7B the migo IQ blog

February 27, 2017

Individualization versus personalization (and how brick-and-mortar retailers can get the right one)

By Annie Mueller

Personalization is one of the marketing buzzwords of the last few years that is starting to fade out. From online shopping giants like Amazon to brick-and-mortar retailers, everyone is betting on personalization to win customers.

The reason that it’s fading now is that marketing executives have come to understand that when marketing service providers say, “Personalization!” what they actually mean is “Segmentation! But smaller!”

And, as smart marketers know, segmentation - no matter how specific, no matter how targeted - is just not the same as personalization.

What personalization should be

Personalization should mean one-to-one marketing: marketing messages and timing adjusted for the individual, according to their preferences and behaviors (thanks to big data, marketers can accumulate those individual idiosyncrasies rather easily).

The problem, however, is that executing true personalization in the real, physical world is a lot more difficult than most marketing apps, services, platforms, or technology creators want to admit.

Because of that problem, marketing providers have offered personalization services which aren’t true personalization; instead, they are smaller and smaller segmentation loops. While a more specific segment is going to be more effective than a broad segment, it’s still a segment.

As a result of the frustration with the way ‘personalization’ has been used to mean so many things except true one-to-one marketing, a new buzzword has emerged: individualization.

Individualization is the new personalization

Individualization is the word marketing executives are using when they start seeking the tech, the tools, the services for their brands. When marketing execs ask for individualization, they’re saying, “We know that you segment more specifically, and that’s great; but how do you help us do true one-to-one marketing?”

The reason that marketing executives actually have to make this distinction is simple: it’s really damn hard to make truly individualized marketing happen in the real world.

Tag, track, and automate

It’s simple enough in the digital world, which is why e-commerce businesses have had such an advantage over brick-and-mortar businesses for the last several years.

In the digital world, everything can be digital tagged, and, thus, digitally tracked: the data can be automated once the tagging and tracking systems are in place.

When the data collection is automated, it can then be analyzed, converted to targeted actions, and the corresponding actions disseminated automatically. This automation factor is key for one-to-one marketing, because one-to-one marketing it simply not something that can be done at scale by humans.

Problems for brick-and-mortar retailers

But in the physical world, the real world of tangible goods and products, the world where people actually walk through doors, handle items, talk to staff, deliberate, examine, and purchase (or don’t), true personalization - one-to-one marketing - is much harder to achieve.

Items - and customers - have to be tagged in a way that is automatic and not intrusive, an action that’s much more difficult when they exist physically. Customers don’t tend to respond positively to a staff member clipping a tracking device to their sleeve when they walk through the door.  Physical items are much easier to tag (barcodes, for example) but the data that is really valuable in one-to-one marketing isn’t about the physical inventory, per say: it’s about how the customer interact with the inventory.

The need for a brick-and-mortar solution

Without tagging, how can customers be tracked? And without tracking, how can data be collected? And without quick, automatic data collection, analysis, and action creation-distribution, how can any one-to-one marketing be achieved in the physical world?

Short answer: it can’t. The tagging, tracking, and data-to-action automation have to be in place in the physical world for one-to-one marketing to exist at scale in the brick-and-mortar retail environment.

The marketing service that brick-and-mortar retailers need is a service that does all three essential things: tagging, tracking, and data-to-action automation. Up till this point, that service hasn’t existed. There are services for tagging, services for tracking, and services for data analysis, insight derivation, and action creation, on a varying scale of automation.

How physical retailers compete with digital retailers

So marketing execs have been grabbing the services that promise the best results and hodge-podging them together with their own necessary operations technology (like point of sale and inventory tracking). Brick-and-mortar retail is doing its very best to achieve, with a jerry-rigged version of still developing technology, the same sales increase and revenue growth results that ecommerce retailers have been enjoying.

The truth is that it’s just hard to win a race when your car is 20 years older and 10 times less powerful than your competition’s.

It sounds hopeless for physical brands, but there’s good news.

The good news is this:

1. People still really like shopping in real stores, and

2. The comparable technology for brick-and-mortar retailers is finally available.

A smarter tagging option

What’s the one digital item that all customers have with them, all the time? That’s right: mobile. The migo IQ platform uses the mobile device that customers already carry (and use) in store to tag customers. That way, migo IQ can create anonymous user profiles (keeping data safe and secure) which works with the tracking and automation features to create a “digital layer” on top of the physical store environment.

A physical tracking option

Tracking the movement of a physical person in a physical environment has been the point on which most real-world marketing personalization services have failed. Migo IQ uses beacons, tiny transmitters that can be easily installed on store shelves or display units, to create a digital, trackable grid in the brick-and-mortar retail store. As the customers (and their phones) move throughout the store, the beacon signals track with them.

Automation for data and actions

The last ingredient in an individualization marketing service that is actually usable at scale is data automation. Migo IQ achieves data analysis and resulting actions automatically with machine learning. The machine learning is built into the migo IQ platform; as data is collected (via mobile and beacons), the migo IQ machine learning engine analyses it, finds patterns, and  generates one-to-one offers and interactions automatically.

The beacons enable the migo IQ platform to deliver marketing messages that correspond to the exact location of each customer in the store, in real-time. The result is not only true individualization, but proximity-based, individualized marketing that happens in real-time as the customer shops.

The result: individualization for brick-and-mortar retailers

Think of all the things you know about personalization, proximity marketing, and mobile marketing. Now imagine how the combination of having all three of those, working together automatically in your store, would look: Pretty good, right? The result for brick-and-mortar retailers is increased sales, longer time spent in store, and higher revenues.

Segmentation beats generic marketing, by a long shot. But personalization - true personalization, also known now as individualization, beats segmentation every time.

When you add proximity to that dynamic marketing mix, and deliver the resulting messages via the method that customers prefer, you win: customer attention, customer engagement, customer loyalty, increased sales, and increased revenue.