Consumers Are Wary About Personalization in Retail, but Open to It

LONDON—Shoppers in the United Kingdom may be increasingly comfortable with personalization in retail, but they still have reservations, a new study reveals. Personalization is playing a larger role in ecommerce, mainly due to the growing amount of data available to retailers to use to create more specific experiences tailored to consumers. In the study, Floris Oranje, the managing director of digital marketing at Dept, an independent international agency, takes a look at the effect this growth has had on consumers and how they've adjusted to it so far. The study of 1,000 consumers—half male, half female and of a variety of ages—asked about their experiences at a number of retailers, including Amazon and Asos, focusing on personalization, how they respond to different types of personalization and what's resonating. One major conclusion is that consumers are more receptive than ever to personalization, but that there's still a lot of work that needs to be done to make them fully comfortable with it, particularly because of concerns around companies collecting consumer data. "People are still wary and unsure about brands asking for and collecting their data," according to the study. "As indicated by the discrepancy between the type of personalization features customers want to see, versus what data they want to share, consumers aren’t jumping to hand over information about themselves and are suspicious of any online entity asking for it." One of the respondents in the study put their concerns about data collection bluntly: "All data beyond basic transaction info should be deleted at the earliest opportunity, or better yet, not collected in the first place," they wrote. "Any data that is retained should not be used to snoop on me or try to guess who I am or what I want. Is that really too much to ask?" [kickout id="1"] However, what really puts people off personalization is when they're shown something that isn't relevant to them—74% of those surveyed listed "irrelevancy" as their top dislike about personalization. The study also found that while consumers are still wary of personalization, there are some tactics that resonate more than others and generally, consumers appreciate the aspects of personalization that make their shopping easier such as more streamlined experience, recommendations that pertain to exactly what they're looking for and no extras that will increase the dollar amounts in their carts. Hard pushes for more sales or trying to make decisions for consumers is exactly the sort of behavior that turns consumers off of personalization. "Consumers find chatbots, spam and emails suggesting purchases unhelpful and often annoying," according to the study. "Also, the stats suggest that consumers already suspect that personalization exists just to get them to spend more money." In particular, recommendations and offers that are based on location, interests and previous purchases work for consumers. However, even these bright spots come with another side. Consumers remain wary of sharing location data but know it can produce some of the best sort of personalization. The study concludes that "there is potential to further educate the public about how their location data is used, and how it can improve their shopping experience." Some groups have more appreciation for personalization in shopping than others. For example, younger consumers are more likely to respond positively to personalization than older consumers. Among those surveyed in the 18-24 age group, 83% said personalization makes their ecommerce experience "more efficient and streamlined," while only 54% of of 55- to 65-year-olds feel the same way. Many people may care more about personalization than they realize, the study shows. What marketers can do to translate this to consumers is be open with them about when they're collecting data to personalize their experience. "Brands need to find ways of making it clear to customers that their privacy is guaranteed, and give them options at every stage to opt-in or out of data collection/cookies," the study reads. "Outside of marketing and ecommerce, data protection and internet security is a broader issue; more education and information is needed to be distributed among customers, but it’s something that marketers need to keep in mind nonetheless."