Making Algorithms More Human [Future Of Retail]

Making Algorithms More Human [Future Of Retail]

PSFK Labs looks at Adaptive Personalization tools that create perfectly unique experiences for every customer.

  • 17 november 2013

How well does your favorite brand or retailer really know you?

Think of the last time you received an email or promotion from a company who thought they understood the person behind the screen. Despite being a loyal customer for many years, their message felt mass-produced and misguided, likely a result of faulty data that could have been out-of-date or come from  an aggregated list of customers just like you. These algorithm-driven attempts to connect with consumers are well intentioned, but they are often based on comparative generalizations about certain demographics and make the assumption that people are similar or share the same motives as like-minded peers.

These attempts to create magic moments hit their intended targets from time to time, but when they miss their mark, they can leave customers feeling that they’re merely a string of 0’s and 1’s being crunched by a machine. In an attempt to create personalized interactions with their customers, many companies seem to be forgetting the the individual and going with a one-size fits all approach instead. How can these same ‘smart’ algorithms be used to make every connection more relevant to each person’s needs?

New consumer-facing platforms are employing adaptive algorithms to learn shopper preferences over time, offering a set of tailored recommendations that leverage past behaviors and immediate context to begin to anticipate current and future need. These more sophisticated on-boarding systems and customization platforms are part of a trend in PSFK Labs‘ Future of Retail report we call Adaptive Personalization.


Consumers crave more personalized interactions and the companies who find ways to connect around the right occasions and motives are bound to benefit. A recent survey from Juniper research found that relevance improves e-mail campaign revenue by nine times over untargeted “broadcast” mailings and improves net profits by an average of 18 times. Getting to know customers enables companies to enrich their awareness around when and where to connect, while also opening up new opportunities to create unique offerings and grow their business. Peter Rivera, Executive Creative Director at Infusion tells us, “New revenue will not materialize unless retailers begin to differentiate their customers on the individual level and provide various tiers of service tied to their history of interaction. Retailers now need to start thinking about every interaction as an opportunity to become smarter about a customer, not just a vast demographic or type.”

Getting to know your customers is more than accruing data points. It’s about using that information to create a series or unique experiences for them. PSFK Labs‘ Director, Scott Lachut reminds companies that “Your shoppers want to be treated like individuals. Develop personalized tools and services that build on your shoppers’ previous interactions with your brand or store to add value to the overall experience.”

As you consider how to put these personalization tool in place for your customers, we recommend asking these key questions:

  • How can you design interactions and on-boarding experiences to best get to know your customers?
  • What data can you collect or questions can you ask over time to continue improving your knowledge about your customers, helping to foster a more loyal relationship?
  • When can you leverage unique behaviors or product life cycles to target specific customers with messaging and promotions?
  • What bespoke services can you offer based on a customers interests?
  • What dynamic systems can you use to help track customer profiles and react to their individual interests and needs?
  • Are there intimate moments in your customers’ lives that you can connect around for greater relevancy and support?

In the fourth edition of the Future of Retail Report, PSFK Labs brings together two interconnected themes and eleven key trends that provide a foundation for the modern shopping experience. The findings are brought to life with best-in-class examples, actionable strategies and leading questions to inspire leading retailers and brands. Join us at our San Francisco conference on Nov. 21st where talks from retail innovators will bring the key themes to life.


Contributed by: Wesley Robison

Images via: Webguyinternet & CBS News

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