The Retail Personalization Gap—and How to Know if You’re In It

Retail marketers know all too well that personalization is mandatory for winning and retaining customers and moving away from price differentiation. But what many don’t realize is that their efforts aren’t always having the desired effect with consumers.

Adobe recently conducted two surveys on personalization—one querying retailers and the other consumers. The research identified a broad gap between how retailers rate themselves on the personalization scale and what consumers are experiencing.

In a survey of more than 200 retailers in North America and the European Union, most said they are extremely or very satisfied with their current personalization programs. But contrast this to how consumers are reacting to personalization.

Of hundreds of consumers surveyed, 71 percent reported that they like receiving personalized offers, but 20 percent said these offers are not well done, and another 20 percent felt that today’s personalization efforts are too intrusive. Nearly 30 percent of respondents said they don’t think ads should be personalized in any way. Resistance jumps with age, with 38 percent of those 50 to 64 and 62 percent of those 65 and older against any kind of personalization.

A primary reason for personalization is to garner new customers and boost loyalty. Ironically, retailers cite interactions with customers as their number one challenge to achieving personalization goals. Clearly there are disconnects.

We delved further into what might be causing the gap between how retailers and consumers perceive personalization and identified several likely contributing factors:

• Retailers have no standard yardstick for what constitutes personalization. It might involve website optimization, segmentation, email marketing, merchandising, promoted messages, or even use of iBeacons in stores. With such a broad definition, it’s difficult to compare personalization initiatives and satisfaction ratings across the industry.
• Consumers only welcome personalization when it’s done deftly and in ways that are meaningful. They demand privacy and non-intrusive communications. And they seek brands that are authentic and act on their promises. Consumers expect genuine value and transparent, helpful communications.
• Retailers aren’t engaging customers across every touch point. Most are personalizing their website experiences and customer loyalty programs but not their in-store and mobile customer experiences. Although mobile is the fastest growing shopping channel, it is the least personalized of all, resulting in missed opportunities.

Regardless of the personalization strategies, retail marketers can no longer afford to go at it blindly. Data management, content management, optimization, and campaign orchestration technologies are key to helping retailers personalize and optimize every retail interaction. Adobe Marketing Cloud solutions, used in concert, enable retailers to take a data-driven approach to personalization that empowers them to increase both revenues and profits—and move away from price-cutting-only strategies.

It’s time for retailers to rethink their initiatives and tune in to consumer reactions. Otherwise, they stand to miss a tremendous chance to generate customer loyalty through truly personalized, immersive shopping experiences spanning all channels. If retailers are not currently embracing consumer views on personalization and mobile use, then they need to adopt new strategies—and drive them based on data and insights.

For more information on how to maximize the value of personalization in retail, download the Adobe paper, “Closing the Gap: Why It’s Time for Retailers to Rethink Personalization.”