MyStore — Hyper-Personalized Digital Store (HPDS)
Anand Muralidaran
On a mission to transform B2C Industry with purpose-built, cost-efficient DLMs | #ChatGPT for Retail | Former NVIDIA Exec | AI Student
Executive Summary
As a consumer when we shop brick and mortar we walk through a few aisles, shelves and skip the rest. Retailers and Brands can actually learn these patterns and mirror these experiences in their digital shopping journeys as well.
Building digital experiences that mock and mirror the physical experience of a shopper, might be extremely valuable and something worth exploring for Retailers and Brands.
The key aspect in this solution, as in any personalization/targeting solution is, how good is the Customer 360 platform, process and the quality and data. If a Retailer can take care of that first, then their ability to do hyper personalization and create a contextualized version of the eStore would be the height of hyper-personalized shopping.
Context:
COVID19 is driving exponential growth in ecommerce adoption in general, and grocery in particular. And for the most part this trend is going to be irreversible. Rakuten Intelligence and NetElixir report (impact of COVID19 on grocery ecommerce) 180–210% growth in online grocery for the month of March 2020, compared to last year.
With online retail having its first major online explosion, millions of shoppers in US are expected to do online shopping for the first time, and remain so.
For every shopper, shopping in a physical store world is generally limited to a portion of the store. There are aisles and categories that a shopper never explores, based on their eating habits, beliefs and limitations.
The online experience these shoppers get can be made to match their physical shopping route. In other words, in a Digital world we can create a version of the store (MyStore) that the individual would shop for the most part.
MyStore would drive the below benefits to the shopper and drive up basket size and conversion for the Retailer.
1. Focused shopper experience
2. Shoppers get what they want quickly in errand scenarios
3. Simple and pleasant browsing experience (do not see items that might repel experience)
4. Website performance and relevant content load
These benefits can be bucketed into 2 major categories viz. Personalization and Website Performance.
Impacts of Personalization on Customer Behavior
Please check out the findings of a BCG study, commissioned by Google on the impact of Personalization on Customer behavior here
The need for hyper-personalization and zoning in on the segment-of-1 is extremely critical and immediate now.
With Customer 360 platforms morphing from System-of-Record to System-of-Intelligence (powered by AI engines like
Einstein of Salesforce), it is super-critical for retailers to leverage this insight and provide contextual digital journeys and product personalization that will enhance the shopping experience.
And as you see in the above chart, there is a 110% growth in number of items bought and 40% jump in the basket size in $s for personalized experiences.
Of course, customer privacy, sensible data controls, and explicit consent are crucial to ensure personalization does not come at the cost of personal privacy, like in any scenario that involves handling customer data.
BCG’s Personalization Maturity Index chart indicates the correlation between driving highly connected experiences and personalization would have a huge uplift on revenue uplift. Retailers in Tier 2 see an average of 40% revenue uplift.
Interestingly, no retailer is qualified for the Tier 1 category.
MyStore would be a great experiment of retailers to scale their personalization efforts and drive towards the segment-of-one and reach the maturity utopia (Tier 1)
Like any, this needs to be A/B tested after customer consent to check and see how it impacts behavior, traffic, basket metrics and conversion rates.
Website Performance vs. Traffic and Conversion
One of the desired side-effects ?? of MyStore is its ability reduce the size of the webpage and hence increase the speed at which the webpage and its contents would get rendered to the customer, across devices.
Please see below chart for the impact of increasing load time on conversion rates.
79% of customers who report dissatisfaction with website performance are less likely to buy from that site again
Akamai Study showed that 1 second delay meant a 7% reduction in conversions in 2017.
With higher share of overall ecommerce business in 2020, this impact could run easily into millions/billions based on the GMV of the Retailer.
Solution Snapshot
Shopper Perspective
In a physical store, a shopper based on their choice, preference, allergies, beliefs, walks and shops along the aisles that matter to them and buys only from them.
The online experience today is personalized a bit, but there is a lot of room to grow and evolve, as we saw in the BCG Maturing Index chart above. For example, removing the meat and seafood sections for a vegetarian shopper or removing the dairy sections for a vegan shopper, and many more similar scenarios.
Doing that could help the shopper have a better shopping experience and less distraction, by loading items that matter to them and filtering out the rest.
Technology Perspective
The average time it takes to load an ecommerce website is anywhere from 8 to 12 seconds (Source — MachMetrics). An average webpage loads about 3MB worth of content — images, scripts, videos, links.
Adapting this MyStore concept in the larger e-store would optimize webpage size, while decreasing the time it would take for the webpage to load.
Both of these would have a positive multiplier effect on the shopper experience, while saving valuable cloud, compute and network bandwidth for the Enterprise.
Shown below is a sample rendition of how the hyper-personalized MyStore would look for a Beauty/Cosmetics Retailer like Sephora.
Potential Business Benefits
Even a few hundred milliseconds, can affect the business bottom line. Here are some examples:
· Walmart and Amazon both observed a 1% increase in conversion for every 100 milliseconds of improved webpage speed.
· Yahoo saw a 9% increase in traffic to every 400 milliseconds of webpage speed improvement
· Plus, the positive impact of a personalized storefront to a shopper’s buying journey and experience is incredibly hard to comprehend and quantify.
Other Considerations
While this is a direct personalization of who the individual is, there could be scenarios where a shopper could be shopping for others or hosting a party where the personalized MyStore may not suffice.
In those scenarios, the ecommerce platform can provide an option for the shopper to click-and-expand the online store to show more categories or give option to choose from the list of categories they would like to shop.
The AI engine could even learn, adapt and update the new shopper preferences, on consent.
Thanks to BCG, Akamai, Rakuten Intelligence and NetElixir for their insights. Most importantly thanks to Retail leaders from my network who brainstormed on these ideas and challenged me to think deep, wide and long before daring to publish this POV blog.
About the Author — Anand is a uber-passionate B2C thought-leader at the intersection of Consumer, Commerce, Physical and Digital. He is blessed with 25 yrs in Retail/B2C Industry having partnered and delivered strategic programs for iconic brands like Walmart, Target, News Corp, Best Buy, Petco, Williams Sonoma, Sephora, and ROSS, to name a few. He has played multi-dimensional roles from heading P&L Portfolio of F500 clients, GTM Evangelist role at a Corporate VC and led Growth at a B2B SaaS Startup. He runs Iconic Mindset, a strategic innovation/transformation consulting for F2000 B2C companies and growth advisory for B2B startups.
References
- https://www.bcg.com/publications/2019/next-level-personalization-retail.aspx
- https://www.machmetrics.com/speed-blog/how-does-page-load-time-affect-your-site-revenue/
- https://medium.com/@vikigreen/impact-of-slow-page-load-time-on-website-performance-40d5c9ce568a
- https://www.gigaspaces.com/blog/amazon-found-every-100ms-of-latency-cost-them-1-in-sales/
- https://www.machmetrics.com/speed-blog/how-does-page-load-time-affect-your-site-revenue/