Product Personalization – The Present and the Future

It is no exaggeration if I say that the world has been turned upside down in the past two years. The pandemic and the lockdowns saw humans retreating to their homes. When I look back, what surprises me most, is the fact that I have very rarely stepped out of my house during these times. Yet, my life was running smoothly w.r.t my work, children’s education, food, entertainment, clothes and what not!. I had access to all these, seamlessly, and from within the confines of my home. As someone who has been working in Retail digitalization, I realized that most of the businesses have moved on to the digital mode, new e-businesses have cropped up and those who didn’t adapt have perished.

These changes have also resulted in a vastly different marketplace – going digital is no longer an option but a necessity, majority of your customers are only available online as opposed to maybe a few percentages earlier, all your competitors are also now online, the barrier to entry has been lowered. In this context, if businesses don’t differentiate, they lose customers. I think that there are some pertinent questions that businesses should ponder –

  • Are the traditional methods adopted for differentiation still valid?
  • How do you provide superior customer service when your customers are not shopping on your premises?
  • How do you offer differentiated services than your competitor?
  • How do you outdo the promotions run by other providers?

Product differentiation, better user experience, product quality, etc. are areas that can make a difference, but I think what would make the most difference is Personalization – making the customer feel right at home or rather right at the corner shop where the owner knows what you need, anticipate your needs and goes out of the way to help you get what you want.

For a business, personalization is nothing but offering the right product at the right price to the right customer at the right time. But how do you do this when you don’t know who your customer is? You don’t know their face – all your customers are faceless ‘users’ hidden somewhere on the world wide web. How do you offer the right product when you don’t know who you are offering to? How do you decide when to offer and how to offer? That is where technology can step in to make a vast difference to your business.

The essence of personalization can be summarized as

–        Persona (Who is your customer?)

–        Product Recommendation (What do you offer and how to offer your products and services)

–        Product Pricing (At what price do you want to offer your products)

–        Product Positioning (How do you position the product based on what stage of the sales funnel he/she is?)


Who is your customer? The first step in personalization is to know who your customer is – who is the person behind the username or e-mail id. What are this person’s needs and wants? What are his/her aspirations? What is his/her relationship with my business? What defines him/her – profession, gender, marital status, compulsive versus cautious buyer, price elasticity? Where can you find him – social media, your mobile apps, websites, your stores?

The data needed to build a 360-degree view of the customer is available. CRM systems, loyalty management solutions, the digital footprint the customer leaves in your websites, mobile apps, and generally, the internet gives you the raw data to understand your customer or to group these customers into clusters of people with similar needs.

My wife recently bought a few dresses from an e-commerce platform for my daughter. She told me the next time she used the app, it asked her whether her recent purchases were for someone else and whether she wants to create a sub-profile to let them know who she is shopping for. Their platform is trying to understand who she is buying for so that proper recommendations are made. So persona is no longer about the logged-in user only but is also about any consumer of your products who is hidden behind a user id.

Product Recommendation

Product recommendation is about ‘What you offer and how you offer’ products. You may have thousands of options to offer, but do you want to offer all of them? Or do you want to present those products that have a higher chance to be bought by a particular customer? To present a curated list of products for the customer to choose from, you need to have macro and micro-level insights into the product’s performance as well as that customer’s propensity to buy. These are again influenced by hundreds of attributes – of the product (brand, market, price range) and the person.

Once you have a curated list, what matters next, is how you present the products to the customers. Starting from, the order in which you present the list to how your front-end solutions deliver a user experience that would motivate the customer to select a product, are key aspects of product recommendation. To keep it simple – It’s all about creating the feeling of “ Oh yes, this is exactly what I was looking for” or “ this is better than what I had in mind”

Product Pricing

Do you want to sell your products at the same price to everyone all the time? Do you want to offer the same promotions to everyone? Or do you want to offer a price or promotion based on how much it will increase the chances of shopping cart conversion? Do you want to switch strategy seamlessly when any sale matters vs peak of sale of a particular product? Do you want micro-level controls on how long you want to show an offer i.e., the purchase time limit on products in carts?

The answer to these questions lies in how dynamic your revenue management system is. Dynamic pricing is very real and dynamic pricing becomes a powerful tool to improve cart conversion KPIs when it is paired with personalization. A dynamic pricing solution should be able to offer product prices that make a difference under the context of a particular shopping search. It should be able to respond to a market situation, competitor pricing, and the customer’s persona.

Product Positioning

In a largely internet-driven marketplace, you don’t wait for the customer to be at your e-commerce site or mobile app to start selling your products. Digital marketing, for sure, is a key enabler for this. However, how personalized are your marketing initiatives? Except for addressing a generic e-mail with a personalized name, how much thought is put into checking whether the content is relevant to the customer or at what stage of engagement in the sales funnel he is? I would say very little.

Digital marketing solutions should be able to understand the rules of engagement needed at different stages and with different clusters of customers. A person sitting at home who is not your existing customer requires a different set of notifications than a repeating customer who has an idle shopping cart with items. Someone who has “wishlist” items might need a nudge in the proper direction, like a custom discount, to get him to swipe his credit card. Someone who is on your website and has added items to the cart might need some ‘Upsell ‘or Cross-Sell “prompts to push him into committing to a higher cart value. The timing of engagement is important, but even more important is that the engagement makes sense to the “persona’.

Technology as an Enabler

There has never been a time before when business and technology service providers have to be hand-in-hand to deliver what matters to customers. As we have seen above, all aspects of personalization boil down to data – the data that you have about the people and your products. Technology enables consolidation of customer data (Person, digital footprint, purchase history, browsing history, UI interactions), Product data ( KPIs of the product sales, market forecasts, etc.). It also helps in analyzing these micro and macro-level data to derive insights and patterns. Recommendation, pricing, and positioning then become the output of interactions between the data, the insights, and the real-time context in which it is being looked at. The actionable outputs are then delivered appropriately, by again relying on powerful technologies.

New Paradigms of Personalization

As retailers, your challenges are not only limited to the fast-paced changes to technologies, but also to the fact that your customer base is also changing. We can observe some fundamental changes to the value system of younger adults and teenagers who are your major customer base, say 15 years down the line. From global warming, equal and fair representation, gender and racial discrimination to local food production, the carbon footprint of your products, cruelty to people and animals are passionate causes for a growing percentage of the population. While you focus on leveraging technological advancement to stretch your reach, it is equally important that you also showcase the values you stand for and also your commitments to what matters to your customer base!

Author Details

Vipin Jose

Digital Experience specialist with extensive experience in large and innovative digital transformation programs. Specialized in Web, Mobile, PWA, Headless commerce based transformation programs for large Retail and CPG companies.

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