Magazine article CRM Magazine

Tread Cautiously with Personalization: Retailers Can Look at Customers' Locations, Past Purchases, and Even Their Computer Brand to Customize Content

Magazine article CRM Magazine

Tread Cautiously with Personalization: Retailers Can Look at Customers' Locations, Past Purchases, and Even Their Computer Brand to Customize Content

Article excerpt

[ILLUSTRATION OMITTED]

Orbitz found itself under a spotlight recently when the Wall Street Journal published an article about the online travel agency's experimental method of segmenting hotel listings by the type of computer a shopper was using. Based on research that shows Mac users tend to book more expensive hotels than their PC counterparts, Orbitz has taken personalized offerings one step further, by occasionally positioning higher-priced hotels more prominently on a Mac user's screen.

"We've identified that Mac users are forty percent more likely to book a four-or five-star hotel than PC users. A similar skew applies for iPad users," wrote Orbitz CEO Barney Harford in a blog post. "We can use that information to influence which hotels we recommend to users we see searching on a Mac or an iPad versus a PC."

Orbitz's move to personalize its offerings using consumer data is just one of the latest examples of the growing trend of retailers trying new ways to hook consumers with relevant merchandise and service offers.

Despite the obvious benefit of giving customers exactly what they want, segmenting shoppers to provide them with more relevant offerings is a tricky business, warns Nikki Baird, managing partner at Retail Systems Research.

"I think Orbitz is an example of both the good and the bad of segmentation. From what the data told them, it made perfect sense: People shopping on Macs tend to buy more expensive hotel rooms, so they should get those options presented up front versus PC users. Theoretically, Orbitz is just helping their customers get to the answer most relevant to them faster," Baird observes.

The problem, Baird says, is that Orbitz risks alienating customers by not personalizing their offers accurately enough. "A lot of Mac users felt like the generalization didn't apply to them personally," she says.

As technology continues to advance, the use of customization is growing. Half of the major online retailers in the United States used some personalization technique last year, compared with approximately 33 percent the year before, according to Internet Retailer's Top 500 Guide.

The failure to provide customers with offers tailored to their shopping behaviors and interests could end up costing companies, according to Shai Atanelov, an e-commerce accounts specialist at New Edge Design, a Web design and Internet marketing company. …

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