January 21, 2005, 12:00 AM

Retailers moving toward personalization, despite its challenges

One of the early promises of Internet retailing, personalization fell out of favor as retailers realized its expected impact on sales was difficult to deliver. But now retailers are placing it high on their list of online technologies, a new study says.

 

One of the early and lofty promises of Internet retailing, personalization, fell out of favor as retailers realized its over-promised impact on sales was difficult to deliver. But now retailers are placing it high on their list of online technologies, according to the results of the “Horizons: Benchmarks for 2004, Forecasts for 2005” study released last month by BearingPoint Inc. and the National Retail Federation.

The study also found that personalization still frustrates retailers. When asked to score on a scale of 1 to 5 their worst online capability, retailers pointed to personalization, scoring it 2.4.

But when the study asked 300 retailers for the most important technologies they’ll concentrate on this year, personalization engines came in as the third most-frequently cited category, mentioned by 48% of respondents.

Ahead of personalization in retailers’ priorities are upgrading their e-commerce software, cited by 66%, and improving their product information management, 63%.

Retailers’ top online customer content initiatives were to improve product information, 83%, provide store locators, 80%, coordinate and improve online brand messaging, 68%, and enhance customer service, 66%.

Another goal of online retailers is to integrate their web systems with the rest of the operation. But few have achieved that. The report says only 47% of retailers have integrated the web with their call centers, only 44% with their fulfillment centers and 38% with ERP/back office systems. Even fewer have integrated the web with their POS systems (9%) and vendors (14%).

The study noted that 30% of retailers vary prices between their online and store channels. It said that 40% have at least 60% of their brick-and-mortar product assortment available online.

 

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