We earlier talked about the crucial role and impact of Personalization in retail and how the retailers are relying heavily on shoppers’ decision-making and analytics to deliver an ultimate customer experience.
In the current blog, we will describe how retailers are fast embracing a more intense form of personalization by going a step ahead to individualize shopping options for customers.
In the retail and ecommerce domain, Individualization and Personalization are fast becoming buzzing movements and entrepreneurs and CMOs need to pay attention to this vital strategy, which has immense potential to resonate with customers.
Individualization, better explained as one-to-one Personalization, may seem overwhelming at the outset. But the ultimate technologies available today has made such business strategies and practices feasible. These technologies such as analytics have enabled retailers to study the needs and choices of customers and communicate with them individually rather than talking to a whole segment of customers.
Let us have first an insight into to concepts before we move on to learning how to best put these strategies into practice in business (in later sections of this blog).
Personalization and Individualization in Retail
Branding firm Landor Associates predicted Individualization and Personalization would be a major trend this year. Coke is manufacturing over a million individually designed bottles under the ‘Share a Coke’ theme. Facebook and Twitter now want to be ‘friends’ with their users. Brands will have to be more agile and flexible about trying out new things, marketing analysts concur. Both authenticity and honesty in the story of the company are what customers are looking for. They are no longer keen on receiving emails just because it’s personally addressed to them.
The Economist carried a report that stated barely 14 percent of customers read those emails, unless they are pertinent to clients’ immediate needs, so companies that innovate with such technology platforms will have the competitive advantage.
In a market environment where different brands are vying to woo the same clients, personalization and Individualization are both vital. They connect individuals with objects that reflect their personal style or life choices and keep the market dynamic. The website StyleRocks, for instance, allows clients to design their own jewellery. On the site, consumers can chose their gold and tools that will allow them to plate the design, adjust it to cheaper prices and add gemstones in different colours. Clients can even give a different finish and design as per individual choice and even engrave it in a choice of languages. They can observe the design from different angles at each stage till the end, and then it will be delivered in three weeks.
Personalization involves the user’s participation. Individualization in retail is customizing for the masses, using individual customer preferences as the lodestone for promoting goods and services. Personalization is an open system that requires connections, while Individualization uses infrastructure to create something novel.
Both personalization and Individualization employ systems, the environment and infrastructure:
- The first could be through communities and institutions.
- The second is more intimate, with people sharing information.
- The third, infrastructure, is information in exchange for data for individual requirements.
Wikipedia is a good example of user generated content created and managed applied in a manner that is being considered by schools, where the learning infrastructure is separate. Though it could be created and changed by individual users. Sometimes free. Sometimes shared. As Serge Ravet, Innovation Director at ADPIOS puts it, “data is like a piece of evidence produced by testimony.”
Tailoring Individualization in Retail
What is also significant is that it relates to the individual and the collective. The ‘I, me, and us.’
Individualization of infrastructure and Individualization of the customer require integrity. This shows that it’s possible to survive on the internet and offline as a free autonomous subject with some control over one’s personal data that is stored with institutions, such as health services and service providers. The customer can also use proxies as their representatives, leading to new development.
The “Internet of Subjects” is devoted to making the web a safer place where personal information remains intact. The fears of infringement on one’s space notwithstanding, privacy can be skillfully traded to retailers for the promise of a better quality of life that focuses on traits which make each human being special.
But theory aside – how does this Individualization work in practice, when customers are being singled out for their uniqueness instead of segmented into larger groups?
One parameter is the example of the Gallup group which conducts polls. It created ‘talent themes’ based on the internet test of personal uniqueness called the Clifton StrengthsFinder. Interviewing around 1.7 million professionals in different fields, it has apparently converted aspects of the tests into practice, by creating 34 different categories of people that fall into broad categories of human uniqueness. Some of these classifications are the Achiever, the Activator, Adaptability, Analytical, Arranger, Belief, Command, Communication, Competition, Connectedness and Consistency. And some more include Context, Deliberative, Developer, Discipline, Empathy and Focus. Individualization is qualified as ‘one who draws upon the uniqueness of individuals to create successful teams.’
There are many overlapping qualities down the entire list, as is often the case which such groupings, but they are more specific and humanistic than classifications such as class, race and gender, which sometimes fall into stereotypes. Christian Gregory, a Professional Development Manager at Gallup, explains that in this context “the theme of Individualization is knowing a person instinctively with an intuitive connectivity.” It also draws links between the human being and humanity. This kind of approach enjoys diversity. She adds that it is “different strokes for different folks, but minimizes differences, and capitalizes on uniqueness.”
Consistency is least likely to be paired with Individualization on this list, because Consistency is more interested in the efficiency of groups and not about the individual. It’s not about you, with Consistency, and Consistency also has a ‘corporate feel.’ Individualization in relation to the Clifton Strengths Finder is about customization, while Consistency is about standardization. Both of these themes are crucial in the present retail scenario, where customers are unique, but production generally employs standardization. However, the approach of Individualization is that one size does not fit all. One motto suggested for this group, in terms of branding would be, ‘Be Yourself. Everything Else is Taken’.
