Retail Puts Hyper-Focus on Digital Personalization, Increasing Pressure on Hospitality Experience Standards

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4 Tactics restaurants and hotels must employ as major retail brands prioritize customized digital experiences redefining service expectations across sectors

Retail Puts Hyper-Focus on Digital Personalization, Increasing Pressure on Hospitality Experience Standards

By Dorothy Creamer, Editor-in-Chief - 11/14/2019

Consumers are expecting and demanding brands to blend the physical world with the digital, while leveraging those touchpoints to offer up customized messaging and experiences. More than a third of potential guests will choose a restaurant, take-out option or hotel based on whether or not personalized communications are part of the experience. Data from Hospitality Technology’s 2019 Customer Engagement Technology Study, reveals that 41% of guests will choose a hotel and 33% and 35% of potential diners will choose a restaurant for dine in or takeout respectively based on whether or the brand provides personalized communication. The research also paints a picture of guests that rely on mobile devices to control all aspects of their lives and want the brands they choose to interact with to meet them on those devices.

The saying could go, as goes retail, so goes hospitality. As consumers become conditioned by the conveniences they enjoy at home or in their preferred retail environments, those experiences become expectations for every interaction they have with brands across the board.

Alyssa Raine, divisional vice president, brand marketing & creative, Walgreens

The new table stakes for retailers including Walgreens and CVS is personalized marketing through a digital lens, according to top marketing executives from the brands, speaking at the Path to Purchase Expo (P2PX) in Chicago on Wednesday. Hospitality Technology’s sister publication, Retail Leader, reports that both Walgreens and CVS executives highlighted the importance of “improving how brands reach customers digitally through messaging that feels personal.”

In her keynote address, “Combining Technology and the Human Touch to Improve the Customer Experience,” Alyssa Raine, divisional vice president, brand marketing & creative, Walgreens, cited a statistic claiming that the majority of consumers (80%) are more likely to do business with a company that offers personalized experiences.

To deliver this to Walgreens customers, Raine used the example of how the Walgreens mobile app, the largest loyalty program in the U.S. with 90 million members, gamifies loyalty by allowing guests to earn points based on how many steps are taken in a day.  

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Marcy Brewington, director of in-store marketing strategy, CVS Health

Also presenting on the P2PX stage was Marcy Brewington, director of in-store marketing strategy, CVS Health, in a session titled, “Building Customer Confidence with Purpose.” CVS had announced a planned 2020 overhaul of its in-store signage across 9,000 stores.

Brewington shared insights from studies done of CVS locations that revealed that shoppers would miss relevant messaging because they were overwhelmed by the signage. The new messaging strategy, according to Dana Stotts, SVP, strategic director, Arc Worldwide Messaging, CVS research/redesign partner, will be driven by the key tenets: entice, announce, navigate, inspire, convert and embrace.

As hotels and restaurants look to customer engagement strategies in 2020, those tenets should ring true as well.

4 Lessons to Apply from Retail Digital Personalization
  1. Entice: Bottom line the product or offering must be enticing, whether that be good food or a comfy bed, but add to that with appropriate, meaningful offers. Artificial intelligence and predictive data is going to be game changing here. Look at brands like TGI Fridays that have already seen big wins.
  2. Announce: Use appropriate digital means to alert existing, potential and lapsed customers of what you are offering.
  3. Navigate: Nothing ruins a good experience if the operational logistics fail. Where must diners go to get their pick-up order rather than waiting on line? Make sure that’s communicated either via mobile alert or clear signage on property. Hotels too can utilize digital signage or lobby kiosks to offer direction. Chatbot and voice technologies also can offer a way to assist guests find their way easily and avoid friction points.
  4. Convert: It’s a disloyal age if you want to be pessimistic. Third-party service providers and aggregators have complicated the field for both restaurants and hotels. So which comes first, the experience or the expectation…and does it matter? Not really. Restaurants and hotels should identify their strategy for converting customers however possible. If in the case of restaurants with third party delivery aggregators, identify a marketing strategy that will make sure loyalty lives with the brand and not the third party. In a recent earnings call, Rob Lynch, CEO of Papa John’s made the salient point that customers will have third party delivery apps on their phone, instead of restaurants’ apps. If that is to be believed, all the more reason to invest and rethink what will make hospitality brands stand out in the minds of customers from both a physical and digital experience.