Is personalization better appreciated online or in stores?

Discussion
Photo: RetailWire
Feb 10, 2017
Tom Ryan

A new survey from Episerver, a digital content software provider, shows that consumers are more open to personalization techniques when provided by computer algorithms online than by associates in-store.

The “Reimagining Commerce” study found that 56 percent of online shoppers are open to brands knowing things about them to better tailor the shopping experience. Not surprisingly, some apprehension was seen when consumers were asked specifically about what data was okay to use.

Asked what information brands should know about them to best personalize their online shopping experience, the leading answer was purchase history, agreed to by 38 percent. That was followed by personal interests, 25 percent; demographics, 20 percent; and browsing history, 17 percent. Only four percent felt using social media activity was appropriate to personalize the online shopping experience.

Offline, the study found that 43 percent of shoppers are open to personalized in-store experiences.

Yet exploring specifics around data use shows even deeper concerns offline than those expressed for the online experience. Only 14 percent wanted store assistants to use their past in-store and online purchases, returns, sizes, etc. to tailor their visit with personalized recommendations. Just one in 10 were interested in being greeted by name when shopping in-store.

The findings suggest that consumers have grown accustomed to receiving suggestions from retailers online based on their purchase history as well as having their smartphone experiences tailored by browser history, location and other data.

According to a different study by Ivend, titled “Great Omnichannel Expectations,” 47.8 percent of respondents receive targeted offers online but don’t receive them in physical stores.

Ivend’s survey offered more encouragement for retailers looking to make use of consumer data for personalization. Asked what’s okay for retailers to track, 68.3 percent of consumers in the study said purchase histories; 41 percent, browser history; 31 percent, how much shoppers spend; and 30.6 percent, what shoppers look at in the store. Only 15.9 percent found it acceptable for a retailer to track location based on a shopper’s smartphone.

DISCUSSION QUESTIONS: Does it make sense to you that consumers are more open to personalization techniques online versus in-store? If so, why is that happening and will personalization likely remain a bigger opportunity online than offline well into the future?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I believe we vastly overstate the ROI from personalization while minimizing the risk."
"Retailers must be very careful to balance personalized services with shoppers’ expectations around privacy."
"I’d be interested in a study determining what level of in-store tracking is comfortable to Gen Zers."

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21 Comments on "Is personalization better appreciated online or in stores?"


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Bob Phibbs
BrainTrust

We are being pushed and pulled to “connect online browsing to physical stores” as the best marriage ever. This survey tellingly shows consumers have little desire for associates knowing all of their browsing behavior and using it to somehow seem “personal.” It’s called the creep factor; a person who is not sincere but tries to win your approval by being nice to you. It doesn’t work in dating or retail.

Mark Ryski
BrainTrust

It seems counter-intuitive, but it’s not really. Online shopping provides a false sense of anonymity compared to an in-store experience. Having algorithms serve up options and make suggestions is one thing, having a live person do it is an entirely different proposition.

The interaction with a live person in-store who you may not know but who knows something about you can be off-putting and even a little creepy. I’m not certain shoppers will ever be entirely comfortable with high levels of personalization in-store, however it will largely depend on the store. I believe that the basis for acceptance of personalization is trust. If a shopper trusts the retailer, then personalization will be welcomed. However, if the retailer is not yet trusted, personalization may feel invasive.

Sterling Hawkins
BrainTrust

Privacy is cultural and it changes over time. If this survey was done 10 years ago I’m sure it would have resulted in very different answers. The business economics of being more relevant to more consumers just works. We’ll see much more of it (online and off) improving in both accuracy and delivery mechanism as retailers better understand the technology and human components involved. As the consumer value proposition and delivery mode evolve, so too will consumer acceptance.

Lyle Bunn (Ph.D. Hon)
Guest

As personalization is being defined, consumers want to shop while reducing time and with greater convenience without being “creepy.” Every consumer has their own limits even within each brand engagement. The Minority Report “John Anderton” experience of product promotion is too public, but demographic targeting is working very well for in-store dynamic display. A visual welcome for a patron on a display or associate tablet indicates that on-site personalization can be expected.

Doug Garnett
BrainTrust
Doug Garnett
President, Protonik
2 years 9 months ago

Fascinating point to discuss. I think there’s accuracy in these conclusions but I’m pretty skeptical of the research. People are quite bad at accurately responding to questioning around issues this subtle.

That said, tremendous caution is needed in-store with personalization. First, it’s far too easy for the store associate to feel “creepy.” (Here’s a post I wrote a few years ago about personalization at the 24 Hour Fitness I go to.) Second, we can’t ignore the store associate as easily as we ignore online personalization (which I find incredibly inaccurate). That gives the in-store personalization an overbearing feeling and is bad for customers.

Most of all, I believe we vastly overstate the ROI from personalization while minimizing the risk — it’s become an assumed good rather than an effort that needs to return profit. I rarely find any value in Amazon recommendations (based on the best algorithms and nearly two decades of purchases).

Lee Kent
BrainTrust

It all depends on how it’s done. One of my favorite go-to stores used to be the Bloomingdale’s near my home. Why? I had a personal shopper there named Amber who knew my style, everything I had in my closet and what brands I liked. She would drop me a note when she had something that she thought I would like. Or if she had something that would make another outfit for me. Amber is what gave Bloomingdale’s a large percentage of my wallet. And you can’t do that online.

