Hyper-Personalization Importance in Retail Using Machine Learning

Hyper-Personalization Importance in Retail Using Machine Learning

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We are living in a digital era where customers are always looking for new information to make their decisions regarding a particular product or service. The pandemic COVID-19 has changed consumer behavior; they don’t trust what the brands have to say; instead, they rely on different sources such as product reviews, feedback, influencers, and user-generated content. So, what’s the role of hyper-personalization in all this? Before we begin, let’s talk about the effects of the pandemic on consumer behavior.

Effects of Pandemic on Consumer Behavior

The pandemic has dramatically affected the overall human behavior. On individual levels, there are two types of social behaviors. For many people, COVID-19 has provided them with the opportunity to re-examine their current lifestyle and make changes accordingly. While for others, the change is temporary, and once the pandemic is over, they’ll return to their same old routine. The new social behavior created by this pandemic will impact the upcoming brands.

The closure of physical stores due to lockdown has forced consumers to change their shopping behavior. Many people who avoided online shopping are now creating accounts to experience online shopping. Once they enjoy their experience, they’ll never go back to traditional shopping methods even when the pandemic is over. The brands/businesses need to rethink their strategy and try hyper-personalization in retail businesses. So, what is the hyper-personalization definition?

Hyper-Personalization Definition

Hyper personalization is defined as the use of real-time data, AI, or machine learning to deliver the relevant product, service, information, and content to the user. Due to changing behaviors costumers, today want personalized experiences. They want their products or services to be personalized as per their preferences.

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hyper personalization

Hyper personalization using machine learning is the solution to the problem because it delivers a personalized experience to a customer by understanding their preferences and behaviors. It motivates customers to explore new products that are according to their preferences and unique taste.

Why Hyper-Personalization?

There are two different things that you need to understand before we answer why hyper-personalization in retail is essential. First is personalization, which means the inclusion of transactional and personal information such as title, name, purchase history, to your communication. Secondly, hyper-personalization takes personalization to the next level to create relevant content as preferred by the customer. We need hyper-personalization in retail because:

  • Engaging with Audience

According to the New York times, as a business owner, you have eight seconds to grab the attention of your audience or the potential customer. Hyper personalized campaigns can help your brand or product to engage with the audience. According to the Epsilon group that 80% of the customers will make a purchase when the product delivers a personalized experience.

  • Relevant Content

Relevant content or relevance is the key ingredient of B2B and B2C marketing. Hyper personalization delivers the right and relevant content to the right individual at the right time. Amazon and Netflix are a great example because they’re using hyper-personalization to deliver the right content to the right people at the right time.

  • Trust Building

If audience engagement and relevant content are added correctly, then the trust will come automatically. There is fierce competition these days in the online market space, and the customer will always choose the brand they trust. Creating hyper-personalized campaigns can help you build trust and grow your business.

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Hyper-Personalization Using Machine Learning or AI

Personalization has become standard practice adopted by brands and marketers to market their products. But often, customers feel frustrated when communication is not personalized according to their preferences. For example, retailers sending marketing emails or flash offers about a gardening tool to the person who lives in a high-rise apartment. When communication is not personalized customer switches to other products or services where they feel valued and appreciated. So, brands and big organizations are now using machine learning-based hyper-personalization to enhance the customer experience.

hyper personalization

Machine learning has revolutionized digital marketing; marketers can process real-time data to personalize the experience of customers on individual levels. Machine learning algorithms can analyze the data and deliver the relevant content, information, and products to every individual.

How Does Machine Learning Hyper-Personalization Work?

  • Building Customer Profile

The first step to deliver the hyper-personalized experience to a customer involves gathering or collection of data. Machine learning technology helps in predictive analysis; companies or brands can use the data collected from different sources to build a customer profile. AI or Machine learning algorithm uses customers’ history and behavior to predict the customer usage pattern related to each product. Customer profile and engagement can help brands determine the needs of their customer and deliver a personalized experience to their customers.

  • Learning Customer Preferences

As discussed, machine learning or artificial intelligence plays a key role in assessing customer preferences. Brands can learn about their customer preferences in two different ways, i.e., customer usage patterns and customer preferences at various touchpoints. For example, if a customer rejects or accepts an offer at a certain touchpoint, the customer profile will be updated in real-time, and the data will be used to make decisions in the future.

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Achieving Hyper-Personalization in Retail

Companies or retailers can achieve hyper-personalization through different channels. They can use clienteling applications and hyper-personalization to upsell their products and services. Beacon technology is another tool to achieve hyper-personalization; when a customer visits the online store, they can take permission from the customer and send relevant content and offers via push notifications. Other channels to achieve hyper-personalization in retail are digital kiosks, robots, and augmented reality apps.

Final Words!

The advancement in technology is changing the businesses, and the use of artificial intelligence and hyper-personalization is the next step in the evolution process. It allows you to serve the right content to the right individual. Big e-commerce giant Amazon has hammered the retail industry, but the truth is retailers have the most trust, loyalty, and transactional data. Moreover, the presence on the street, coupled with the correct technology, can turn the tide for retailers. The e-commerce landscape changes every day, and hyper-personalization will soon become the new normal for both industries and customers.


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Khalid Saifullah

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