WHITE PAPER THE CASE FOR Make a lasting impression by being more human with your

1 The Demand for Personalization

As humans, we all want depending on your point of view) for this transformation in to be recognized and consumer expectations. Every remembered. These day, brands are creating new, desires are very real to us innovative, and personalized experiences. has taken this for personalization, for meaningful as consumers, too. That’s to a new level, experimenting with experiences, and for relevant why out of almost 1,000 interactive programs like “Black engagement. Customers will align consumers, 92 percent Mirror: Bandersnatch” that offer themselves and purchase from brands a choose-your-own-adventure that recognize them as individuals at say they would stop viewing experience to individualize every step of their journey, and brands purchasing from a brand the direction and outcome of the that make experiences as simple and after three or fewer bad storyline. As these kinds of advances convenient as possible. occur, personalization becomes customer experiences. second nature for us as consumers 26 percent of those – and we expect similar experiences Personalization is no would stop after just one wherever we go and whenever we shop. longer an option. It’s bad experience - all this the key to keeping according to Gladly’s Research bears this out. According to your customers 2019 Customer Service an Accenture study, over 75 percent of consumers are more likely to engaged – and Expectations Survey.1 purchase from retailers that know spending. their name and purchase history and We appreciate being offered provide recommendations that are personalized recommendations for appropriately on-taste.2 Another study Here’s the reality for retail marketers products or content that is relevant to from Infosys reveals that 74 percent today: personalization is no longer us as individuals. In fact, we’ve come of customers feel frustrated when a an option. It’s the key to keeping your to expect this kind of service from website’s content is not personalized.3 customers engaged – and spending. brands. As consumers become more and Brands that get it right stand to gain more acclimated to getting what they a lot. Those who don’t, lose. Consider We have companies like want, their expectations from retail some of the major retailers that have and Netflix to thank (or blame, marketers have never been higher: failed in recent years.

1 “2018 Customer Service Expectations” Gladly. June 27, 2018 2 “Consumers welcome personalized offerings,” Accenture, October 13, 2016 3 “Rethinking Retail” https://www.infosys.com/ 2 newsroom/press-releases/Documents/genome-research-report.pdf?_ga=2.167083318.949342403.1548705248-1828553468.1548705248 RETAIL APOCALYPSE: A Few Key Casualties from 20181

Toys R Us 881 stores CLOSED

Walgreens 600 stores CLOSED

Sears/Kmart 462 stores CLOSED

One major common denominator among these retail Marketers are casualties is this: they each failed at some level to adapt to escalating consumer demand for digital experiences and beginning to recognize personalization. (AI) as the game As a retail marketer, you need to put your customers’ individual preferences, histories, and current state at the changer they’ve been center of every interaction they have with your brand. The waiting for. brands that do so, with the capability to deliver hyper- personalized messages on the right channel at the right time, for. AI engines developed specifically for the needs of will be first-in-mind for today’s entitled customers. engagement marketers can boost personalization and individual relevance by automatically turning consumer The good news is, tools exist today that allow marketers insights into on-taste messages – and they can do it at a to personalize and hyper-personalize at a level previously scale that is beyond the wildest imaginations. AI is unlocking unseen. Forward-thinking brands are already spending major the hyper-personalized future of marketing. Not only is it dollars on marketing technology for personalization and satisfying the demands of today’s entitled consumers, it can the data it requires. Demand for customer data platforms also save you a lot of money: according to an August 2018 (CDPs) continues to grow, as retailers and organizations survey of 400 retail executives worldwide by Capgemini, AI move towards building a single, 360-degree view of their could save retailers as much as $340 billion annually by 2022.4 customers.2 And marketing automation is expected to grow by nearly ten percent in 2019, with more than half of companies It’s pretty clear that the time has come for retailers to get more surveyed using some form of automation already.3 personal in their marketing efforts. In this white paper, we’ll take a closer look at personalization, sharing key findings and In addition, marketers are beginning to recognize artificial vital insights to help you understand how to be more human in intelligence (AI) as the game changer they’ve been waiting your marketing efforts.

