Gartner Blog Network


The Danger of Personalized Offers

by Robert Hetu  |  January 4, 2016  |  Submit a Comment

Personalized offers are a tricky thing indeed. Apparently one large retailer determined that I would deeply value Rogaine, since it was included in a set of products within an email with the subject “We have found them for you!” that arrived in my inbox on New Years Day.  The problem is I have a full head of hair, as does everyone in my family.  No baldness, never researched. This is a picture of the complete offer.

 

personal offer

I found this to be the strangest combination of products.  I recently bought wall mount for a flat screen at this retailer (I guess that means I need another?).  I also bought from this retailer some Star Wars toys for Christmas, I have a cat, and bought a Radio Flyer wagon about 2 years ago.  Otherwise this is actually very random and not well targeted toward me at all.  But after all the holidays are over, why would a marketer lead with an electric turkey fryer?  Hmm, leads me to believe they have leftovers from Thanksgiving (pun is intended).

ALERT – if a retailer suggests personalized offers it better be able to appeal to the recipient.  The email list told me they this retailer has no idea how to appeal to me and created a random list based on a few past purchases.  A generalized offer would have been much more effective in engaging me rather than an offer that has no relationship to my behavior. Personalized offers require a deep understanding of customer behavior which I wrote about in an earlier blog last year called Why Behavior Matters and last January in a research note entitled How to Achieve One View of the Retailer Through Behavioral Segmentation.  Below are impacts and recommendations from this research that merchandising and marketing executives need to take seriously before attempting personalized offers:

Impacts

  • Retailers that execute personalization strategies without advanced customer behavioral segmentation will not deliver success in the digital economy.
  • Without delivering customer segmentation consistently across merchandising activities, retailers risk inconsistent customer-facing execution and customer dissatisfaction.

Recommendations

Retail CIOs, chief marking officers and merchandising heads:

  • Develop advanced customer behavioral segmentation capable of incorporating customer personas and motivators based on information from all channels.
  • Ensure that customer behavioral data is optimally segmented and effectively utilized across all functional areas in support of customer centricity.

 

Additional Resources

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Category: customer-analytics  digital-marketing  ecommerce  

Tags: analytics  consumers  customer-analytics  customer-centricity  digital  ecommerce  marketing  merchandising  personalization  retail  

Robert Hetu
VP, Analyst Retail
7 years at Gartner
29 years IT Industry

Bob Hetu is a Research Director with the Gartner Retail Industry Services team. His responsibilities involve tracking the technology markets and trends impacting the broad-based retail merchandising and planning areas. Mr. Hetu is an expert in the areas of brand, vendor and assortment management, merchandise planning, allocation, and replenishment. Read Full Bio




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