Consumers Prefer Personalization; Businesses Can’t Deliver
Offering personalized experiences to customers will translate to higher sales, but businesses continue to have a hard time with personalization, according to research from Accenture. Consumers, the research found, still encounter irrelevant recommendations and an overwhelming number of product options when visiting retailers’ websites.
Consumers have a positive attitude toward personalized product offerings and services, according to an Accenture survey of more than 1,500 consumers across the United States and United Kingdom. In fact, 56 percent of consumers said they would be more likely to shop in-store and online at retailers that recognize them by name; 58 percent said they would be more likely to make purchases when retailers recommend products to them based on their past purchases or preferences; and 65 percent said they would be more likely to shop in-store and online at retailers that keep records of their purchase history. Moreover, 75 percent said that they would be more likely to purchase from retailers that provide any of these three services.
Yet despite consumer enthusiasm for personalization, many companies are struggling to deliver the experiences consumers want. A full 39 percent of consumers said they have left a business’s website and made a purchase elsewhere because they were overwhelmed by the number of options presented.
The research also found that businesses are struggling to make their recommendations relevant, with just 50 percent of consumers reporting that they have ever purchased an item recommended to them.
Many companies are still in the experimental stages of personalization, which would explain their struggles. Accenture posits a five-stage personalization maturity model, with most companies falling into the first two stages—minimal personalization and selective personalization. Companies with minimal personalization offer digital experiences and campaigns based solely on expert judgment and simplistic business rules, while selective personalization encompasses digital experiences and campaigns based on data-driven testing, recommendations, and audience targeting.
The three more advanced stages are managed personalization, omnichannel personalization, and enterprise digital agility. Managed personalization involves adopting an operating model for managing processes, governance, and platform instrumentation that supports digital experiences and campaigns. Omnichannel personalization involves centralized decision management to craft contextualized, personalized, and seamless customer experiences across all channels. Finally, enterprise digital agility occurs when companies use all channels to manage key performance indicators, such as margins, revenue, and excess inventory.
“As we move to more digital experiences...companies can learn much faster than they’ve ever learned before,” says Jeriad Zoghby, global personalization lead at Accenture Interactive. Zoghby adds that the digital world makes it easier for businesses to test different layouts, creative, and other materials and to run data-driven experimentation.
Video streaming services such as Netflix and Hulu are leading the way in personalization, according to Accenture’s study, which found that 66 percent of consumers think these services use their data effectively to recommend products and videos they might like. Moreover, the success of these platforms exemplifies the importance of using customer data to develop tailored experiences. With 70 percent of consumers reporting that they are generally comfortable with retailers, news sites, streaming services, and service providers collecting their personal data—as long as they maintain transparency about how they use it—companies will have a wealth of information upon which to draw for their personalization strategies.
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