Barnes & Noble's Localized Comeback: A Lesson in Personalization
Barnes & Noble's success comes from shifting to local curation and leveraging community connections, moving away from centralized buying and broad algorithms.
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1. My Interesting Conversations
Amidst all the genAI announcements and last rounds of conferences before the holidays, one business news item stood out for me. Barnes and Noble is making a comeback. As reported via CNN, the key to the chain's success has been moving away from centralized buying, mostly driven by deals the chain got from publishers to push their books, and by broad, averaged algorithms, and instead has embraced letting local store managers curate the books that best resonate with their neighborhoods. Quite a "back to the future" strategy. Let's go back to the days when local retailers knew their customers and their markets, and tailored their assortments and their services accordingly.
Now this is not without a dose of technology. They describe how social media, especially that of local influencers and discussion groups, weighs heavily on the choices each store makes, rightfully so. Local stores are becoming gathering and quiet places once again where you can spend time, especially as we emerge from the COVID cocooning.
From the perspective of personalization, customer experience, and AI, there's several signals this sends that are worth noting:
Businesses exist to give customers value, so focus on how you are giving your customers value. When B&N was too focused on centralized coordination of support for promotional deals from publishers, they averaged out assortments, and tuned out the varying signals from their local markets. As we cite in "Personalized: Customer Experience in the Age of AI," personalization wears thin if it is just about manipulating someone into buying. You need to use the power of customer information to deliver new experiences that customers appreciate. What could be more relevant than selling the books that appeal to customers in your local markets? Most clothing and food retailers recognize the differences across local markets, so this is not new. It does stand out though when a company makes such a dramatic turn to do so and then reaps the benefits
"Know Me" is one of the five promises of personalization we cite in the book. Well, in this case, "knowing me" includes which books my circle is talking about online. In and of itself, AI would not know to include that if it were set loose to recommend an assortment. Real people, who understand other people, need to bring the strategic vision to focus on that as a valuable source of intelligence
People want connection. B&N recognized that the "Book Tok" community on social media went deeper than just sharing book reviews. So B&N worked with influencers to host local events, driving traffic to stores, and holding book launch parties, even costume parties. They are building their connection with their customers, foregoing the discount value that they had gotten before from the national book sellers. After all, who are they in business for?
Overall, this is a great example of NOT managing to averages. Personalization is the extreme of not using averages, but even moving towards such a local mix, and bringing in more ways to engage local customers, is a step towards empowering, knowing, reaching, showing, and delighting one's customers by proving that you understand them and want to serve them.
With B&N as an example, ask yourself "who are we in business for?" "How well do we really know them and are we using that knowledge to serve them, and their variations, as best as possible?' "Are we tapping into any kind of emotional resonance, especially by helping customers build connections that they value?" "What is an over-reliance on basic algorithms and averaged trend data leading us towards? Are we losing out on the granularity of growth that gets unlocked when you can deliver, cost-effectively, on the variations in customers' wants and needs?"
I welcome your feedback. It's time, especially during this holiday season, to get back to connecting with people.
2. Four Things To Share
ICYMI – my new book “Personalized: Customer Strategy in the Age of AI” with BCG's (BCG)’s Mark Abraham is the #4 business book on USA Today's bestseller list. Check it out for key insights on personalization! Buy Here!
As digital competitors continue to raise the bar for cx, traditional banks and credit unions are evolving their personalization capabilities. Interesting read on how banks can leverage AI and machine learning! Read Here.
Personalization is the key to raising customer engagement – research shows that 25% of consumers want tailored promotions or deals. Read Here.
Once you know something about a customer, reach them at the right time and through the right channel. Learn more about zero party data in my video!
3. Insights Video: How Executives Can Really Bring AI Into Their Businesses
4. Join The Personalize Academy For Free!
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You can reach out to me directly on the detail below, and I look forward to how we can learn together!
Thanks,
Dave
Contact Me:
I work with a range of companies, from large $5+bn enterprises who are trying to grasp the opportunities that AI offers, to marketing businesses who are bringing exciting innovative solutions to market.
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