Study: Retailers missing the mark with personalization
Customers want a personalized shopping experience, but not the one they are currently getting.
According to a study of 1,200 consumers and 400 retail executives across the U.S., U.K. and Australia, more than four in 10 consumers (42%) – and almost two-thirds of Millennials (63%) – said they would pay more for improved personalization. Yet 80% of consumers do not feel they are provided with a personalized shopping experience both in-store and online, and 53% say they felt negative emotions the last time they visited a store. Only 39% feel confident in retail stores today.
The study, conducted by Oracle NetSuite in partnership with Wakefield Research and The Retail Doctor, finds that more than half (58%) of consumers are uncomfortable with the way stores use technology to improve personalization in their shopping experience. Almost half (45%) reported negative emotions when they receive personalized offers online.
Given these consumer results, it is not surprising that only 11% of surveyed retail executives say they fully believe that their staff has the tools and information needed to give consumers a personalized experience. Ninety percent of retail executives are not confident the use of advanced technologies to customize the shopping experience is meeting consumers’ needs.
Part of the difficulty retailers are having in meeting customer experience expectations may be a disconnect with customers on the type of experience they want. For example:
• 73% of retail executives believe that the overall environment in retail stores has become more inviting in the past five years. Only 45% of consumers agree, with 19% stating it has become less inviting.
• 80% of retail executives believe that consumers would feel more welcome if in-store staff interacted with them more. Less than half (46%) of consumers agree, with 28% noting they would feel more annoyed.
• 79% of retail executives believe chatbots are meeting consumer needs. Two-thirds of consumers (66%) disagree, with respondents noting that chatbots are currently more damaging to the shopping experience than helpful. Ninety-five percent of customers do not want to talk to a robot while shopping online or in-store.
• Almost all (98%) retail executives think that engaging with customers on social media is important to building stronger relationships with them. Only 12% of consumers think it has a significant impact on the way they think or feel about a brand.
• 79% of retailer executives believe having artificial intelligence (AI) and virtual reality (VR) in stores will increase sales; only 14% of consumers believe the technologies will have a significant impact on their purchase decisions.
• Almost all (98%) retail executives believe AI and VR will increase foot traffic, while 48% of consumers do not think VR or AI would have any impact on how likely they are to go into a store.
The study also indicates strong consumer interest in brick-and-mortar stores, given the proper shopping experience.
• 97% of consumers agree there is a need to go into a physical store to purchase items and 70% believe the most appealing retail stores have features that simplify and streamline the shopping experience.
• The top features attracting consumers to physical stores are options consistent with online (36%), simpler store layouts (35%), staff orders on a mobile device (29%) and in-store kiosks that allow consumers to purchase products that are unavailable in-store (23%).
• The top technology advancements that consumers want to utilize when shopping in-store or online are self-checkout kiosks (38%), VR try-on (23%) and mobile payments (15%).