The fallacy of personalization, and how’s it’s hurting retail.

modified May 29, 2017 - in

Everyone in the world of retail, e-commerce, omni-channel selling, or whatever you want to call “selling products and services to consumers”, are on a wild goose chase trying to “personalize” the experience and provide the customer what they want. Technology, artificial technology to a large extent, is often considered the holy grail in achieving this result.

In this race for the ultimate personalized experience, Marketing dominates the stage and Merchandising is playing second fiddle. But that’s proving to be a backwards approach, like putting the cart before the horse; many times, putting an empty cart before the horse when expectations fail to meet the reality.

What most are missing is how this hyper focused attempt to reinvent one skill set is diluting and hurting another. More specifically, how marketing is forgetting the role merchandising plays; and how retailers are not focusing enough on their brand and the products and/or services that drive their brand. More often they are over populating their sites with disconnected products, trying to be everything to everyone, assuming “personalization” will parse and present the relevant products as needed. It’s like going on a date with someone and they are trying to impress you by saying they do or like everything you do as you share your personal story. Somehow the sincerity gets lost.

As businesses focus on developing tools providing a more customized and/or personalized experiences, what is happening is the equivalent of putting the cart before the horse. And even if some manage to get the horse out in front, they forgot how to train the horse and it doesn’t know which way to go. In this case, “marketing” is the horse and “merchandising” is the cart. Every retailer needs product, or a cart to pull; and marketing usually does the pulling. But merchandising is quickly being diminished and diluted to where there’s just too much in the cart to pull and little motivation for people to even look inside. All the carts are looking the same and instead of designing a cart that is actually appealing from the outside based on what’s inside, the drive for personalization and providing the right product, at the right time, to the right customer, is creating a homogenized view…everyone is turning right and marching in a vicious circle.

Merchandising is not a science; rather, it’s an art and developed skill that uses science to augment and enrich a presentation.

But personalization, and technology in general, are driving merchants to rely too much on analytics and reactionary planning, over insightful and visionary presentations. Too many retailers are taking the approach, tell me who my customer is and what they want and I’ll go find or make the product for them. Instead of more boldly stating, this is who we are, what we represent, and here is the product within that vision; with that, tell me who you are and we’ll help you build a relationship with our products. True merchandisers, buyers, and visual artists in retail understand how to assemble and paint a picture through a carefully crafted and orchestrated presentation of products; relying on a combination of historical analysis for context, but focusing more on visionary development aligned with the brand message or personality of the business. Customers are then able to understand why they came there in the first place, searching as much for a connection to the brand as to the defining products.

An excellent example of what I mean is found with Patagonia. Customers are more than customers, they are family, they are related, they embrace the brand because it is so very clear what Patagonia represents; the product is just a direct extension of their brand, so customers are searching for ways to enrich their personal story or journey through an array of products over searching for some random one off or unrelated products that happen to fit a in the moment. REI is another good example, and expansion of what a retailer can do versus a wholesaler; with Patagonia being more representative of the later. REI built its business on the personalization of their assortment and presentation over time, across brands, and not in the immediacy of a moment or single online search experience. It took years of relationship building between customer and company, to where the merchants could understand the needs and wants of their customers in a broader sense; and then aggressively build new products and new avenues for customers to engage without a single minded attention on the right product, at the right price, and the right time. It’s more about the right brand experience providing an opportunity for the customer to discover more products in context of their brand experience, over a single product based on a hyper focused personalization algorithm and response.

The fallacy of personalization is too many believe with the right technology and ability to see what the customer is doing and understand their intent at any given moment, they can serve up the right product without first setting the stage with the overall presentation and brand experience. Personalization should be more about building the relationship of the brand with customers so products are a function of the brand identity in context of the customers’ expectations. In too many sites, where the brand message is more about price, value, free shipping, or some other loyalty lacking attribute; customers are searching blindly across sites based on a single motivation, because retailers are striving for immediacy in gratification over sustainability in relationships. We see less companies like Patagonia or REI, where their focus is more about building a relationship with the customer over selling a single product; where they build sustainable sales over the sporadic and disconnected purchases filling too many online shopping baskets.

Retail is just one big block, lined with too many stores and too many doors for any person to reasonably shop; so the emphasis should be on merchandising the products to fit the brand and tell a clear and compelling story. And not on carrying the largest selection or most diverse assortment where price is the primary motivator.

Instead of putting the cart before the horse and discovering the cart is either empty or not filled to a customer’s expectations; invest more time in finding the horse, or the product that will pull the cart. Don’t ask the customer what they want, tell them who you are, what you carry, and why; then work on personalization that builds a story with the brand so customers discover products in context of more general desires over impulsive price driven purchases.

Build an environment to buy, encourage a relationship, not a sale.

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