According to Gregory, “it is hard for people to articulate how different they are.” However, marketers are currently very interested in these differences which were previously stripped away by generalization, stereotyping and labelling. Some consumers might be thinkers. Some consumers might be outdoors types. It’s not a refined categorization but it’s another development in retail dynamics. And technology can supply the tools to drive it, if it hasn’t already.
Another analogy regarding Individualization is that it is like “separate ingredients in a cake.” If empathy is in the gut and involves using emotion, Individualization is in the head. It is what the customer sees, what they know, what they are picking up. Apart from underlying the tension between Group and the Individual which is also a marketing concern, it also placed relevance and efficiency as counterbalancing forces.
If the best managers are those who know when to make an exception to a rule that applies to everyone, Gallup’s typical Individualization people are working to break those rules. Individualizaton is also being applied in employment to match people with appropriate management styles.
Individualization and a Product’s Premium Value
Individualization, in the words of Hania Bomba, MD of the RegioPlan business consultancy is way up in Maslow’s Hierarchy of Needs after the basics, like food, clothing, shelter and education are fulfilled. A product’s perceived value is huge in its ability to increase customer’s ego, and serves as a kind of self-expression.
There is research to back this, in the form of an interesting study by Dr Frank Huber of the Centre of Market Oriented Product and Product Management, Johannes Guttenberg University in Manz. He deducted that a product’s primary value relates primarily on its physical and hedonistic benefit and the strength of the consumer’s desire. Huber suggests that “a configuration process must be implemented which holds the user effort as low as possible to ensure the success of the concept.”
The same study also found that Individualization in retail takes place when a customer is more involved. But the customer is not paying for Individualization, nor, as was thought, for the effort taken. He shells out for power of the goods to endow him with immediate satisfaction. And there was greater Individualization while buying a car, (considered riskier), than sports shoes. An element of hedonism gave the car added value, while this was less so with the shoes, though they fulfilled all the customer’s benefits.
Retail Individualization in Action
Many retailers have introduced elements of Individualization in retail into their business:
- Several chocolatiers like My Chocolate Boutique allow customers to create their own orders. Some even have them specially embossed with customers’ own or their friends and family portraits, etc. This is also the case with bakers and confectioners.
- Perfume companies like Unique Fragrance are letting its clients tailor-make their own and have bespoke scents.
- Stationery retailers like Honey Tree Publishing and also have an element of Individualization, and you can buy photo albums with your family pictures laminated into the design, or stickers and pens and other tools embossed with your name etc. Or that of your colleagues at work etc.
- M&M’s were sold with names embossed. Lindt Sport allowed its customers to make chocolates.
- The gifting business is also far more individualized than before and there are firms who will take care of your lists ahead of wedding celebrations, baby showers etc.
- The Post allows Individualization of stamps.
Surveys by leading technology companies tell us that customers prefer to interact with brands that give some relevance to their personal data:
- They are willing to submit this private information for exclusive benefits, subject to the condition that they know how it is being used.
- Customers have revealed that Individualization does affect their buying decisions.
- They tend to buy more from firms that customize their purchasing channels through Individualization.
- They create brand loyalty by returning to retailers who make personal recommendations.
- A large percentage of customers frequent clients who present products to them based on previous purchases.
The best marketers sell goods based on clients’ requirements, instead of wooing them with freebies or discounts that they don’t really want. The number of promotions can be curtailed if customers weave their own natural way back to the client when they really have an intrinsic need for something. If Individualization can help them identify those purchases swiftly they can avoid having to trawl through pages of websites or shopping aisles, which will confuse them with too many choices. This may lead to deferment or cancellation of purchases.
In his book Retail and the Artifice of Social Change, Steve Miles refers to retail as an ‘ever changing feast’. It constantly shifts and is currently coping with unknown aspects presented by technology. Mills wonders whether having developments like kitchen appliances that are equipped to monitor themselves in the future, will make retailers redundant. Whether this will happen or already has, retailers will have to keep creating added values in some form or the other to stay in the game. The aspect of consumer choice for instance implies that even though retail is viewed as relentless, it has to make certain concessions.
Mills adds, somewhat caustically, that “the role of retail in social change is to reproduce the status quo through maintenance of an artifice, a narrative of constant change and opportunity that is never literally realized.” He asserts that Individualization is institutional Individualization. However, market gurus analyzing trends like personalization and Individualization seem to find some reassurance in the reasoning that it may yet lead to better business and more profits.
Ultimately the relevance of something as nascent as the strategy of Individualization in retail is that not only should individual needs be catered to, but that it adapts to a more unified system which supports the mutual existence of all individuals.
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