Why In-Store Personalization is Failing
Research shows that shoppers now expect tailored shopping experiences. Brick-and-mortar is no exception.
There’s just one problem: in-store personalization is failing shoppers and hurting results.
Customer Experience Falls Short
Make no mistake—shoppers are seeking a superior in-store experience. In fact, a RightNow Customer Impact Report reveals that 86% of shoppers will pay up to 25% more for a better customer experience. But what exactly defines a “better experience” in the minds of your shoppers?
Shoppers crave more tailored experiences in-store, but in general, they feel that current tactics are lacking or altogether ineffective:
- InReality’s Reality of Retail Report shows that half of shoppers never or rarely find ads, content, or promotions seen in-store valuable.
- According to a report published by Segment, two-thirds (71%) of shoppers are frustrated by these impersonal experiences.
- Research from TimeTrade also shows that 32% of shoppers think personal assistance is missing from the in-store experience.
Further, according to our report, 81% of shoppers are already at a mid-to-late buying stage when they enter a store. Retailers and brands must therefore cater to different journeys by offering more tailored, relevant experiences.
Personalization Ignores the Majority of Shoppers
Given that smartphones seem to be in-hand 24/7. It makes sense that retailers and brands would want to tap mobile for personalization by delivering targeted messaging and promotions while shoppers are in-store. However, one of the biggest problems with personalization is that the majority of shoppers are “unknown”, i.e., these shoppers have not downloaded an app or opted-in in some fashion to make mobile a viable or even practical option. As a result, this tactic only reaches a very small sample of shoppers—a number that just doesn’t make sense:
- Roughly 77% of Americans own a smartphone, according to Pew Research.
- Of these shoppers, mobile targeting relies on those who have a smartphone and have downloaded the mobile app or have WiFi turned on.
- Google reports that 53% of smartphone users don’t have their favorite brand’s app installed on their phones, and even when they do download an app to receive an exclusive deal, 63% will delete it shortly thereafter.
- Localytics reveals 80% of all app users churn within three months.
- Google also shows that two in three shoppers feel they can achieve the same goals on a brand’s mobile site as they can on an app, rendering in-store app offerings ineffective.
Personalization Often Crosses the Line
What’s also important to note is the fact that shoppers feel personalization tactics have begun to cross an important line. Beyond simply missing the mark, certain marketing personalization tactics are just plain off-putting. During an age in which more Americans are more worried about data privacy than their personal income (CBS News), shoppers feel stores have begun encroaching on their anonymity.
Balancing the demand for a tailored experience in-store while respecting shoppers’ privacy is where brick-and-mortar is clearly struggling. According to our last research report, the majority of shoppers (85%) want content or promotions tailored to them in real-time while shopping, but not through their mobile devices. 63% of shoppers say they want content or offers tailored to them in real-time via in-store screens or digital signage rather than on their mobile devices.
Certainly, shoppers use mobile devices for countless shopping interactions, but they want to do so on their terms. Receiving a mobile notification after walking by a store, for instance, seems to violate an important right to privacy: according to Accenture, 40% of shoppers find this type of message “creepy.” Personalization suddenly feels overly personal. Shoppers have drawn a clear line, and staying within the boundaries they’ve established is essential to retaining their trust and respect. Our Reality of Retail Report findings further support shoppers’ desire to remain anonymous: in the next three years, 84% of shoppers stated that they do not want store employees greeting them by name.
The Cost of Today’s Personalization
The “creepy” factor isn’t just a nuisance to shoppers; perceived invasiveness could actually push them away for good. According to Marketing Dive, poor personalization efforts and lack of trust led 41% of customers to switch companies in 2016, while 22% said they left for another brand specifically due to a creepy marketing experience. Accenture provides some compelling points indicating just how significant a role privacy plays in the customer experience:
- 87% of consumers believe it is important for companies to safeguard the privacy of their information
- 73% consider the inability to trust a company with the personal information they’ve provided to be a top source of frustration
- Two-thirds of shoppers willingly share information in exchange for some perceived value, but if the value exchange or trust upon which it is based becomes compromised, shoppers will leave
What to Do Instead
So, how can brick-and-mortar retail meet shoppers’ desire for more curated experiences? It demands a new approach, supported by a few four key pillars:
- Target Specific Shopper Personas
Personalization today is often delivered at the point of purchase and in response to shoppers’ past purchasing behaviors or relatively fixed attributes, such as their name, zipcode, or number of children. There is little focus on understanding the shoppers’ journey, preferences, or their needs in context of their circumstances. Instead, brick-and-mortar should use targeted, dynamic marketing that can respond to specific personas in real-time, i.e. based on shopper demographics, behavior and/or in-store journey. They should offer relevant product information and recommendations at the right time during a shopper’s journey, but without relying too heavily on invasive mobile techniques. Rather than mobile, next-generation digital signage driven by an analytics-engine can be integrated thoughtfully throughout the in-store journey to react to shoppers and tailor their experience in real-time at key points of interest.
- Maintain Shopper Anonymity
Targeting shoppers because they have a smartphone is not the best way to segment or get in front of your shoppers. Shoppers are now telling us this themselves. The value isn’t in being able to identify a shopper by name, again it’s being able to cater to their unique needs and shopping journey in context of their circumstances—while they are engaged. Brick-and-mortar brands and retailers need to be smart about how they collect and use shopper data. There are now retail store analytics solutions that are completely anonymized—they collect all the shopper insights brands and retailers need and offer built-in ways to use these insights in real-time to dynamically tailor the shopper’s experience without the creepy factor.
- Arm Store Employees
Brands and retailers also need to arm their store employees with information so they can deliver targeted assistance to shoppers. Instantly providing information on relevant products to shoppers that have been in a particular area for a long time can greatly improve the experience. Rather than a name, email address, or phone number, give store employees information on the shopper’s journey which can be used in their approach. Insights into the products they’ve looked at, the categories they’ve browsed, and their path through the store are more effective for cultivating a curated experience than shoppers’ personal information.
- Engage Unknown Shoppers
Above all else, start appealing to all your shoppers—not just the ones that are “known”. After all, these “known” shoppers makeup only a very small sample, and may not even include your most valuable shoppers. Instead, use in-store analytics to trigger in-store digital signage and engage all your shoppers in real-time based on shopper personas. This shared, non-invasive space is more effective than relying solely on smartphones for delivering promotions and messaging.
Responding to today’s sophisticated shopper with one-size-fits-all marketing is a fast road to failure. Shoppers do expect some give and take when it comes to receiving a more engaging in-store experience, but their expectation of anonymity remains intact. Thus, the most effective approach brick-and-mortar brands and retailers can take is capturing anonymized data and using it wisely to interpret how each shopper is moving through their chosen journey to deliver the assistance, promotions, and messaging shoppers crave in real-time.
Want to learn more about how you can tailor the in-store experience to each of your shoppers while maintaining their anonymity? Check out our solutions.
Image Credit: iStock/geber66