Can we break the fourth wall for just a second?
One of the ongoing themes we’ll be discussing on this blog is AI in action. We’re very interested in how brands and businesses use artificial intelligence in their work — and the kinds of results these tools provide, whether good or bad.
As the inaugural post around this theme, we’re taking a look at how leading brands, like Marks & Spencer (M&S), are using AI tools in creative and effective ways. In this case, the clothier was chosen as a finalist for Digiday’s 2024 Content Marketing Awards based on how it used AI-powered tech to achieve its revenue growth goals.
Let’s find out more!
What Was the 2024 Digiday Content Marketing Awards All About?
Digiday’s Content Marketing Awards recognizes companies and/or particular campaigns that “use content to modernize media and marketing.”
That said, each year’s awards have a particular focus, emphasizing something different. This time around, Digiday Media, which organizes the awards, was interested in how companies use artificial intelligence to create and deliver more relatable, interactive marketing campaigns to improve customer engagement.
Moving Targets: How M&S Used Hyper-Personalization To Speak to Customers
As a finalist, Marks & Spencer earned its place on the list specifically for its creative use of customer data, funneling information into an innovative AI tool to transform marketing messages dynamically. The brand pulled valuable information from all kinds of places, including:
- Customer profiles.
- Web sessions.
- Customer responses to over 700 million emails.
- It’s Sparks loyalty program.
In simple terms, M&S fed all that data into a tool capable of personalizing web content in real-time based on words and terms that particular customer segments respond to best — which they learned from their massive set of data.
In slightly more complicated terms, the tool employs advanced machine learning, natural language processing (NLP) and deep learning transformer models that dissect, analyze and understand copy intention to create dynamic, on-brand messages that entice action from customers. The ultimate goal here is to increase revenue by ‘speaking’ to customers in ways that truly resonate.
If you ask us, that’s pretty darn impressive and certainly worthy of consideration for an award that’s all about AI and messaging relatability. While they didn’t end up scoring a spot at the Digiday winners table among huge names like Marvel Studios, eBay and even the Kansas City Chiefs, M&S’s recognition alone speaks volumes for the future of AI in marketing and should be all the evidence they need to begin bringing AI into their corporate conversations.
With all of that in mind, we want to dive a little deeper into this idea of personalization. And not just the kind of personalization marketers are already used to; rather, the real-time, dynamic nature of what Marks & Spencer did here and why it got recognized for an award. In some circles, they’re calling this hyper-personalization, and its value shines the brightest in retail.
What Hyper-Personalization Could Mean for the Future of the Customer Journey
As we know, personalization and specifically personalized content isn’t a new idea to marketers. But the concept of hyper-personalized messaging may be.
It’s only within the last year or two, as AI broke onto the scene and became accessible, that this idea of hyper-tailored content became plausible. It requires data — and a lot of it — as well as the capability to make one-the-fly changes to messaging.
Here are some reasons why we think this approach to personalization will grow increasingly popular:
Improved CX
Hyper-personalization ensures that marketing messages, product recommendations and interactions are relevant to the customer’s specific preferences and behaviors. Providing such a tailored experience makes customers feel understood and valued, which can help increase overall satisfaction and engagement.
Increased Conversion Rates
By delivering personalized offers and content that resonate with the individual, hyper-personalization can significantly improve conversion rates. Data shows that 71% of consumers expect personalization from brands — and 76% feel frustrated when they don’t find it. Moreover, 78% of consumers are more likely to become repeat customers of companies that do personalization well.
In Marks & Spencer’s case, their dynamic messaging strategy improved the brand’s conversion rates by an average of 20%.
Seamless Omnichannel Experiences
Hyper-personalization helps integrate customer data across multiple channels, allowing for a more cohesive and consistent experience. Whether the customer is interacting via email, social media, a mobile app or in-store, the messaging and offers remain personalized and relevant.
Hyper-Personalization Comes With Cautions
When it comes to AI in general, folks are nothing if not even a little concerned or cautious — and reservations are a good thing. Something like AI, which has umpteen potential, needs to be treated with care and caution to avoid mayhem.
With that in mind, here are a few reasons why marketers using hyper-personalization need to walk a delicate line:
Privacy and Data Security
A lot of marketing strategies require some amount of data, but hyper-personalization needs a lot of it. Boatloads. And the more data something or someone collects, the higher the privacy concern. Consumers may feel uncomfortable with the level of data collected, especially if they don’t know how it’s being used or stored.
Here are some numbers to consider, courtesy of the International Association of Privacy Professionals (IAPP):
- Nearly 68% of consumers throughout the world said they are either somewhat or very concerned about their online privacy.
- 57% of global consumers view the use of AI in collecting and processing personal data as a significant threat to privacy.
Companies need to be transparent about how they’re using AI to personalize their content. When they are, they’re rewarded, as 64% of consumers say that clear privacy policies enhance trust.
Over-Personalization
There’s a fine line between personalized and creepy. If marketing content becomes too tailored to a consumer, it can begin to feel invasive, overreaching and even maliciously manipulative — which can be discomforting rather than exciting and engaging. In time, this could lead to customers opting out of marketing communications or developing a negative brand perception.
To that end, if consumers feel that Gen AI is too invasive in predicting their preferences and behavior, it can erode trust.
Using, Not Abusing, AI
Like anything positively powerful, AI is best used with responsibility and control. Use it too much, too often and you risk losing the very same competitive edge it can provide in moderation.
While it’s unclear how Marks & Spencer customers felt about the hyper-personalization from a moral perspective, the company’s boost in revenue speaks for itself. The best approach to AI, in general, is one of balance; creating an equilibrium between not enough personalization and too much. Here are a few strategies that can help achieve that:
- User-controlled personalization: Allowing consumers to opt in and control the level of personalization is a powerful way to enhance relevance without being intrusive; providing a personalized experience while respecting consumer preferences and boundaries.
- Segmentation: Marks & Spencer got this part right, as far as we can tell. Basing personalization on broader customer segments rather than individual customers enables dynamic content creation without using highly personal data.
- Transparency: Providing an explanation or a notification that informs users about how their preferences or browsing habits influence recommendations can make users more comfortable with personalized content.
To us, it’s simple: When you operate with respect and consideration for your customers’ privacy and use a balanced approach to AI content marketing, you, too, could boost revenue just like Marks & Spencer.
