Consumers today expect personalization throughout their customer buying journey; it is no longer a ‘nice-to-have’ but a ‘must-have’. When asked to define personalization, McKinsey explained, "personalization is when organizations use data to tailor messages to specific users’ preferences", reaching "the right individual at the right moment with the right experiences" and that "consumers associated it with positive experiences that made them feel special."
Personalization has become a key focus for many companies. At CM.com, we champion personalization as a critical focus. Companies need to live up to customer expectations. Consumers should feel understood, valued, and not burdened with repetitive questions.
But, with so many options out there, what do consumers really want when it comes to personalization? What matters most? And do consumers genuinely feel understood by brands? Essentially, are retailers getting it right when it comes to personalization?
We asked shoppers directly to find out, surveying nearly 10,000 respondents across 9 countries: US, UK, India, South Africa, France, UAE, Belgium, China, and The Netherlands. Let's take a look at the results.
Retailers are letting consumers down. One in three (33%) of shoppers feel that companies fail to meet their personalization expectations, and 38% believe that brands do not understand their needs. Additionally, 37% of consumers expressed dissatisfaction with the way companies communicate with them, lacking a sense of understanding; promoting a type of coffee cup that does not match the coffee machine the consumer recently bought, for example.
Interestingly, there is a divide in opinions regarding the value of personalization, with 37% of consumers deeming it unnecessary and unwanted. However, the majority, 64%, disagree with this sentiment, indicating that personalization remains a crucial aspect of the customer experience. But what exactly are brands missing here?
We asked consumers what goes wrong with personalization, and the concept of relevance emerged as a key factor. A significant 52% of respondents reported receiving irrelevant messages and notifications from retailers, while 40% felt undervalued and treated as just one among many. They expressed frustration over the need to repeat themselves.
While customized messages and promotions are appreciated, making sure they're relevant and via the preferred channel is critical. Customers can quickly become irritated when bombarded with irrelevant content or forced onto unfavored communication platforms.
These failed personalization efforts are hindering and not helping businesses, while the successful examples are shaping consumers' expectations. Staying ahead of the competition is crucial because heightened expectations can quickly lead to frustration. What are the main frustrations?
But all is not lost. Some retailers are using personalization effectively. Shoppers highlighted that brands provide the right information at the right time (41%), enable them to achieve their desired outcomes faster (44%), assure a seamless shopping process (38%), and eliminate the need to repeat basic information (33%). Given the money invested, these numbers are far too low. But it does demonstrate that the potential is there to curate positive experiences for customers and drive value. If retailers get the basics right.
Repeating basic information should no longer be necessary for today's era. Retailers who need to catch up must leverage profile and behavioral data to minimize unnecessary and irrelevant interactions. This approach prevents customers from feeling "misunderstood" or "unappreciated."
Adopting a one-to-one approach, rather than a one-to-many approach, will take personalization to the next level. Use personal data to match the needs and wants of every individual with relevant products and offerings; promoting a new face crème that fits perfectly with a consumer’s skin type based on previously purchased skincare products, for example.
Understanding your audience is crucial for a personalization and data plays a vital role. However, consumers have reservations about certain data types. In our survey, respondents expressed discomfort with companies using their contact info (97%), unshared data (94%), bank details (94%), household info (89%), and relationship status (87%).
Expectations have shifted. Only 41% find it acceptable for previous purchase history to be used while previous conversations is just 17%. Similarly, only 33% are comfortable with companies accessing shopping behavior. These findings stress delivering value while maintaining trust.
The sentiment has shifted. Our previous research showed half of consumers expect customer service to have insights into their contact info, purchase history, and previous interactions. For retailers in general, this number is way lower.
It is important to note that different customers will be comfortable with different levels of personalization. Companies can use data to drive genuine insights that are responsive to consumer wishes and worries. Isn't that what truly effective personalization looks like?
Which company interactions would consumers like to be tailored to their needs? Nearly half (46%) of consumers express a preference for receiving personalized emails, 43% expect personalized customer service interactions, and 36% wish for a tailored website experience.
Furthermore, 30% of respondents desire the freedom to choose their preferred communication channel, whether it be one-to-one communication on WhatsApp, email, or live chat. Respondents expect varying degrees of personalization based on the communication channel. Most surprisingly, expectations are higher for email than face-to-face. These numbers show the massive discrepancy between what consumers want, and what businesses deliver. It's contradicting the common perception of inboxes being junk boxes, showing the need for better, more personalized e-mails.
These findings highlight the importance of personalizing customer communications across all channels, be it email, text messaging, WhatsApp, or social media. Personalization has become a fundamental expectation.
Quality of contact between consumers and companies is defined by multiple aspects. Consumers see trust as the most critical characteristic when purchasing products online, with 88% of respondents emphasizing its importance. Good personalization helps to build trust and perceived service, creating more convenience and speedier interactions. Emphasizing personalization in these areas enhances the overall customer experience.
These areas (in)directly affect personalization, and vice versa you need personalization to establish all these aspects:
Trust and personalization reinforce each other. Consumers need trust before sharing details, but they’ll trust a company sooner if they feel the retailer knows and understands them.
In service, we’ve seen consumers prefer a personal touch. Our previous research shows emotions play a big role, and 88% expect empathy. Good customer service requires personalization.
What’s more convenient than consumers directly seeing the products they’re looking for? Personalization heavily impacts a positive customer experience by reducing effort.
Personalization helps reassure customers that the entire shopping process will proceed smoothly. When consumers feel confident in their purchase, their likelihood of buying increases.
If consumers feel understood and get the right messages and offers, they'll find their way to the checkout button faster. In service, a personal approach also speeds up the process.
Over half of the respondents indicated that personalization is most expected when they have previously purchased a product multiple times (65%). When deciding to purchase a specific product, 59% expect it. Think about a tailored abandoned cart notification. 55% expect it after buying and starting to use a product; and 53% when making the first purchase with a brand.
While expectations are lower at the beginning of the customer journey, still almost half (45%) expect it after visiting a web shop once or twice, and 21% when not actively seeking a product. It is crucial to maintain relevance throughout the entire journey.
Consumers have come to expect personalization, and companies that successfully implement personalization strategies can reap substantial rewards. What's more, those who are poorly personalizing are damaging their rapport with customers. By prioritizing relevance, trust, efficiency, and convenience, companies can deliver personalized experiences that delight their customers. It is crucial to ensure that personalization is seamless and free from frustration.
Looking ahead, consumers will continue to take control of their personal information, deciding whom to share it with and where. Privacy concerns will diminish as rules and legislation evolve. Consumers will also have greater control over the timing, location, and content of the messages they receive, enhancing relevancy and preventing them from being overwhelmed by excessive communication. So, take the initiative and elevate your personalization game to stand out from the competition and win the hearts of your customers.
This research was conducted by CM.com in cooperation with the independent research agency CANDID. The online survey was carried out in May 2023, where 9964 respondents answered questions about personalization. They were surveyed about expectations and their experiences with companies in retail and eCommerce. All respondents were aged 18 years or older.
To represent different regions of the world, we surveyed 9964 respondents, approximately 1000 in each of the nine countries, including the United States of America, France, The United Kingdom, Belgium, The Netherlands, China, India, The United Arab Emirates and South Africa.