1 Weekly Store Openings and Closures Tracker 2018, Coresight Research, November 2, 2018 2 “Seven Marketing Tech Trends for 2019,” eMarketer PRO, December 19, 2019 3 “How AI Is Driving Marketing Automation” (https://www.entrepreneur.com/article/326228) 4 “Will AI Transform Retail,” e Marketer, January 8, 2019 (https://www.capgemini.com/research/building-the-retail-superstar-how-unleashing-ai- across-functions-offers-a-multi-billion-dollar-opportunity/#) 3 The Case for Personalization

The era of the entitled consumer sets a high bar for retailers to get communications right every time. Delivering the personalization and relevance that customers demand may feel like an impossible task. But it’s an absolutely critical one. Consider these consumer facts:

91% are more likely to shop with brands that recognize, remember, and provide them with relevant offers and recommendations1 3 out of 4 expect companies to treat them as individuals, not as members of a segment (like “millennials” or “suburban mothers”) 52% are more inclined to change brands if a company doesn’t offer personalized communication2

1 “Making it Personal,” Accenture study, reported on Forbes.com: Answering Consumers’ Needs Without Relying On Third-Party Data, January 9, 2019 4 2 2018 State of Marketing report, reported on Forbes.com: “5 Ways Artificial Intelligence Can Improve Your Marketing, January 20, 2019 What is Personalization & How Did We Get Here?

There was a time when inserting a first name into an As we’ve noted, the current level of customer expectations email subject line was considered revolutionary. Now, is the result of increasingly personalized service experiences personalization as a tactic and as a marketing concept from top brands. Remember when Starbucks started to let has evolved much further. Today, personalization is customers customize their coffee drinks, served with their an imperative; one driven by skyrocketing consumer name on the cup? This opened up a new path to where we are expectations and advances in technology. So what do we today. Along the way, customized sneakers, automobiles, and mean by personalization today? even prefab houses became the norm. Siri and Alexa offer custom-tailored information and shopping services by verbal Personalization is a method or strategy by which a marketer command, right in our homes. uses audience analysis and data to meet the individual needs of a consumer. This is done by collecting and processing But the quantum leap towards customized experiences left information on customers’ interests, demographics, and personalized marketing messages trailing behind. Sure, email behaviors to create more relevant content that provides more marketing has come a long way from simple batch-and-blast value. The more a marketer can accomplish this, the greater approaches with generic salutations and irrelevant content. the consumer’s likelihood of repeat visits, purchases, or But now, many retail marketers are struggling to make the shift engagements. from low-level personalization, to truly contextual marketing – customer-initiated interactions that are triggered outside of campaigns.

ON BEING HUMAN: HOW TO MAKE IT PERSONAL Getting personal with your customers starts with being human. While that sounds simple, it’s easy to overlook.

As Steven Van Belleghem explains in his award-winning book, When Digital Becomes Human, companies need to not only successfully implement the digital relationship, but transform their customer relationships on a human level. “The successful customer relationship of the future will... be built on both the rational (digital perfection) and the emotional (the human touch),” Belleghem writes. “Combining a digital and a human customer relationship is the only way for the vast majority of companies to survive.”1

