Pitch-Perfect Personalization

The Most Popular Features And Who Likes Them

Considering all the industry resources now invested into personalization technology and customer data platforms, particularly as a retention tactic (see CommerceNext’s Annual Benchmark Report), it’s good to know consumers really appreciate it. Over half of consumers notice brands’ efforts to personalize more than just a first name on an email, and an even larger majority find certain personalization tactics, particularly recommendations, crucial to their shopping experiences.

In the first half of our consumer survey, we sought to understand two things:

1. What aspects of personalization consumers find most important to their shopping experiences.
2. Which segments of consumers most strongly recognize and respond to any particular personalized features and communications.

Let’s dig into those results.

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Customers simply love a good rec and a good deal.

According to Chart 1 below, at least 66% of consumers gravitate towards stores that actually “know them.” A big part of this appears to mean ensuring consumers are able to find what they like through personalized recommendations, as 60% of consumers feel relevant recommendations are important.

The general idea of stores “knowing me” excites consumers the most, followed by tailored site experiences and getting customized communications. Perhaps the more specific examples of personalization bring to mind the concept of data sharing, which, as we’ll see in Part II, is a concern for many consumers.

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Who exactly should retailers put more resources into getting to know? According to this survey, it’s a pretty broad based desire. Younger consumers (including Gen Z) skew slightly more interested in recommendations at 73% (see Chart 3), but a majority of all age groups say they are more likely to buy from retailers that know them (see Chart 2).

Most income groups prefer that retailers know them, with households bringing in $75,000 - 100,000 being the most likely to strongly or somewhat agree (75%) (see Chart 4). Those on the lower end of the income spectrum making less than $30,000 skew slightly higher in preferring to shop with stores making stellar recommendations (see Chart 5). Perhaps those who are more economically stretched gravitate toward brands that can save them time and serve them products they can quickly feel confident about purchasing.

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Our industry invests a lot into getting to know its customers — product quizzes, advanced customer data platforms, smart emails and texts, customized offers, dynamic site experiences, and more. Is anyone actually noticing all these great features?

Yes! Just over half of consumers said that online stores are doing a better job of knowing their preferences and tastes (56% strongly or somewhat agree). The same percent noticed online communications becoming more relevant.

Retailers’ efforts are certainly breaking through with a majority. Consumers of all ages and incomes find many aspects of personalization critical to their shopping journey and in making purchasing decisions.

Just one catch. Clickstream data is useful, but the best personalization also takes advantage of first- and zero-party data. While retailers and brands are collecting a regular, healthy stream of data now, the hose could be turned off if consumers aren’t confident the exchange is worth it, or if their data is mishandled. Consumers’ trust in brand integrity around data — that it will be used securely and in ways that matter to them — is, of course, tied to their willingness to participate in this personalization data exchange.

In the following section, we investigated which consumers feel the most cautious around data privacy and security, and how that plays out in the world of personalization.

Walking The Digital Line Between Personalizing And Promoting Privacy

As much as consumers are interested in receiving compelling, relevant personalized experiences, they’re more aware than ever of the concept of data privacy. While our community of retailers and brands strives to deliver more advanced recommendations and hyper-personalized communications, they should also remain vigilant about how transparent they are about their data uses. Because, as these survey respondents made clear, consumers care.

Two-thirds of consumers are only interested in having their personal interactions saved if they know their data is being stored securely (see Chart 7). A supermajority of consumers report concern over how retailers are using their personal information and data (70% strongly agree, 87% strongly or somewhat agree).

Furthermore, when layering data privacy concern level over respondents’ answers to those data sharing questions, we see perceptions of data security remain a significant barrier to consumer willingness to share (see Charts 8 and 9). It’s clear that the retailers and brands who will receive the biggest payoff from personalization investments will be those who proactively and deftly offer control and security to their customers, earning both their trust and their business long-term.

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A 2020 study of the most trustworthy industries revealed retail isn’t at the top — only 18% of consumers polled believe it to be the most trusted. It’s clear we have some work to do as an industry in building up credibility, but with some demographics more than others. Older and higher income consumers are significantly more concerned about how retailers use their personal information and data.

Concern By Age

Almost all consumers over 60 are worried about how retailers are using their personal information and data (93% strongly or somewhat agree, per Chart 11). Although younger consumers are less worried about data privacy, a strong majority of even 18-29 year olds only want to share data if they know it is being stored securely (per Chart 10).

Although the numbers are still high, it tracks that the younger groups — the social media generations — are more acclimated to sharing their information. Older groups — the direct mail generation — have demonstrated they are less likely to understand how data sharing works in the commerce world given their increased skepticism.

Concern By Income

All income groups express some degree of worry about how retailers are using their personal information and data (per Chart 13). Wealthier households making over $150,000 in income are the most likely to say they want to know their data is stored securely (76% strongly or somewhat agree, per Chart 12), and lower income respondents making less than $30,000 are the least likely.

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The good news: simply talking about privacy doesn’t change public opinion on personalization.

Layering our respondents’ other answers with concern level, we’re bolstered to reveal some optimistic outlooks for personalization:

• Respondents’ concern over retailers’ use of their personal data does not appear to influence their desire for personalization (per Chart 14).
• Chart 15 shows even security-conscious shoppers are just as interested to receive product recommendations.
• Those with lower levels of concern over their personal information are more likely to have noticed increased personalization on websites over the last few years, per Chart 16.

Knowing concern over data privacy doesn’t necessarily impact consumers’ appetite for personalization should comfort retailers. At the same time, our industry needs to thoroughly examine the relevancy of their personalization programs, their goals, and their level of data transparency to ensure they are hitting the right tone when it comes to talking about data while delivering the types of personalization most important to consumers.

TikTok, Google, Meta, Amazon — there are plenty of utilities and experience-driven apps that have consumers throwing data privacy caution to the wind because the products and experiences are that valuable to them. It’s our job as retailers to hit that same sweet spot, doing what’s needed to earn/keep consumer trust while proving the relationship is worth it.

By now, most retailers and brands are doing everything they can to ensure data remains safe internally — now what about the external optics? You may be doing everything you can to secure against breaches and comply with current regulations, but consumers need to both know it because you’ve told them, and see it through the shopping experience itself.

To help our community mitigate shoppers’ privacy concerns and develop deeper trust, we’ve compiled a few best practices around zero and first party data collection and utilization. Aside from the now required cookie preferences pop-up, retailers and brands can increase trust, loyalty, and conversions by:

We already know personalization is one of the biggest keys to growth today — we just need customers to stay focused on its benefits without getting spooked by tales of mishandled data. If consumers receive assurance their data will be protected and not sold, and are then provided with an enhanced experience that utilizes that data, their trust and engagement will increase exponentially. We can bring retail to the top of that McKinsey list, becoming the most trustworthy industry of the data privacy era and enjoying even bigger payoffs when we do.