Study: Personalization drives spending — but retailers still miss the mark
Despite the fact that targeted engagement encourages consumers to spend more, many retailers still fail to personalize experiences.
This was according to “The 2017 State of Personalization Report,” from customer data platform Segment. The study is based on responses from 1,006 adults in the United States.
Consumer expectations are at an all-time high. To gain loyalty and capture revenue, brands must act quickly to engage these shoppers. Yet, 71% of customers expressed some level of frustration when their shopping experience is impersonal. Worse, only 22% of consumers find their retail shopping experience to be highly personalized.
The proliferation of new devices and the rapidly evolving technology landscape is increasing customers personalization expectations. However, these factors are also contributing to a “personalization gap,” one that brands are struggling to meet. After identifying themselves to a brand, for example, 54% of people expect to receive a personalized discount within 24 hours, and 32% expect a discount after just one hour.
Retailers that do engage with these shoppers are sure to benefit, as 63% said receiving a discount within an hour of interacting with a brand will drive loyalty. Meanwhile, 45% said a discount is the most compelling incentive to add another item to their cart.
“Shoppers expect brands to remember who they are, whether they’re on a digital channel or in-store. However, very few companies can actually deliver on these tailored experiences,” says Peter Reinhardt, CEO and co-founder at Segment. “This is a profound data and technology problem that needs to be solved. The brands who get this right will reap the rewards, as personalization and the customer experience will be the key differentiators for brands in the near future.”
For example, nearly half of shoppers surveyed (49%) have purchased a product they did not intend to buy after receiving a personalized recommendation from a brand. And 40% consumers said they have purchased something more expensive than planned because their experience was personalized.
Meanwhile, 23% have spent more than $50 on a single impulse purchase, with 7% spending more than $100. Notably, 85% of impulse buyers were happy with their purchase, and just 5% returned it.
The most expensive impulse buying still happens in a brick-and-mortar store (22%).
Despite the fact that consumers are willing to spend more money on unplanned purchases in brick-and-mortar stores than through any other channel, consumers (24%) also said store engagement needs the most improvement. Currently, 17% of consumers think that retailers are customizing the in-store experience.
Meanwhile, 41% of consumers said they expect representatives in a brand’s physical store to know what they have purchased online, yet only 19% have experienced this.
Regardless of the channel, retailers that provide tailored, personalized shopping experiences will gain happy, loyal customers. After a personalized experience:
• 44% of consumers will likely become repeat buyers.
• 39% will be likely to tell friends or family.
• 32% will be like to leave a positive review.
• 22% will be likely to post a positive comment on social media.
Click here for more results.
This was according to “The 2017 State of Personalization Report,” from customer data platform Segment. The study is based on responses from 1,006 adults in the United States.
Consumer expectations are at an all-time high. To gain loyalty and capture revenue, brands must act quickly to engage these shoppers. Yet, 71% of customers expressed some level of frustration when their shopping experience is impersonal. Worse, only 22% of consumers find their retail shopping experience to be highly personalized.
The proliferation of new devices and the rapidly evolving technology landscape is increasing customers personalization expectations. However, these factors are also contributing to a “personalization gap,” one that brands are struggling to meet. After identifying themselves to a brand, for example, 54% of people expect to receive a personalized discount within 24 hours, and 32% expect a discount after just one hour.
Retailers that do engage with these shoppers are sure to benefit, as 63% said receiving a discount within an hour of interacting with a brand will drive loyalty. Meanwhile, 45% said a discount is the most compelling incentive to add another item to their cart.
“Shoppers expect brands to remember who they are, whether they’re on a digital channel or in-store. However, very few companies can actually deliver on these tailored experiences,” says Peter Reinhardt, CEO and co-founder at Segment. “This is a profound data and technology problem that needs to be solved. The brands who get this right will reap the rewards, as personalization and the customer experience will be the key differentiators for brands in the near future.”
For example, nearly half of shoppers surveyed (49%) have purchased a product they did not intend to buy after receiving a personalized recommendation from a brand. And 40% consumers said they have purchased something more expensive than planned because their experience was personalized.
Meanwhile, 23% have spent more than $50 on a single impulse purchase, with 7% spending more than $100. Notably, 85% of impulse buyers were happy with their purchase, and just 5% returned it.
The most expensive impulse buying still happens in a brick-and-mortar store (22%).
Despite the fact that consumers are willing to spend more money on unplanned purchases in brick-and-mortar stores than through any other channel, consumers (24%) also said store engagement needs the most improvement. Currently, 17% of consumers think that retailers are customizing the in-store experience.
Meanwhile, 41% of consumers said they expect representatives in a brand’s physical store to know what they have purchased online, yet only 19% have experienced this.
Regardless of the channel, retailers that provide tailored, personalized shopping experiences will gain happy, loyal customers. After a personalized experience:
• 44% of consumers will likely become repeat buyers.
• 39% will be likely to tell friends or family.
• 32% will be like to leave a positive review.
• 22% will be likely to post a positive comment on social media.
Click here for more results.