In December I began posting interviews with leading technologists in the recommendations and personalization arena, asking their opinions on trends and futures. The experts were largely in agreement about where this digital marketing niche is headed. Their predictions for 2013 and the future highlight 3 trends that have already begun to emerge: mainstream adoption, broader solutions, and wider application of the underlying technologies.
The interviews are with leaders from Adobe Systems, Avail, Baynote, emailvision, Locayta, RichRelevance, and SilverEgg. These companies all offer services used by online marketers to deliver personalized content to visitors, for example showing product recommendations to shoppers.
First, there was broad agreement that 2012 saw recommendations move into the mainstream in retail and that usage will increase in the year to come.
Pontus Kristiansson, co-founder and CEO of Avail, said it this way: “Virtually all the early adopters have now installed some form of [recommendation] solution – in fact, some of them are already revisiting their supplier selection, because of the amount of new functionality available. Instead, most of the demand in 2012 came from the ‘mass market’ – for example, large but slow-moving multi-nationals, many “bricks and mortars” opening up online and lagging sectors such as travel. Recommender systems have finally become a box on the e-commerce platform checklist.”
Junko Nishimura, COO and co-founder of Silveregg saw the same trend in Japan: “Recommender systems have become an integral part of [ecommerce] sales in Japan. Almost all major sites with more than a few dozen products now offer some form of item recommendation.”
A second important trend is the broadening of recommendations into personalization solutions that address not just product recommendations on a Web site or in an email, but any element of any customer interaction. In my opinion, managing this breadth will be impossible if available tools remain fragmented, addressing individual channels, devices, and touchpoints.
Kimen Field, Senior Product Manager at Adobe Systems Incorporated said it this way: “[Clients are moving] toward including recommendations in a broader optimization and personalization strategy, rather than just offering (and implementing) Recommendations on its own. The market has realized that product/service/content recommendations need to be very relevant to the user at a given moment, as well as well integrated with the whole consumer experience; it’s easier and simpler to do it all with the same solution and experts involved.”
André Brown, co-founder and CEO of Locayta, foresees that “Product recommendations will become more important in delivering a personalised customer experience – however, it is not as simple as just turning on a new product recommendation system.” In the interview, Andre cites his five challenges that must be addressed.
James Doman, Product Marketing Executive at emailvision, observes “Recommender systems will help businesses drive further offline-online integrations with iPad in-store retail systems, traditional POS systems, loyalty cards, in-store displays, mobile app/SMS advertising – the opportunities to better target and personalize interactions in the physical world are immense and will help businesses deliver a stronger, positive customer experience.”
Jake Bailey, VP of Product Marketing and Solutions at RichRelevance says: “Personalization technologies are still in their infancy. There are so many other channels where this technology has not been used effectively. Also, the ability to connect consumers’ personal shopping experience across touch points will dramatically increase.”
The third trend, and the most important for the future of digital marketing, is the spread of the technology to new arenas.
Pontus Kristiansson observes, “We have been saying for years that we’ve only begun to scratch the surface of what is possible from a technology perspective…But there is still so much that can be done in terms of understanding and convincing the shopper. For example, most recommendations are still centered on individual products. The customer journey is much wider than that.”
Junko Nishimura at Silveregg concurs: “We have only seen the tip of the iceberg. Today we have islands of optimization. Recommendations are not well coordinated with advertising campaigns and landing pages, and powerful signals from consumers are being ignored.”
Dan Darnell, VP of Marketing and Product for Baynote, predicts that “The fundamental technology supporting recommender systems, such as machine learning, will support the next generation of customer experience solutions.”