1 “When Digital Becomes Human” – blog post, Steven Van Belleghem, October 21, 2014 5 Be Human in How You Collect Data and Request Permission Being Human Data Sharing & By being human about the way data is collected, you are more likely to in Your Trust build customer trust and permission. Being human implies behaving Communication Being more human in your marketing across the customer journey as you In addition to being more human in begins with establishing trust: the would if you were talking to the your data collection and sharing, it’s basic human belief in the reliability or customer face-to-face. This builds important to consider your marketing truth of someone or something. It’s trust and the emotional connection communications: how you actually also a prerequisite for any long-term, that encourages data sharing. Think talk to your customers. According trade-based relationship. It’s not a about successful sales people: they to Forrester Consulting, if a brand’s one-off, rational decision, but an naturally inquire and listen; then they communication is seen as “human,” emotional connection built up over adjust their approach based on what customers are 1.6 times more likely to time. they see and hear. A similar approach make a purchase and 1.8 times more should be taken with data collection likely to recommend that particular For customers to share their data and permission. This includes: brand.2 Forbes published an article willingly, they must trust your brand. reinforcing Van Belleghem’s point, Get it right and you will succeed in • Understanding the customer’s calling upon marketers to make their building trust, while still collecting the attitude to the data efforts and their messaging more customer data you need to strengthen • Being sensitive about what data human, even when using technology, the customer relationship. Get it you collect automation, and AI to empower wrong, and you fail, potentially losing • Using the customer journey and deliver their campaigns. Some permission – and your customers. to identify where and when to of these key, common sense tips collect the data include:3 • Inspiring the customer to offer their data • Make sure your technology supports your branding with a certain amount of surprise and delight • Do all you can to make your Demonstrate automated content feel human: Trust by Handing include humor and playful graphics in user interfaces, use Back Control informal language, and convey enthusiasm on your site and on Brands should make it simple, engaging, and rewarding for • Make sure your message isn’t customers to learn about the an impersonal, one-size-fits- organization’s approach to their all broadcast, but is suitable data. Providing an empathetic space to where each person is in the for customers to explore what data is customer journey – nothing says held and how it is used is also an ideal “automated email” like a message opportunity for the brand to explain directed to someone else how the customer benefits from sharing their data. Those that do will earn a higher level of trust, and richer data.

6 2 “Marketing to millennials: It’s about loyalty and personalization,” MarTechToday, January 24, 2019 3 “Besting the Bots: How to Make Your Marketing Human Again,” Forbes, January 3, 2019 The Role of AI: How to Super-Charge Your Personalization

If being human in your retail marketing is essential for personalization, from data collection and sharing to how you craft your messages, then artificial intelligence (AI) is the key • 71% of shoppers to unlocking an even higher level of personalization known reported having as hyper-personalization. The future of marketing is hyper- been frustrated by an personal, simply because today’s demanding consumers have impersonal experience come to expect nothing less than individual attention at every turn. A Segment retail study found that: • 54% expect to receive a personalized discount Hyper-personalization requires knowing previous likes, within 24 hours of purchases, and behaviors, while also factoring in current identifying themselves situational needs. Research-based marketing firm Ascend2 (32% after just one states that hyper-personalization “...takes personalized hour!) marketing a step further by leveraging AI and real-time data to deliver more relevant content, product, and service • 44% would become information to each user.” 1 AI is the engine that can repeat buyers after successfully drive the kind of personalization consumers a personalized are demanding today – but you need to know how to use it experience effectively.

WHAT AI CAN ACTUALLY DO FOR YOUR MARKETING AI can be a critical driver of better conversions and marketing ROI, allowing marketers to identify their audience and tailor experiences, content, and delivery. According to a December 2018 survey by Salesforce, marketers’ adoption of AI grew 44 percent from 2017-2018; and the number of marketers using or planning to use AI over the next two years is expected to increase by 257 percent.2

AI will soon not only be the status quo, but the only way to deliver personal relevance in at scale. “The use of AI is not an option, it is a must,” says Alexei Kounine, AI Lead for Selligent Marketing Cloud. “The history of business – particularly in eCommerce – has shown that companies that embrace innovations that serve to reduce friction in the customer journey are bound to be successful.”

AI marketing solves the most nagging problem that marketing is facing: more and better customer data is available. But for marketers, the question is how to translate this intelligence into more relevant marketing messages and more personalized customer experiences – and to do so at scale. “For years marketers struggled to collect and centralize data, analyze and identify the relevant data and make this data actionable,” Alexei remarks.

1 “Hyper-Personalization: What It Is and Why You Need It in Your 2019 Marketing,” Convince&Convert, January 2019 2 Salesforce “State of Marketing Report,” December 13, 2018 7 AI heralds a change. It takes away the heavy lifting from marketers and can essentially deliver one-to-one marketing that had previously been talked about, but was never possible before.

