“Ask L2” is a weekly series where we answer questions about all things digital.

Question: What are best practices for delivering personalized experiences to consumers?

Digital personalization is critical for brands looking to differentiate themselves from pureplay retailers like Amazon, which is on track to become America’s largest clothing retailer. With six in 10 consumers willing to pay more for a brand that personalizes an experience or service, brands must use digital platforms to build meaningful relationships with consumers to offset the allure of Amazon discounting.

The easiest way to provide a personalized experience for a consumer is to first capture data through various methods (e.g. account sign ups, on-site behavior). However, many brands fail to be transparent about why they are collecting the data and putting that collected data into action.

More consumers would be willing to share information if the brand was clear on how they were using the information than being offered an incentive. However, just 14% of brands explain why they collect data during account signup and only 13% of brand sites explain the brand’s cookie or privacy policy in a pop-up. Conversely, nearly half of brands offer a reward for newsletter or account signup, 86% of which are discounts.

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Travel brands provide sophisticated methods of capturing data, but do little with that information to provide personalized experiences. Department Stores and Big Box brands provide the best personalized experiences, but have an inherent advantage with broad consumer bases that include customers of all genders, ages, and locations.

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Brands with a live chat feature can transition a personalized, in-store concierge experience to the online environment, but only half of brands observed in the L2 Intelligence Report: Data & Targeting 2016 incorporate the feature in their sites. When correctly deployed, live chat should mirror the efficient and proactive nature of in-store sales associates, which includes minimal wait time, personal communication, and a deep understanding of the consumer’s interest. Nike offers a best-in-class experience where the live chat agents greet consumers by name and use recent site browsing behavior to communicate information and recommendations corresponding to products the consumer recently viewed. If the chat becomes disconnected, Nike agents send a follow up email to ensure that the consumer no longer requires assistance.

An alternative for data collection is guided selling tools that combine data capture and personalization into one seamless consumer experience. Brands investing in these site capabilities have increased by 50% year over year. Yet even with this rise in adoption, brands have struggled to link data collected from diagnostic tools with consumer profiles—less than half of brands with diagnostic tools allow consumers to save the results of these tools to their account.

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Personalization initiatives should prioritize mobile, which surpassed desktop recently in worldwide internet use and gave a boost to this year’s Black Friday/Cyber Monday shopping weekend. As of now, brands create apps to provide unique, personalized experienced in part due to the ease of development. However, personalized mobile site experiences could be more effective as most users visit only a handful of apps consistently. Olay has recognized this trend and launched a “mobile skin advisor” that analyzes the user’s photo, identifies skin issues by facial region, and recommends products for each of these problem areas. The user can easily transition from the mobile site to the camera and back again, and the tool is also promoted at the top of the mobile and desktop homepage.

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