Pushing the Personalization Envelope
Today’s consumers expect personalized communications that are tailored to their individual preferences and delivered seamlessly across every channel. But while retailers and brands have a wealth of data to derive insights at their fingertips, harnessing the power of personalization to target individual shoppers with the right message, at the right time, and in the right channel is proving challenging for most. Others, meanwhile, are overlooking attractive consumer segments that are eager to be engaged. Those retailers that have developed personalized marketing strategies will know that there are successes and failures along the way to finding success, but what is it that really matters to consumers?
At Periscope By McKinsey, we look at that question regularly, and in March this year conducted a survey among consumers in the U.S., U.K., France, and Germany to see how attitudes towards personalization are changing not only domestically but also in important European markets and for many U.S. retailers and brands. The findings highlighted several key areas that should help retailers answer the question for themselves and guide the development of their personalized marketing strategy, particularly given the research found that more than one-third (37 percent) of messages received by U.S. consumers had stimulated them to act.
Deals Represent a Top Motivating Factor for Consumers
Asked what motivates them most to act on a personalized communication, taking advantage of an offer that saves them money topped the list for consumers in the U.S. (61 percent), U.K. (59 percent), France (54 percent) and Germany (49 percent). Messages about products they wanted to buy proved the next motivating factor for consumers in the U.S. (47 percent) and U.K. (45 percent), followed by communications about products within their budget (41 percent U.S. and U.K.).
The No. 2 motivating factor for consumers in Germany (48 percent) and France (47 percent) proved to be messages about products that match their personal tastes. Taking the third spot for 45 percent of consumers in Germany were communications on products they wanted to buy, while 42 percent of shoppers in France were motivated by notifications about products within their budget.
When Personalization Gets Creepy
While shoppers recognize that brands and retailers are using their data to target and personalize messages, they’re definitely unsettled when they feel their digital or personal privacy is being invaded. Unsolicited communications from companies they don’t know was a top issue for U.S. consumers (41 percent). However, it was the unsettling eeriness of location tracking messages that caused the most anxiety for German (40 percent) and U.K. (40 percent) shoppers, and was listed as the second greatest cause for apprehension among French (41 percent) and U.S. (40 percent) consumers.
Aim for the Next Level of Personalization
What the research uncovered and customers we speak with every day are realizing is that retailers and brands must take their personalization efforts to the next level. Personalizing shopping experiences is a significant opportunity to increase consumer engagement. To be successful and reap the rewards, businesses must employ advanced analytics and scalable and sustainable solutions that help them better understand their customers. With that data, they can then create the right mix of content, channel and timing to drive a change in the behavior of an individual customer. Not doing anything, or getting it wrong, will leave you behind the game.
You can read more about the survey’s findings by downloading the subsequent report, The Art of Personalization— Keeping it Relevant, Timely and Contextual.
Lars Fiedler is partner and senior solution leader of Marketing Solutions at Periscope® By McKinsey, a marketing and sales solutions platform for businesses.