Brand, Campaigns & Content

Addressing data challenges to deliver optimum personalization

Lizzie Powell
Lizzie Powell
Strategy Director
Manchester
19 Amsterdam

Personalization begins with data. The more insight that can be gathered to improve the experience, the better. Marketing tools and technologies that support data and insight gathering have rapidly advanced over the last few years, but are brands and retailers making the most of the opportunity? We launched a study to find out. 

After uncovering what consumers really thought of personalization in a 2019 consumer survey, we’ve run the study again to see if opinions have changed over the last two years. We’ve found clear discrepancies between the type of personalization features customers want to see, and the data they are willing to share. 

Consumer insights

When we asked if consumers would be willing to share more data with brands if it would improve personalization, 56% of participants said yes. This is a 4% increase from 2019, widening the gap between those who would and would not to 12 points, rather than four. Despite this, when asked about the data they would be willing to share, we found that consumers are less willing to share specific types of information with brands than they were in 2019, highlighting the gap in consumers’ understanding of what ‘data’ is or can be. 

56% of consumers would share more data to improve personalization

The majority of consumers are more comfortable with sharing information about their preferences than information that has the potential to make them identifiable. The top three data sources that consumers are most willing to share are favorite brands (59%),  hobbies and interests (58%), and lifestyle choices (46%). It’s important to note that even these higher-performing categories are, on average, 5% lower than they were two years ago, suggesting that consumers are not as comfortable sharing even these types of data as they were in 2019. 

Interestingly, when asked why they may be less comfortable, consumers are actually less concerned about the risks of sharing data than they were in 2019. The concerns have remained in the same order of significance with fear of spam marketing (60%), fear of data being sold (54%), and privacy worries (53%) taking the top three spots. However, there has been an average 7% decrease in these scores across the board. This could suggest that consumers’ digital maturity has accelerated during the period, and/or that they feel more in control of the data they share and, therefore, less concerned about the ‘risks’. 

There are clear discrepancies between consumers’ understanding of the link between data collection and personalization. But it also seems that those who are aware of the link prioritize data protection over personalization, with numerous comments saying that efforts are largely in favor of the brands as opposed to shoppers.

“There always seems to be a trade-off when it comes to supplying data to get a discount or offer. The retailers just use this data to predict your shopping habits or sell it on to other retailers.”

Building trust

Data is key to improving personalization, enabling brands to make decisions and implement actions based on insight rather than instinct. But it is also reliant on the customer voluntarily sharing certain information, and there is definitely controversy surrounding the topic. 

Although the majority of consumers say they are willing to share more data, by digging a little deeper we understand the boundaries consumers have set relating to that. We must not ignore that 44% of consumers said they would not share more information to improve personalization. It is clear that people are still wary and unsure about brands asking for and collecting their data. 

44% of consumers said they would not share more information to improve personalization

The perceived risks of sharing certain information with retailers and brands present a significant blocker to the future progression of personalization. Building trust between brands and consumers will be key to breaking down these barriers. If brands are to focus on securing this information, they will need to drastically improve communications about how they use data, and demonstrate the benefits of providing such information (i.e.through well-executed experiences), in order to build consumer trust and increase their willingness to share.

The opportunity to promote transparency and build trust may lie in giving consumers more control, switching to an opt-in approach to personalization, or creating preference centers where customers can manage their profile and levels of participation in personalization. This would enable consumers to take control of the types of personalization they want to receive, if at all.

Aggregation and activation

Aside from the trust challenge, companies can still take action by better activating the data they already have. E-commerce data pools are vast. Brands have access to huge volumes of consumer insights that are not reliant on the customer providing them, such as previous purchases, recently viewed items, abandoned baskets, and social media engagements. The list goes on. 

What more data-proficient companies have in common, is that they understand how to best aggregate and action this data. They are connecting their various sources of consumer information within customer data platforms to gain a single customer view that can drastically improve personalization and marketing relevancy. 

Abandoning data silos, CDPs collect and analyze customer information from a variety of different sources such as CRM, web forms, in-store systems, email, social media and many more. This creates a single customer view that includes demographics, behavioral and transactional insights, helping businesses better understand customers’ journeys, wants and needs. CDPs assist brands in better identifying customer segments and understanding behavior. When looking beyond data silos, unified customer data allows companies to prioritize and target users in different ways than before. When intelligence is applied to this strengthened customer view, companies can start to make decisions based on facts rather than instinct or opinion; driving sales by leveraging past trends to make future predictions. 

The need to invest in first-party data is also growing in significance following Google’s announcement to move away from third-party cookies by the end of 2023. First-party data is fast becoming the cornerstone of all online activity, so brands that invest in strengthening their first-party data sources and strategies now will be future-ready.

Taking action

It seems that when it comes to personalization, companies have fallen into the trap of repeating what others are doing out of fear of missing out. They recognize that to better personalize, they need better data, but little innovative thought goes into how to collect and activate that data. 

Download our report or get in touch with our experts to find out how Dept can help your business accelerate its personalization strategy and get ahead of your competitors. 

Questions?

Lizzie Powell

Strategy Director

Lizzie Powell

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