Consumers want offline shopping experiences to be just as personalized as online, but new research from the customer data firm Segment shows that most major brands are failing to meet those expectations.
In surveying 1,006 U.S. adults, Segment found that the vast majority are disappointed with the lack of personalization in their online and in-store shopping experiences. Seventy-one percent expressed “some level of frustration” when their shopping experiences are impersonal, leading to what industry experts have dubbed a “personalization gap” in the shopping experience.
“The most striking thing about the survey is that the experience of personalization for consumers is so low across the board — whether online or in-person,” says Segment CEO Peter Reinhardt. “For all the talk over the past decade about a 360 view of the customer, it’s surprising—but not shocking—to see that so few brands deliver a personalized experience for everyone.”
When personalization is done right, it leads to an increase in spending. Nearly half (49%) of the consumers in Segment’s survey said they have bought things on impulse because of personalization. That number was even higher among millennials. Sixty-three percent of consumers in that group said they have made an impulsive purchase based on a personalized recommendation.
The concept of marketing personalization is a broad one, and it typically involves building customer experiences around collected data. E-commerce brands like Amazon have been leaders in the field, personalizing the recommendations and content that shoppers see based on past purchases and keyword searches. But a number of offline retailers have attempted to personalize the shopping experience, as well, by utilizing the personal data that consumers share at the point of sale (POS).
Segment’s survey found that brands are struggling to meet the high expectations that consumers have set. For example, 54% of consumers say they expect to receive personalized discounts within 24 hours of identifying themselves to a brand, and only 22% of consumers say they already find their retail shopping experience to be highly personalized.
“Fifteen years ago, businesses really only had two avenues of interacting with their customers: in a physical store, or over the phone. As a customer, I would interact with the same salesperson or manager each and every time, and they would keep track of my preferences and ensure I had a personalized experience,” Reinhardt says. “Today is a whole different story. Customers are no longer just interacting with brands in stores — they’re interacting on mobile apps, on their website, through email, ads, live chats, push notifications, and customer service lines. The truth is that delivering the kind of personalization that consumers are expecting today is a massive data and technology challenge.”
Reinhardt says that mobile has become a key part of the omni-channel experience. Since so many people are using smartphones and tablets, mobile has become a key channel for personalized marketing and it’s already influencing more and more of consumers’ buying decisions. However, he also cautions that the ultimate goal for brands is to give consumers personalized experiences wherever they are, so they should be delivering consistent experiences across all devices and channels, including websites, emails, and even in-store.
“Consumer expectations are much lower when it comes to personalization when in-person; however, our research shows that the payoff to address this issue is huge: brick-and-mortar is the channel most likely to drive last-minute purchases worth more than $50,” he says. “Those who follow the retail industry closely know that personalization in-store is increasingly important, and there will be a race to see who can create the most amazing in-store experiences for consumers.”
Looking forward, Reinhardt says he hopes brand adoption and implementation of personalization tactics will grow to become a differentiator among retailers both online and offline.
“What will set businesses ahead now is what we’ve known all along: providing customers a great experience,” he says. “In order to deliver on these experiences, companies need to not just have their data in order, but they also must be able to synthesize and act on it instantly to make sure every customer has a personalized, relevant experience.”
Stephanie Miles is a senior editor at Street Fight.