As retailers gain access to more consumer data, they are able to personalize the shopping experience for each customer and stand out in a crowded marketplace. A new survey by data management company Stibo Systems finds that successful personalization does resonate with consumers. However, retailers still have areas to improve on for 2020 if they want to see that success.
Two thirds of surveyed consumers reported that they associated personalization with a more positive retailer relationship. Among the top picks for personalization efforts were coupons tailored to items purchased (54%); interest-based advertising (50%); and special offers connected to items scanned in store (42%). Retailers also ranked these features in their top five, suggesting an alignment between the two groups.
However, 33% of retailers also reported that they routinely struggled with these kinds of initiatives. Real-time user engagement was the only data-driven initiative that was ranked as a higher concern (41%).
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“Consumer demand for personalization is outpacing many retailers’ capabilities to deliver such experiences, and leveraging customer data seems to be one of the most significant stumbling blocks,” said Prashant Bhatia, Chief Product and Marketing Officer at Stibo Systems. “Our survey found one in four retailers struggle with achieving a single view of all customer/product data.”
Collecting sufficient data is one factor in providing a successful personalization experience. Stibo Systems found that transaction activity, gender/age information and website activity are the most important data points for retailers. But concerns over data security and privacy are high; 30% of respondents said that they had no confidence at all that retailers could protect their data and only 11% said they had total confidence.
Despite these concerns, consumers are still open to sharing their data – if in exchange for an improved customer experience. Loyalty programs were the most popular perk chosen by consumers (49%), with weekly coupons coming in second (23%). If retailers can demonstrate that shoppers will be rewarded for sharing their data, the study suggests that they may be able to win over customers and provide a superior experience.
Empowering the customer to decide is the most important part: 66% of respondents said they wanted retailers to provide the choice of opting-out of data collection. Until retailers can prove their reliability, optional data-sharing can help make customers feel more comfortable while still contributing to personalization efforts.
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