Alexei Kounine AI Lead Selligent Marketing Cloud

8 9 By replacing manual involvement with smart marketing automation based on data, AI-engines such as Selligent Cortex make a difference on three levels:

02Individual 01Laser-focused customer marketing journeys 03Recommenda- segmentation Today’s consumers follow their own tions based digital customer journeys, posing Building segments used to be about immense challenges to traditional on behavioral creating demographic segments. marketing approaches. “It used to be marketing Now it’s about feeding all of a true that you pick a channel such as customer’s profile data to the AI and email, create a campaign, and set a AI-based product recommendations letting the AI build better segments send time,” says Alexei. “Now you can have been shown to boost conversion automatically, by predicting the let the AI pick the right channel and rates by up to 20 percent. They can performance of each segment against the right time to reach a customer.” be based on either personalized a campaign. Marketers need to attain It’s important to note that the optimal recommendations drawn from a a 360-degree view of their customers’ time and preferred device to receive specific customer’s behavior, or personal preferences, past purchases, marketing messages differ radically statistical calculations or items added and preferred devices. The most from consumer to consumer. Retail to a wish list. As the most important current profile data is key in creating marketers need to ask questions aspect, Alexei Kounine points out context-based personalization such as: What do customers need at that product recommendations can and sending personalized offers this very moment, or what are they be implemented in real time across on just the right channel. Selligent actively searching for? And what do all channels for true omnichannel Cortex relies on data from Universal they own already? Marketers can then personalization. “Whether it’s an Consumer Profiles to achieve laser- inject moments with relevant answers email, a graphical component focused audience segmentation via mobile push-notifications and on the website, or a mobile push that would be impossible at scale in dynamic content that serves individual notification, the universal consumer conventional marketing automation. offers synced to the moment of open. profile is the same, so the real-time A manually created segment such On a basic level, customers walking recommendations will be accurate as ‘male between 25 and 33’ will not near a store can be targeted with and up to date.” Plus, marketers perform as well as a segment crafted dynamic emails containing active maintain full control over what offers by an AI based on aggregated data promotions specific to this location. are displayed to which customers of browsing behavior, plus purchases, But in case they open the message based on what kind of behavior – and comments/ratings left on the when a store is already closed, let the AI engine do the rest. website, and personally identifiable their email pipes in offers from the information. company’s online store – also an example of real-time adaptation.

10 Retail marketers need to realize that traditional experiences and methods are no longer enough to Savvy marketers are ensuring that their data practices and their overall communications are satisfy customers today. To executed with a “human touch.” More marketers survive, every retailer and are doing a better job of segmenting their customers into groups or personas, to provide every brand has to choose a more personalized experience. And they are recognizing the role that technology and AI play to to make a major mind meet consumer demand for personalization. What shift and start thinking constitutes an “amazing” customer experience today is a new breed of hyper-personalized messages from the point of view of and campaigns, executed in an automated and contextual way, triggered by factors such as weather the consumer. Examine data, product stock data, loyalty tier data, and live what you are delivering events. versus your consumer’s In this great future of hyper-personalized marketing, consumer data is the fuel for achieving previously expectations – and you’ll impossible levels of personalization and consumer- open up unexpected areas centric engagement. Marketing technology is the vehicle that allows you to deploy messaging of opportunity. across every channel, in a way that ensures every automated message feels personal, every intelligent product recommendation appears hand-picked, and the timing and channel is always right. And artificial intelligence is the engine that drives hyper-personalization, using data to analyze buying patterns, and then using that to properly promote or provide a customized experience. With all these tools at your fingertips, you can make sure that you inject every message with a human touch and personal relevance for every single consumer.

11 ABOUT SELLIGENT MARKETING CLOUD

Selligent Marketing Cloud is a sophisticated B2C marketing platform that empowers ambitious relationship marketers to maximize every moment they engage with consumers.

With native AI capabilities, a robust data layer, and a powerful omnichannel execution engine, Selligent Marketing Cloud enables marketers to easily target, trigger, and deliver highly personalized messaging across all critical channels.

More than 700 global brands in retail, travel, automotive, publishing, and financial services trust Selligent Marketing Cloud to help deliver their marketing programs. With 10 offices across the United States and Europe and more than 50 partners, Selligent serves over 30 countries with local, personalized service.

Learn more at www.selligent.com and connect with the team at , LinkedIn, and our blog.

www.selligent.com @Selligent 12