Target and Toys R Us posted overall sales declines during the holidays.
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"With the ability to share data between departments today, there is no reason a service agent cannot identify cross-sell opportunities when contacted by a consumer," says Ability Commerce's Buzzeo. "Personalization should extend to every customer touch point, because it's all about merchandising. Even if the customer does not respond to the offer made in one channel they may very well act upon it in another."
Mobile commerce is an example of how retailers are increasingly interacting with consumers across channels. "A phone application that tells the consumer if an item they are checking is on sale, if it's out of stock at the store, or what aisle it is located in, is even more powerful when combined with 4-Tell's personalized recommendation software," says 4-Tell's Levy. "And this is just the beginning. In-store kiosks or tablet computers that can recommend products enable customers and employees to have the aggregate knowledge of all salespeople combined with intelligent, automated systems like 4-Tell's."
Arguably the biggest balancing act retailers face when it comes to personalization is not raising consumer concerns about privacy. When showing a consumer it knows a great deal about her personal preferences, a retailer should respect the consumer's privacy so as not to make the consumer feel as though Big Brother is watching.
Using tracking cookies that gather clickstream data only when the consumer visits the site of the retailer that placed the cookie is a best practice that retailers may want to consider.
"Not all consumers like the feeling of being followed around," says Certona's Sheik. "We only use tracking cookies specific to a retailer's web site so the information gathered is specific to their business. We also avoid collecting any information that can personally identify the consumer so they have a greater feeling their privacy is being protected. It is a fine line between creating a personalized shopping experience and giving consumers a sense they are being watched too closely."
Retailers should also take note if a consumer frequently cleans tracking cookies off her computer or blocks information previously available on her public Facebook profile. "Those can be indications the consumer wants to remain more anonymous as they move across the web, and retailers might want to ask these consumers in the future if they object to having a tracking cookie attached to their computer," says Buzzeo.
Finally, before choosing any provider of personalization technology, retailers need to ask questions about how consumer and product attributes are used to create relevant recommendations, how fast product recommendations download and whether the personalization engine can be integrated across all consumer touch points.
"Retailers also want to ask how the personalization engine will be tailored to their business and customer base as both evolve," says iGoDigital's Tobias. "A bookseller that operates five different sites is going to have five different sets of customers with differing preferences; it is important to know that the personalization engine can be tailored to each customer base and learn more about customer preferences each day. Personalization is a process of continual refinement."