The headwinds facing traditional and online retailers in 2017 are numerous and well documented, says the study by Oracle/Marketing Cloud Chief. Among the challenges is a sustained assault on established business models driven by changing consumer behavior and the competitive might of e-commerce giant Amazon.
Large big-box players are responding to the threat, and embracing the opportunity of e-commerce, by boosting online spending by hundreds of millions or even billions of dollars annually. Yet even the largest and most well-resourced players can’t simply spend their way to success, says the report.
Retailers that want to accelerate e-commerce growth may wish to consider some of what Amazon has done so well. The online retailer, has many strengths, but one area in which it truly excels is delivering personalized communications to its 300 million-plus active customers. Whether it is a product marketed on the site or in a digital message, Amazon knows what its customers like and are most likely to buy.
Despite Amazon’s massive push into personalization, all retailers have an opportunity to win in the personalization game, says the report. While not all retailers can compete with the Amazon Prime offering, all retailers have an opportunity to harness their proprietary customer data to drive better decisions about what products and offers to match with shoppers.
Savvy e-commerce executives already know this, says the report. 68% of all retailers indicated that investment in driving “personalized experiences” is a priority, according to a March 2017 Forrester Research study “Key Retail Tech Investments in 2017.”
And, in the 2017 RIS/Gartner Retail Technology Study, “Increasing Customer Engagement” and “Developing Personalized Marketing Capabilities” ranked as the top-two strategies being pursued by the 100 retailers in the study, 84% of whom reported annual revenues in excess of $100 million.
Most retailers struggle with personalization, says the report. A 2017 study of 131 retail marketers details why. Organizational factors, limited access to data, integration challenges, a lack of ability to automate decisions, and an inability to understand customers in context top the list of reasons many personalization initiatives fail to materialize.
Challenges to Personalization
% of Respondents
Organization constraints/silos make it difficult to hold accountable
Automating decisions at scale
Assembling a real time view of customer full content
Understanding buyer behavior in context
Creating compelling offers and content
Integrating third party data
Building sustainable data architecture
Source: Oracle Marketing Cloud, December 2017
Fortunately, there are many ways to succeed and many good strategies to consider when getting started, some of which represent substantial opportunities that are often overlooked by retailers who struggle to embrace the entire potential of personalization, says the report.
To date, most of the personalization investment in online retail has focused on the site shopping experience - for good reason. A December 2016 Ascend2 survey identified the website as the “most effective” marketing channel to include in a digital marketing growth plan, with 63% of survey respondents specifying this channel among a list of possible responses. The second-most cited channel was email, with 52% of respondents indicating email is the “most effective channel” to include in a growth plan.
What many senior retail digital executives do not yet realize is that there have been many technological innovations in the email industry over the past several years that can fundamentally reshape program performance. When these innovations are coupled with the exceptionally large return that email already provides for most e-commerce organizations, it is possible to achieve strong growth with relatively little effort by applying spend to this oft-neglected channel.
Summary, says the report: Retailers struggling to compete with larger rivals such as Amazon would do well to follow the e-commerce giant’s lead by investing in digital personalization technology and strategy. While website personalization represents a growing and important opportunity for most e-commerce organizations, email remains under-resourced in the area of personalization and warrants a close examination from senior digital marketing leadership.
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