Your experience scrolling your social media feed will be very different from your friend’s.
But when you go into a retail store, you’ll have the same experience as everyone else who steps in.
So while digital-first companies like Amazon and eBay are built to create personalized experiences, brick-and-mortar retailers are not, said Liad Agmon, founder and CEO of Dynamic Yield, the analytics startup acquired by McDonald’s for $300 million last year.
McDonald’s isn’t the only big name brick-and-mortar buying into analytics. Walmart and Nike each acquired digital analytics companies in 2018.
The goal, however, isn’t just to provide a better customer experience – these companies all need to know their customers better. For years, they used insights from online ads and social media as proxies for their own customer insights.
But with the cost per acquisition rising on Google and Facebook – and trying Amazon a non-starter since it’s a competitive retailer – reengagement and retention are more important parts of the funnel compared to direct response search-and-social ads.
Retailers were left with a “bucket of holes” after they over-indexed to performance advertising, Agmon said. They spent heavily to drive traffic, but weren’t capturing loyal customers.
Cookies and browser data may be receding, but retailers don’t need that much data to improve their customer experience and purchase funnel. Data such as IP address, location, the current weather in that location and where a user came from – directly to the site or via an ad or email link – are available. It’s possible to create profiles of likely interests and consumer habits for site browsers with similar traits, even when an individual profile doesn’t exist, he said.
Someone browsing an iPhone 11 on a cold day may be a better candidate for a pricey overcoat than the old retargeting standard of tracking people who have checked out other coats on the web.
Site personalization is more important to capture mobile traffic, too, because there’s so little screen space. A desktop visitor could scroll through 100 items in a couple of minutes, whereas mobile pages only display a few products at a time.
“Top of the funnel advertising has been like a drug, because retailers constantly need more and effects don’t last,” Agmon said. “We’re seeing CMO attention shift to customers who already known and like their product.”