Meyar Sheik, formerly the cofounder of Certona and now president and chief commerce officer at Kibo Commerce, sees the shopper’s journey as a never-ending process that offers rich opportunities for brands and retailers. And Sheik, who is a member of the Shop.org board as well as a member of the NRF’s digital council, said the fashion industry “still has plenty to do in the personalization space.”
Here, Sheik discusses trends in fashion and retail consumer personalization trends and strategies, as well as how companies can do a better job of engaging customers.
WWD: How has personalization technology changed over the past 10 years?
Meyar Sheik: I think the most significant milestone we’ve seen from working with different retailers across various verticals as well as brands and business-to-business manufacturers is how the multichannel and omnichannel aspects of personalization have evolved throughout the years. Personalization has finally reached the maturity point where it’s all about the shopper. And today’s shopper no longer tolerates siloed channels or touch points. They want a consistent experience across the board that provides real-time personalization.
Personalization really originated in the e-commerce space with Amazon and its recommendations that were pioneered using behavioral data and transactional data specific to the shopper. It was originally an online-based, old-school marketing technique that provided some recommendations based on segmentation, but it was not really “one-on-one personalization.”
Achieving one-on-one personalization in today’s industry in which all channels and customer touch points deliver a seamless experience for the shopper is still the holy grail and a reality that many retailers are still struggling to achieve. We’ve come a long way, but we’ve got plenty to do.
WWD: What are the unique trends that you see happening within the fashion and apparel space in personalization?
M.S.: Luxury and apparel brands have historically been slow to adopt technologies that incorporate machine-learning and data-driven capabilities because this space has traditionally focused heavily on design and brand messaging.
In this space in particular, it’s a balance of art and science. For example, luxury and apparel brands have to find the tipping point where most of the heavy lifting can be managed by an underlying machine-learning and AI engine to allow the brand’s resources to utilize the data insights they are deriving from these technologies. This allows brands to focus on creating goods that appeal to their target consumer. The solution should be flexible enough to take input from merchandisers and brand designers for a curated experience.
This balancing act leads to the question: How does AI play into personalization? The answer is that it enables scale that’s just not possible for human beings, whether they’re merchandisers, brand managers or salespeople. The ability for a brand to predict what someone might like before they fully engage with them isn’t humanly possible without AI technology. AI makes the personalization experience more feasible by having the right products, offers, experiences and content come directly to the consumer, instead of having the consumer search for it.
WWD: What are apparel and luxury brands getting wrong in the personalization space?
M.S.: I’d say fundamentally they’re either too tactical or they’re trying to boil the ocean.
I think many retailers are starting to get the mobile experience right. They are relying more on data and solutions that have the underlying machine-learning and predictive aspect to it.
With respect to fashion and apparel, what we’ve seen is that they’re not leveraging the behavioral and transactional data just yet. As a result, they are missing many opportunities in conversions, average order values and shopper experience. For example, if a retailer is too merchandising-driven and overriding the data, then they are missing an opportunity to fully optimize their strategy and inevitably wasting all their digital marketing efforts and everything they do to drive traffic to their site. Putting it simply, fashion and apparel retailers try too hard to make the engine think like a merchandiser.
Let’s say your shopper is looking for an outfit for an award show. Whether it’s a cocktail dress or couture, the instinct of the merchandiser is to complete the look by showing you the shoes, the handbag and accessories for that specific outfit. With AI-driven personalization, the merchandiser would be able to instantly show the shopper more dresses and additional choices for each look going according to the type of look they are considering.
WWD: Can you please describe the notion of “customer journey orchestration” and how it affects real-time, one-on-one personalization?
M.S.: The shopping experience isn’t just a front-end process. It’s the backend as well. Consumers may have to deal with the return process and may have questions. As such, retailers need to ensure the proper content is readily available to tell its shopper more about the merchandise they purchased. As well, some shoppers may need other products related to the one they just purchased.
WWD: How are retailers enabling this process?
M.S.: Retailers need to be sure they are crafting a nice, personalized experience with relevant offers, promotions and content that applies to each customer. The shopper journey never really ends and it’s in a retailer’s best interest for the journey to not end in order to increase the lifetime value of their customers by turning them from onetime buyers to repeat customers.
The goal in customer journey orchestration is that when one shopping journey ends, another should begin. However, the second journey will only begin if the retailer or brand is good at engaging and reengaging its shoppers. The shopping journey consists of interactions and experiences with a brand. It could be an online search, a news story they read, a good review online or even something small like a positive interaction with a store associate. The orchestration aspect revolves around how you guide your customers through that journey. Your goal as a retailer or brand is to create a personalized, positive and contextually relevant shopping experience without being invasive of your customers’ privacy.
The personalization piece is all the touch points and interactions, and the orchestration aspect is how a retailer or brand stitches this all together across different touch points and channels.
This is what today’s retailers have to do to compete against Amazon. They have to delight their customers beyond the transaction. That’s the differentiation. As more and more layers of technology become commoditized, retailers have to embrace and enhance every granular detail of the shopping experience.
WWD: Where do you see personalization headed in the next 10 years?
M.S.: There is going to be several disruptive technologies that will provide a unique digital and physical experience. Right now, roughly 12 percent of all retail is being done online, the other 88 percent is being done in stores. We see this trend continue to dominate the space. Fast-forward three to five years from now, we expect that number might be closer to 20 percent online and 80 percent in-store. While sales will still largely take place in-store, the discovery phase of the shopping journey will largely take place via mobile and digital touch points. Therefore, retailers will have to continue to shift their focus to providing a compelling digital experience that is aware of location and context. Online retailers need to continuously build each consumer a rich, unified profile that machine learning, AI, and other touch point systems can leverage to deliver hyper-personalized and rewarding experiences.
WWD: How should brands answer to the Amazon threat in apparel and fashion space?
M.S.: Fashion is all about the individual characteristics and preferences. Delivering a differentiated and individualized experience to each shopper is the competitive and strategic differentiator that every fashion and apparel retailer needs to have. Fashion isn’t immune to Amazon; they have already started to enter into the fashion vertical. Luxury brands are safe for now, but mainstream fashion is at risk. Retailers and brands in this space have to differentiate their brand to leverage the advantages of a physical store in a holistic and experiential manner, in order to compete with Amazon.
Whether it’s an airport kiosk, a pop-up store, a new loyalty program or differentiated merchandise, it is critical for brands to think experientially when examining and enhancing their customer’s shopping journey. The presence of Amazon is clear and present danger, but keep in mind that Chinese brands are another risk to watch for as they look to stake their claim in the fashion and apparel industry in the U.S. and worldwide.