Poor personalization cost businesses $756B last year
About 44% of consumers are frustrated when retailers fail to deliver personalized shopping experiences, but 49% are concerned about their personal data privacy as they subscribe to intelligent services designed to anticipate their needs, according to new research from Accenture.
Accenture's research also found that poor personalization efforts and lack of trust cost U.S. organizations $756 billion last year, as 41% of consumers switched companies.
The 13th annual Accenture Strategy Global Consumer Pulse Research study surveyed more than 25,000 consumers from around the world — 2,000 of them in the U.S. from June to July 2017.
Retailers are among the companies that are trying to evolve into "living businesses," meaning they proactively acting on customers' needs and customize experiences for them.
Businesses leading the charge are using technologies like AI, machine learning and digital assistants to anticipate consumer needs, Robert Wollan, senior managing director and Advanced Customer Strategy global lead at Accenture Strategy, said in a statement. "Those that succeed will hit a 'sweet spot' whereby U.S. customers will be willing to share more personal insights into their world in return for greater value and the confidence that their data is protected," he said.
This study reflects the personalization conundrum we have known about for a while: Shoppers are interested in all the benefits of having personalized experiences, (even getting frustrated when they don't get it) but don’t want to give up personal data and details to get access to that kind of treatment.
Perhaps years worth of retailer data breaches have something to do with customers' hesitation. Although many of them continue to shop at retailers that have experienced such breaches, they may pause before going the extra mile and providing extensive personal data to those companies.
The study noted that digital trust remains a critical barrier to enabling hyper-relevant experiences: 92% of U.S. respondents said that it is extremely important that companies protect the privacy of their personal information. Another 79% said it is frustrating to realize that some cannot be trusted to use it appropriately. Meanwhile, 43% said they fear intelligent new services will learn too much about them and their family. Overall, 66% want companies to earn their trust by being more open and transparent with how their information is being used.
Clearly, many people like the notion of personalized service. The Accenture study further noted that 43% of U.S. consumers are more likely to shop with companies that always personalize experiences, as long as their trust isn’t compromised. Meanwhile 31% said they would find great value in services that intuitively learn about their needs over time to customize product, service or content recommendations.
Furthermore, 48% of U.S. consumers surveyed would use 'smart-reordering' services where intelligent sensors in the home pre-empt when a product, such as laundry detergent, is running low and automatically re-orders it on their behalf. Another 36% use digital assistants. While the vast majority (89%) are satisfied with the experience, 40% say it can feel slightly creepy when technology starts to correctly interpret and anticipate their needs.
Overcoming that creepy factor is not going to be easy, but Accenture advises companies consider giving customers full control over their data, build trust with consumers and invest in technologies like predictive analytics to drive their insights into customer needs.