Personalization is a hot buzzword in retail right now. With 83% of consumers demanding it – and 23% saying their personalization expectations aren’t being met - the battle is on. In this presentation, McKinsey's Brian Elliot details the value of personalization, and how retail leaders do it at scale by rewiring how their organization works in six essential areas.

1. Personalization:
Winning
customers’
hearts & minds

2. 2SOURCE: World Retail Congress survey March 2017; TimeTrade research on peronalization among 100 CEOs; MyBuys customer survey (n=1,004 US adults)
of customers want
personalization,
but …
83%
of them think
retailers are doing
a good job with it
only 23%

3. 3
Personalization is a high priority for retailers
8% 64% 23% 5% 0%
Top
priority
In Top 3
priorities
In Top 5
priorities
Important,
not Top 5
Not
important
SOURCE: World Retail Congress survey March 2017
How important is personalization relative to your other
marketing initiatives this year?

4. 4
Most companies are in the early stages of personalization
15% 5% 43% 5%
Fully
implemented
Currently
scoping
On the horizon
for 2017 / 18 Not a focus
What is the current state of your personalization initiatives?
28%
Proof of
concept
implemented
SOURCE: World Retail Congress survey March 2017

5. 5
Personalization: Unlocks short- and long-term value
uplift
potential in
revenue &
retention
10-
30%
more
efficient
marketing
and cost
savings
10-
20%
increased
customer
acquisition
3-5%
higher
satisfaction
and
engagement
5-10%
Unlock near-
term value
Sustain long-
term health of
your customer
base

6. 6
3. Think in
journeys
2. Get the
vendor
funding right
Rewire the way you work
6. Scale what
works
1. Democratize your data
4. Break down walls
5. Customer
specific and
context relevant

7. 7
Essential #1:
Democratize
your data

8. 8
Get going now with what you already have
Form a 360° view of your consumer
Desires
What do they want?
Marketing
effectiveness
How do they engage?
Transactions
What do they buy?

9. 9
Essential #2:
Get vendor
funding right

10. 10
To profitably personalize promotions, you usually have to get
vendor funding to come along
Populate
Duplicate
funding from
circulars
Allow vendors to
submit their own
special offers
OFFER BANK
Vendor A
Vendor B
Vendor C
Vendor D
Vendor E
Bid Dynamically select
and execute
1 2 3
ROI for Customer A
1 2 3
ROI for Customer A
with vendor funding
Offer #1
selected
Offer #3
selected

11. 11
Essential #3:
Think in journeys

12. 12
Improving end-to-end experience begins with knowing
which micro-journeys matter to customers
Replenish-
ment Shop
produce
Shop
perimeter
Receive
service at
deli counter
GROCERY JOURNEYS
Fill in
Pick up fish
at specialty
counter
Grab carton
of eggs
Instant
consump-
tion
Browse
center
store
Choose
prepared
foods
Eat in
store
Checkout
with coupon
Find
product
Search for
coupons
Pick up your
order from a
store
associate
Receive
updates
about
order
Fill cart
online
Deal
seeking
Loyalty
program
Online
ordering
Use
card at
checkout
Receive
commun-
ications
Enroll
BUYGROCERIES
1
2
3
4
5
6

13. 13
Essential #4:
Break down walls.

14. 14
New marketing campaigns take only 3 – 5 days to
coordinate with cross-functional agile teams
Extended
business team
(part time)
IT
Business
Line
Risk
Legal
Agile Marketing
Team (full time)
Paid
Search
Specialist
Data and
Analytics
Expert
Email
specialist
Prog.
Display
Specialist
Copy
Writer
UX
Designer
Front End
Developer
Lead/
Scrum
Master

15. 15
Essential #5:
Be customer specific
and context relevant

16. 16
What will she do next?Who is the she?
Account information
3rd party data
Device triangulation
How does she shop?
Multichannel interactions
Online behavior
What does she buy?
How can we talk to her?
Contact information
Contact history
Geo-location
Detailed transactions
Channel of purchase
Pricing data
Why does she buy?
Market research
Satisfaction
Lifecycle
Propensity to buy
Response
Churn
1,000s of derived and predictive
variables allow us to be very specific

17. 17
Essential #6: Scale the use
cases that work

18. 18
Personalized weekly email with offers:
 New item
 Back in stock
 Pre-markdown targeted offers (your style,
your color, and your size)
Well-timed offers:
 Spaced by customers’ normal purchase cycle
 When they are late or when it brings a full
basket
 Weekly/monthly stock-up
 Regular gifting - birthday, anniversary, etc.
Figure out which use cases work

19. 19SOURCE : Periscope By McKinsey
Text
contact@periscope-solutions.com
The full speech: (https://www.youtube.com/watch?v=NBjFQ0RQCkg)
www.periscope-solutions.com
https://twitter.com/periscope_solns
Brian Elliott
Managing Partner,
Periscope By McKinsey
Contact:
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