In today’s competitive markets, businesses need every advantage they can get in order to survive. While retailers have been panicking and scrambling to cut prices, there’s a classic business model that’s flourishing and giving retailers such as Amazon a run for their money.
That business model? Marketplaces. One reason these businesses are successful is straightforward; high margins because goods and services are provided by third parties. The other major reason—they’re able to scale rapidly.
Despite those advantages, the marketplace landscape is saturated with thousands of properties, and it’s only getting more saturated as each day goes by. Add to this the fact that marketplaces have many moving parts—buyers, sellers, general operators—and it becomes clear that these entities need any and all advantages they can get to stay ahead of competitors.
Enter personalization. Extreme personalization, actually. A relatively new approach to communication that marketplace marketers can leverage to enhance the experiences on their platforms, where communication is tailored on a 1-to-1 basis. In the past, this type of personalization was difficult, however today, modern engagement solutions are using artificial intelligence to enhance the customer experience.
With AI, it’s possible for marketplaces to reach out to individual buyers/sellers in the ways they want to be reached. This is done by learning consumer behavior and understanding individual preferences from that information.
What is personalization?
Personalization is when marketplace operators and sellers customize content and the purchase experience for the individual consumer. Think, an email that says, “Hello [First Name], we have a sale on [Product Category] today.” Or, a push notification that exclaims, “Get 10% off the greatest cell phone accessories.” In these cases, the marketplace operator may be aware of the customer’s name or general interests, but that’s about it.
This limited level of personalization achieves two objectives. It makes the customer feel special, potentially increasing affinity towards the marketplace. It also empowers the buyer to cut through the noise and hone in on marketplace storefronts and products that they’re more likely to enjoy.
Although useful to a degree, (old-school) personalization is far from granular. In many cases it’s based on and limited to basic demographics such as age, gender, location, and other high-level elements. From the eye of the marketplace operator, two 25-year old females who live in San Francisco are the same and should be communicated with the same. This means that these two buyers would receive the same deals and messages along the same channels and at the same frequency.
By sending messages that only personalize content, rather than also personalize the messages for context, like the channel it’s sent on or the time it’s sent—or not sending it in the first place if it will hurt rather than help, marketplace operators risk alienating their customers. For example, some customers might appreciate a mid-day deal alert, while others would view it as a distraction. Sending communications without the right context not only leads to increased opt-outs, but also puts operators at risk of alienating buyers.
The solution: The rise of extreme personalization
Enter, extreme personalization. This is when marketplace operators are able to consider the content and context of their messaging. Modern buyers and sellers have unique needs and as such, the user experience needs to be tailored to each individual.
For example, a marketplace seller might decide to offer a flash sale to select customers who opt in to these deals. In this unique instance, it makes sense to deploy push notifications in order to get the fastest response.
Now taking that a step further, imagine being able to tailor the text of each notification to the consumer, in order to drive more conversions with a personal touch. That’s what extreme personalization makes possible.
Let’s take another example. Email newsletters. In the past, emails would be sent in batches, regardless of reader preferences. Extreme personalization enables marketplace operators to send emails when individuals are most likely to open them. One customer might appreciate a 12pm email, while another might check their email at 8pm—and only on weeknights.
In order for marketplaces to thrive, let alone survive in today’s competitive era, they need to leverage a deeper—extreme—level of personalization that is only made possible through tools powered by artificial intelligence. Now is the time for marketplace marketers to approach their communications with extreme personalization. Failing to do so puts their sites at risk of extinction.
For more information on extreme personalization and how you can make it a reality in your marketplace, be sure to check out The Kahuna Blog. Simply click the button below!