Personalisation: the value adding factor that speaks to consumer needs
Within consumer retail one single topic has dominated conference presentations and white papers recently – personalisation. Personalisation is a top strategic priority for many retailers and brings with it a whole host of organisational challenges such as achieving the right structure and alignment across internal teams, embedding the right culture and processes to power personalisation initiatives as well as overcoming operational limitations.
A number of brands are already delivering personalised products and services, from trainers that can be designed exactly as the customer wants them, to beauty products tailored to skin type, to web content that’s related to a customer’s individual behaviour. Those who do manage to deliver a personalised service or product are reporting increases in revenue, so clearly there is a return on the investment.
We decided to take a look at personalisation from a consumer point of view to understand what is driving this trend and what value, if any, consumers see in it.
Consumers value personalisation and are willing to pay for it
The consumer drivers around personalisation are long-term inherent trends; one is a deep seated need within the human psyche to own belongings, the second is a more recent psychological need to be seen as an individual, which personalisation can satisfy, albeit briefly. Given this dual appeal to the consumer psyche, it’s not surprising that personalisation is a growing trend.
Consumers notice personalisation when it occurs; awareness of personalisation is high with nearly 90% of UK consumers have experienced some kind of personalisation, from emails with their name on it, to products tailored to their preferences. We discovered that consumers do assign a monetary value to personalisation; 35% of consumers would be willing to spend more on tailored products, with the majority of this group prepared to spend up to 20% more. Clearly there’s an opportunity to increase revenue by innovating around personalised products and services
Technology has provided the facility to achieve personalisation for the mass marke
While these consumer needs have been around for the long term, the functionality that allows brands to deliver personalised products and services to consumers without a large increase in cost is a more recent development and one that is pushing this trend to new heights today.
Advances in just-in-time manufacturing means that companies can offer wider product ranges at an achievable cost. Secondly smartphone developments have allowed for in-depth data gathering and data exchange between consumers and brands. This has revolutionised consumer engagement, providing the ability to personalise at scale based on factors such as behaviour, selected preferences, or even location.
The potential application of these manufacturing and data trends is still being explored, and the view is that there are plenty more innovative ideas yet to be discovered in the aim of broadening customer engagement and increasing product or service value.
Crossing the ‘creep line’ is a serious risk and brands need to tread very carefully
Despite the fact that consumers recognise that technology has allowed for a greater degree of data exchange, this hasn’t reduced their fear of data breaches and their desire to control the flow of data between them and the companies they engage with. In our survey, 77% of consumers say it’s really important for them to be in control of their personal data and what they share with brands.
It would be very easy for a company attempting to personalise a service to cross the line into being seen as ‘creepy’. For example, over half of consumers would find notifications from retailers based on their location ‘creepy’, despite the fact that GPS location is a common data share from smartphone apps.
We also found that getting personalisation wrong can have serious consequences and it seems that it’s easy to do so; 1 in 4 consumers in our survey say they have already had a negative experience of personalisation and for 81% of them, it had an impact on their perceptions of the brand. It’s no wonder that many companies are treating expansions into personalisation with such caution
Find out how your brand can make the most of personalisation:
Find out more about our study and discover how your brand can make the most of your strengths to deliver personalisation without crossing the creep line