead at ThoughtWorks. He likes to blow up the status quo and has spent 30 years as a hands-on practitioner of disruption, designing and applying new innovation practices across multiple industries. 

 

 

 

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