Consumers today have elevated their expectations when it comes to personalisation in the retail buying journey. It has evolved from being a mere "nice-to-have" feature to a "must-have" requirement. According to McKinsey, personalisation refers to the use of data by organisations to tailor messages that align with specific user preferences. It involves reaching the right individuals at the right moment, delivering experiences that make them feel special.
This growing expectation has made personalisation a key focus for many companies, and at CM.com, we champion personalisation as a critical focus. We firmly believe that companies should not only meet but surpass consumers' expectations. Customers should feel genuinely understood, valued, and relieved from repetitive questions, as retailers should already possess the necessary knowledge.
However, amidst a sea of options, what exactly do consumers desire in terms of personalisation? What aspects truly matter to them? Do consumers genuinely believe that brands understand them, and does this understanding translate into customer loyalty? In essence, are retailers successfully delivering on the personalisation front?
To answer these questions, we conducted a survey among 1000 respondents in South Africa, directly asking consumers about their preferences.
Brands' personalisation efforts are falling short and negatively impacting their businesses. A staggering 70% of respondents still receive irrelevant messages and notifications from retailers, such as promoting incompatible products. Furthermore, 36% felt undervalued and treated as generic customers, while 55% expressed frustration at having to repeat basic information already known by the brand. These findings highlight the need for brands to improve their personalisation strategies and deliver more meaningful and seamless customer experiences.
These limited personalisation efforts have resulted in 33% of shoppers feeling that companies fall short of their personalisation expectations, while 32% believe that brands do not truly understand their needs. Furthermore, 25% of consumers expressed dissatisfaction with how companies communicate with them, lacking a sense of understanding.
Interestingly, when assessing the value of personalisation, only 21% of consumers consider it unnecessary and unwanted. The majority, comprising 61% of respondents, disagree with this notion, highlighting the continued importance of personalisation in the overall customer experience.
While customised messages and promotions are welcomed, it is crucial to ensure their relevance and delivery through preferred channels. Customers can quickly become frustrated when bombarded with irrelevant content or pushed towards communication platforms they do not prefer. In fact, 42% of respondents reported receiving communication through channels they did not prefer. Such frustrations may lead customers to switch to other brands or competitors. Therefore, maintaining a competitive edge is vital, as failing to meet customer expectations can quickly result in disappointment
However, there is hope on the horizon. Some South African retailers have successfully implemented personalisation strategies. According to shoppers, these brands excel at helping them achieve their desired outcomes efficiently (57%) and ensuring a seamless shopping experience (52%). These statistics highlight the potential to create positive customer experiences and drive value when the fundamentals are executed effectively.
In today's digital age, there should be no need to repeat basic information. Retailers aiming to optimise personalisation must leverage profile and behavioural data to minimise unnecessary and irrelevant interactions. By adopting a one-to-one approach instead of a one-to-many approach, retailers can take personalisation to new heights. By using personal data, brands can tailor their offerings to match the unique needs and preferences of each individual. For instance, promoting a new face cream that complements a consumer's previously purchased skincare products.
By embracing these strategies, retailers can eliminate the feeling of being "misunderstood" or "unappreciated" among their customers. It's time to harness the power of personal data to create meaningful connections and deliver truly personalised experiences.
Understanding your audience is crucial for a personalised approach; data and, more importantly, the insights garnered play a vital role. Companies can use data to drive genuine insights that are responsive to consumer wishes and worries.
Our research revealed consumers have reservations about certain data types. Shoppers expressed discomfort with companies using unshared data (97%), contact information (88%), household information (83%), and relationship status (80%).
Interestingly, consumer expectations regarding the extent of company knowledge about their contact history, purchase history, and preferences have evolved. Surprisingly, only 52% of respondents now consider it acceptable for their purchase history to be utilised. Similarly, just 45% of consumers are comfortable with companies accessing their shopping behaviour.
It is crucial to recognise that each customer may have different comfort levels when it comes to personalisation. The key to effective personalisation lies in being responsive to the individual customer, understanding their concerns and desires. By tailoring experiences to meet each customer's unique needs, businesses can achieve truly impactful personalisation that resonates with their audience.
Which company interactions do consumers wish to be personalised according to their needs? A substantial 71% of consumers prefer receiving personalised newsletter emails, while 64% expect personalised customer service interactions. Furthermore, 49% of respondents desire the freedom to choose their preferred communication channel, whether it's engaging in one-to-one conversations on WhatsApp, email, or live chat. It's worth noting that respondents anticipate different levels of personalisation depending on the communication channel. What's particularly surprising is that 95% of respondents expect personalisation via email, challenging the common perception that inboxes are flooded with irrelevant messages.
These findings highlight the importance of personalising customer communications across all channels, be it email, WhatsApp, or social media. Personalisation has become a fundamental expectation.
Trust was identified as the most critical characteristic when purchasing products online, with 97% of respondents emphasising its importance. At CM.com, we believe trust and personalisation are strongly correlated and reinforce each other. Good personalisation helps to build trust, and perceived service, creating more convenience and speedier interactions. Emphasising personalisation in these areas enhances the overall customer experience.
These areas are (in)directly affected by personalisation, and vice versa you need personalisation to establish all these aspects:
Consumers need to trust a company before sharing personal details, but they’ll trust them sooner if they feel like the retailer knows them and understands them, for example.
Consumers prefer personal support over chatbots for more complex issues. Previous research shows 71% of consumers expect an immediate response.
Personalisation helps reassure customers that the entire shopping process will proceed smoothly. When consumers feel confident in their purchase, their likelihood of buying increases.
What’s more accessible than consumers receiving personalised suggestions for new and relevant products? Personalisation heavily impacts a positive customer experience by creating convenience.
Time is of the essence, as 86% of respondents agree that customer service should respond quickly, and chatbots are welcomed that comprehends context and provides relevant responses.
Respondents highlighted the significant role of personalisation at different stages of the journey. Specifically, when customers have made repeat purchases of a product (73%), they expect a high level of personalisation. Additionally, our findings revealed that 71% of respondents anticipate personalisation when they are in the process of deciding to purchase but have not yet completed the payment. In such cases, abandoned cart notifications prove valuable. Furthermore, 69% of respondents expressed the expectation of personalisation when making their first purchase, which could include discounts for future purchases.
While personalisation expectations are lower at the beginning of the customer journey, with 51% expecting it after visiting a company's website once or twice and only 18% when not actively seeking a product, it is crucial to maintain relevance throughout the entire journey. Personalisation should be employed consistently, anywhere and anytime.
Personalisation is no longer just a nice-to-have. Consumers have elevated their expectations, and companies that effectively implement personalisation strategies can unlock significant rewards. On the flip side, those who fall short in personalisation efforts risk damaging their relationship with customers. By prioritising relevance, trust, efficiency, and convenience, companies can deliver personalised experiences that truly delight their customers. It is crucial to ensure a seamless and frustration-free personalisation journey.
Looking ahead, consumers will continue to assert control over their personal information, carefully choosing whom to share it with and where. As rules and legislation evolve, privacy concerns will diminish. Additionally, consumers will have greater say in the timing, location, and content of the messages they receive, enhancing relevancy and preventing overwhelming communication. Therefore, it's time to seize the opportunity and elevate your personalisation game, standing out from the competition and winning the hearts of your customers.
CM.com conducted this research in cooperation with the independent research agency CANDID. The online survey was conducted in May 2023, where 1000 South African respondents answered questions about their service interactions with businesses. All respondents were aged 18 years or older.