Nikki Baird of RSR Research points out the difference between retailers practicing personalization and relevancy. Personalization can be selfish when the motive is simply to sell more. Relevancy can be noble when the desire is to satisfy more.
This is a great observation and a common pitfall with personalization. How can retailers use relevance (or personalization) to present offers that truly help shoppers?
Shoppers say they they most value offers on items they regularly buy, offers related to personal events, and recommendations on relevant new items, according to a recent IBM survey of 30K shoppers (Institute for Business Value 2011).
How can you predict the best offers? There are generally 4 ways:
1. Present a lot of offers, adjust a priori by season, segment, etc. and let shoppers sort them out.
2. Let shoppers opt-in to the kinds of offers they wish to receive.
3. Use shopper purchase history to recommend the most relevant offers.
4. Use collaborative filtering or similar techniques to suggest what like shoppers have chosen.
Options 2, 3, or 4 have all been called “personalization.” They work best depending on the information availability, privacy sensitivity, and target shoppers’ willingness to receive recommendations.
But the best approaches do something else. They intervene to tune out annoyances. This includes share-of-requirements filters that kill Pepsi offers to Coke enthusiasts, recurrence filters that eliminate repetitive offers, and the like. It takes both the right experience and intentions–the one-to-one marketers who listen to shoppers and anticipate ways to satisfy rather than just sell.