Personalisation; are retailers getting it right

Personalisation is no luxury, it's a necessity

Consumers today expect personalisation during the retail buying journey; it is no longer a ‘nice-to-have’ but a ‘must-have’. When asked to define personalisation, McKinsey explained, “personalisation is when organisations 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." This expectation has driven personalisation to become a key focus for many companies.

At CM.com, we champion personalisation as a critical focus. We believe companies should exceed consumers’ expectations. But first, they’ll have to live up to them. Customers should feel understood, valued, and not burdened with repetitive questions when the retailer should know the answer.

But, with so many options, what do consumers really want regarding personalisation? What matters most? And do consumers genuinely feel understood by brands, and does this translate into customer loyalty? Essentially, are retailers getting it right when it comes to personalisation?

To find out, we asked consumers, surveying 1000 respondents across the United Kingdom. Let's take a look at the results.

Expectations lead to frustration

These subminimal personalisation efforts mean nearly half (42%) of shoppers feel that companies fail to meet their personalisation expectations, and 45% believe that brands do not understand their needs. Additionally, 39% of consumers expressed dissatisfaction with how companies communicate with them, lacking a sense of understanding.

Interestingly, there is a divide in opinions regarding the value of personalisation, with 45% of consumers deeming it unnecessary and unwanted. However, the majority, 55%, disagree with this sentiment, indicating that personalisation remains a crucial aspect of the customer experience.

While customised 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 unfavoured communication platforms and, consequently, move to another brand and competitor. Staying ahead of the competition is crucial because heightened expectations can quickly lead to frustration if needs aren’t met.

But all is not lost. Some UK retailers are using personalisation effectively. Shoppers highlighted that brands provide the right information at the right time (44%), enable them to achieve their desired outcomes faster (39%), assure a seamless shopping process (38%), and eliminate the need to repeat basic information (33%). Whilst these percentages are low, it demonstrates the potential to curate positive experiences for customers and drive value. If you 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 behavioural data to minimise 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 personalisation 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 previously purchased skincare products, for example.

Interestingly, while consumers previously expected companies to possess knowledge about their contact history, purchase history, and preferences, the sentiment has shifted. Only 37% consider it acceptable for their purchase history to be used, and even fewer (20%) desire companies to have insight into their previous interactions. Similarly, only 31% are comfortable with companies accessing their shopping behaviour. Even more importantly, to ensure you deliver value while retaining trust.

It is important to note that different customers will be comfortable with different levels of personalisation. And being responsive to an individual customer and their worries and wishes is what truly effective personalisation looks like.

How can retailers up their personalisation game?

Retailers take note: customers expect personalisation no matter the channel

Which company interactions would consumers like to be tailored to their needs? Nearly half (49%) of consumers preferred receiving personalised emails, 35% expected personalised customer service interactions and 28% wished for a tailored website experience.

Furthermore, 28% 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 expected varying degrees of personalisation based on the communication channel. Most surprisingly, 86% anticipated personalisation via email, contradicting the common perception that inboxes are places for junk communication.

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, service, and speed: how personalisation impacts every aspect of customer contact

Trust was identified as the most critical characteristic when purchasing products online, with 88% 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:

While personalisation expectations are lower at the beginning of the customer journey, with 36% expecting it after visiting a company's website once or twice and only 16% 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: the game-changer in today's retail market

Personalisation is a game-changer in today's market. Consumers have come to expect it, and companies that successfully implement personalisation strategies can reap substantial rewards. What's more, those who are poorly personalising are damaging their rapport with customers. By prioritising relevance, trust, efficiency, and convenience, companies can deliver personalised experiences that delight their customers. It is crucial to ensure that personalisation 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 personalisation game to stand out from the competition and win the hearts of your customers.

Methodology

CM.com conducted this research in cooperation with the independent research agency CANDID. The online survey was conducted in May 2023, where 9964 respondents across the globe answered questions about personalisation and service interactions with businesses. From those 9964 respondents, 1000 UK respondents were surveyed. All respondents were aged 18 years or older.