This article covered a panel session at Campaign's Digital360Festival in Shanghai on March 28, 2019. For all our coverage of news and video interviews with key guests, see the link here.
You arrive at the hotel and the staff already know your individual wine, music and particular towel fluffiness preferences. But while this might generate warm fuzzy feelings in guests (or emotions of a different kind, depending on their mood), personalisation has become more than just a nice-to-have and can unlock between 10-30% in revenue and retention, according to a recent McKinsey study.
This is not why we do it, however, stated Henry Shen, chief strategy officer, greater China, at McCann Health, during a panel discussion hosted by Campaign China senior reporter Jenny Chan at Campaign's Digital360Festival in Shanghai. Just as Buddha preaches differently to everyone because he sees every person as different, so the key principle of personalisation in the commercial world must be about respecting individuals, he said. "30 or 40 years ago was a time of uniformity [in China]. We all remember that dark time. But now, everyone is wearing different colours, styles, it is a time of modern humanity. Everyone is born different but equal." When considering personalised approaches, brands need to learn to address these differences between people with wisdom and serve them with loving kindness, he said.
Offline, in Shen’s opinion, offers opportunities to do this much more effectively than online. “We are living in abstract form online. Offline we are more vivid, it’s a more body-to-mind experience." He illustrated this deftly with an anecdote about newly wealthy Chinese people travelling to a Chanel store for the first time to go shopping and asking the shop assistant: “Is this a ‘Chanel’ (pronounced 'channel') store?” "Yes sir", was the reply given by the well-trained sales person, because of their appreciation for the human individuals in the situation: “You're right, this is a 'Channel' store."
While they operate in very different sectors, Shen’s fellow panellists Zoe Zhao, new retail associate director for Mars China, and Vivian Yeh, VP of digital marketing greater China, Accor Hotel Group, concurred with Shen that offline personalisation is easier than online.
“We can only provide a simplified experience in the online world because consumers really welcome physical experiences,” said Zhao. This being said, Mars has recently launched a Tmall store that enables people to mix and match types of doughnut and send them to friends along with a personalised message. Eventually, she stated, this will go further, with options for customers to design doughnut flavours and shapes as well.
The move represents a significant shift in Mars’ business model. “Our supply chain was designed for scalability,” said Zhao. “We feel if we want to tap personal needs, we need to transform the business. We used to rely on channels and retailers so now we need to change the way we work with operators and totally change the supply model. That’s been really painful in the last few years.” The Tmall store is one of the early fruits of this labour, proving Mars’ ambition to embrace the age of personalisation in China, said Zhao.
Personalisation in the hotel industry hasn’t required such a painful shift, said Yeh, because it has to some extent always been part of hospitality's DNA, but developments in technology are generating some significant improvements. Since 2016, Accor has had a special team called Impact working on ways to use tech to improve the hotel experience, shifting priorities away from issues like the speed of check-in to conveniences such as introducing online payments, a major investment that Accor plans to launch soon.
What happens, however, when brands, assisted by new technology, become so in-tune with people’s supposed preferences that they fail to serve them anything but their favourites? This ‘margin of utility’ theory — that the more you enjoy something, the more quickly you get tired of it — is essential to consider in the personalization context, said Shen. It tripped up Facebook in the social media company's early days, when the site’s algorithms so efficiently served people content it knew would appeal to them that users were completely turned off. “If you keep feeding someone with same knowledge, it creates a provincial perspective in the human mind,” said Shen, “like a frog sitting on the bottom of a well who only sees part of the sky. That’s very dangerous. There are both societal and commercial reasons to learn how best to take advantage of the data.”
To this point, Yeh describes going to a breakfast stand in a hotel where she was asked whether she’d like her 'usual' eggs. It could mean she’d get served the same dish every time, she realised. Yeh sees a distinction between such mindless personalisation and truly personal service. “I think first of all when we say personalise, it doesn’t have to be over-pampering...In the Raffles hotels in our portfolio, there is a personal butler in every room, but he is invisible. And when you want something, he is already there, maybe already with a solution in hand. I think that is personalisation. Some people in the industry take personalisation over the top, so the staff are always around and that’s a bit disturbing. Personalisation has to be from the heart.”
Absolutely, said Zhao: a key Mars philosophy is about respecting consumers’ right to choose whether they want to be engaged or not. But Western and Eastern consumers may have different perspectives on this idea of respect for their personal privileges, Shen pointed out: while the Western view is that privacy is a human right, Eastern consumers may be more willing to ‘trade’ privacy for other privileges like convenience and safety. This is an opportunity for marketers to take advantage of — but carefully, said Shen.