Getting Personal: How AI-powered personalization is helping retail bands stand out from the crowd

The future of ecommerce is filled with opportunity for those investing in the right long-term strategies today, however, it’s often difficult to see the wood through the trees when it comes to project prioritisation and focus.

With one in every five pounds spent with UK retailers now being spent online, experiences and brand are oftentimes the only way brands can differentiate away from the supply chain behemoth that is Amazon.

Mobile is another key driver for ecommerce growth, with Black Friday 2019 mobile revenue expected to surpass that of the desktop for the first time. However, our research has shown that 63% of shoppers currently only shop with two to five different brands. So what are the levers that retailers can use to drive loyalty, engender trust and stand out from the crowd?

With Netflix, Instagram and Spotify driving the digital experience agenda, customers have now come to expect brands to know them and to show them relevant products and services throughout their user journey, no matter the channel.

Tastemakers vs. logistics

The first thing to understand is that not all retailers are the same. Benedict Evans, Partner at Andreessen Horowitz, in his talk “The end of the beginning” splits them into two categories: retail as logistics and retail as a tastemaker.

Retail as logistics is best encapsulated by Amazon who has gone from relatively humble beginnings to holding a significant share in nearly all retail categories. In fact, recent research from Mintel shows that 90% of UK shoppers now use the retail giant. With its Prime service offering next or even same day delivery on an increasing number of items, there are now few retailers who can compete with them on logistics. For customers who want to get things, as quickly as possible, with as little time and effort expended – Amazon have perfected the solution. While some brands have raised their game to keep pace, many have opted to simply list their products on Amazon in order to allow customers to benefit from its speedy delivery times.

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There has however been some trepidation from ‘tastemaker’ brands whose customers value brand experience over convenience. After all, logistics is just one element of the customer journey, so why run the risk of diluting the experience you offer customers by handing over control? Many brands feel that the only sure-fire way to safeguard brand experience is to own the end to end experience and sell directly. But what experience can they offer that will trump convenient delivery and encourage return purchases?

For example, if you want to buy a gift for your partner, or are in the process of booking a holiday – then actually you care more about quality than the convenience. You want to know what you are getting is just right. You might want to be inspired, or to be given support in finding the item that is just for your needs, and even more you might care a lot about the quality and after-care that you are going to receive.  

For tastemaker brands, in particular, using customer knowledge to provide personalised experiences is the key to offering something more valuable than fast shipping. Whether online or offline, whatever the channel of engagement, the experience has to be synonymous with the brand itself. This is where artificial intelligence (AI) and machine learning (ML) comes in.

Combine personalisation with brand experience

Personalisation isn’t just about inserting a name in an email or simple product recommendations. The latest AI and ML models are now being used to increase the relevancy of online personalisation to an audience of one. Qubit has built numerous models, that when used in combination (model-stacking, so-to-speak), can build customer loyalty. These include the propensity to purchase, lifetime value predictions, category preferences, demand prediction, product recommendations and more.

On their own, these personalisation models are useful, but the real magic happens when you combine them with content, products or offers to create relevant and engaging brand experiences. For the customer, the brand experience is simple and intuitive, but in the background, it’s much more complex, with multiple models working together to show highly targeted information.

A good example is what Chemist Direct does for customers looking to replenish previously purchased products. Using AI technology it can predict when an individual is about to run out of a particular item, and based on those timings, a notification is fired when they return to site highlighting that they should stock up. The experience is relevant, timely and personalised.

The ultimate gold standard here is to enable a team to operate at speed in building, deploying their own models, in such a way that they can build iteratively, stack multiple models together, and couple that with a brand-curated experience that not only delivers for the customers, but also impacts the relevant business outcomes.  However, for many that is a big ask from where they are today.

Internal collaboration is key

For tastemaker brands to succeed with personalisation, they need to think differently to companies focused on logistics and fine-tuning the supply chain. Tastemaker brands need to have full coordination and alignment with cross-functional teams to merge different expertise, and data from across their business. This might involve standing up a specific ‘team’ who are responsible for the customer journey, and can coordinate with channel-centric or data-centric departments. For example, the River Island personalisation program spans multiple people in multiple teams - see here.

This way they can make the most of all the various data sources available; and ensure it is integrated within their existing processes. Each different team, be it the product, data science, web development, e-commerce, marketing or merchandising teams, different people bring alternative and relevant perspectives to the table.

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With the right data, the ability to segment, predict and add context to experiences is made so much easier no matter the sources you are using to personalise. Thankfully platforms exist that can bring together these different skill sets and data points, therefore leveraging cross-functional, full-stack teams to provide the most contextually relevant experiences on any channel.

The path to personalisation

Personalisation for tastemaker brands is essential and customers are now expecting it. For many of the most successful brands, personalisation is a strategy that can help solve some of their biggest business problems. The combination of a consistent strategy, world-leading technology and the right team dedicated to personalisation is enabling tastemaker brands to differentiate.  

Not all brands are at a stage where the most advanced forms of implementing personalisation are relevant today. This is why we recently launched a new tiered product portfolio which has been designed to provide the building blocks for businesses to start modernising, accelerating and transforming their strategies whatever step of the personalisation journey they are on.