For my 2 cents.

Chris Petersen, PhD.
BrainTrust

Omnichannel is the new normal for consumers. For them, it is an experience which transcends time and place. Appropriate personalization that does not invade privacy is welcome across the entire customer journey.

The challenge for most retailers is that they still operate digital and physical in silos. Without accessible CRM, the customers’ data required for personalization in-store is simply not available.

There is one more very important thing that is often overlooked. The staff on the retail floor have been providing the ultimate personalization for decades. Retailer stores are throwing away their most powerful differentiator if they they only define personalization in terms product recommendations based on history or mobile offers on phones.

Ian Percy
BrainTrust

While I agree with both Bob and Mark about the “creepy” factor, I’ll push it farther to say that whether it’s face to face or online — it’s ALL creepy.

Come on, does anyone who who gets their name automatically inserted into a message or who sees that some computer remembers everything you’ve ever bought actually think it’s “personal?” If so that points to a very needy person!

I use a local dry cleaner only when cleaning something really expensive because they are expensive. So let’s say once a year max. The guy who takes my stuff at the drive through remembers my name every single time! And that’s been going on for almost 20 years. Now THAT is personal!

Everything else … creepy.

Jasmine Glasheen
BrainTrust
Jasmine Glasheen
Principal Writer & Content Strategist, Jasmine Glasheen & Associates
2 years 9 months ago

Customers expect to be tracked online. When retailers don’t do their research, customers are bombarded with advertisements for products they just purchased. This is a waste of marketing dollars and a great way to get customers to put your brand emails in the Junk folder.

For me personally, the concept of being greeted by name when I enter a store is terrifying. There’s freedom in anonymity and when I go to a brick-and-mortar store it’s usually purely for convenience. I want to grab my stuff and jet. I’m definitely not looking for excessive recognition and tracking. I have to opt in, or sign in, to be OK with a personalized in-store experience. It can’t be mandatory.

Now, Generation Z is more comfortable with automatic personalization. They have a better relationship with the idea of automatic information-sharing than Millennials. I’d be interested in a study determining what level of in-store tracking is comfortable to Gen Zers.

Michael Day
BrainTrust

I’m surprised that “43 percent of shoppers are open to personalized in-store experiences.” I thought that number would be lower. No doubt consumers are still much more comfortable with online personalization compared to in-store (where that “creepiness” sensibility is “out there” as opposed to experiencing personalization via the comfort of your own device/screen). Like everything else, the “Millennial comfort factor” will continue to drive that 43 percent number higher, but I don’t think ever as high as the online personalization comfort level.

Anne Howe
BrainTrust

How close is too close? Shoppers used to say “I need more help in-store” and now they say “never mind, I know more about what’s in your store than the sales associates.” The digital aura of anonymity has become the new personal shopper. The information may be the same but within the digital world personalization feels safer and doesn’t require anyone to look each other in the eye and build trust.

No wonder the fun is gone from physical retail. But here’s the rub. Even Amazon, with scads of shopping history, still sends me offers on bathroom faucets and fixtures I bought three years ago when we built our home. That doesn’t feel helpful or personal to me. It’s frankly annoying.

Scott Magids
Guest
2 years 9 months ago
The online shopping experience has become more personalized, largely as a result of data-driven technologies that give us insights into the shoppers’ needs, wants and emotional motivators. It makes sense that shoppers are more open to this type of personalization while shopping online, as younger online shoppers have raised the bar in terms of the conveniences they expect. In-store personalization takes two forms: Broad demographic targeting and organic informal personalization that naturally arises from repeat business. Nearly every chain store, restaurant or grocery outlet takes time to understand the neighborhoods they are in. Chain grocery stores in ethnic neighborhoods, for example, may include grocery items not found in the suburban outlets. Informally, personalization occurs organically when you return multiple times to your favorite restaurant, and your waitress says “The usual, hon?” because she knows your order by heart. In online shopping venues, personalization takes on a more formalized and data-driven form, and is really nothing more than an automated and highly efficient version of a waitress who recognizes you and knows what you like. But… Read more »
Phil Rubin
BrainTrust
2 years 9 months ago

Too often we confuse or mis-associate personalization with relevance and recognition. There are degrees of precision that are both valued and appreciated and those are not necessarily aligned with what we often consider as personalization, which is more 1:1.

Retailers struggle to be precise — see the discussion earlier this week on how most retailers guess whether they have goods in-stock for BOPIS — and once you get to a store-level this makes personalization problematic.

Naomi K. Shapiro
BrainTrust

Customers being much more open online is a no-brainer. Probably because we think it’s all about technological ability to grab and rank and reply to things you’ve done online. If a real person does it in a store it is, as almost everyone noted, creepy. That’s information I’d prefer to keep personal and solicit help when I (emphasize “I”) WANT IT, not the other way around. Jasmine pretty well defined the whole feeling, with which I agree.

Di Di Chan
Guest
Out of the 15 questions asked in the “Reimagining Commerce” study, there was only one that asked about the in-store experience. And it’s a vague question about if shoppers want the store assistant to personalize their experience. Here’s the link to download the survey. The question that asks about in-store experience is: Question: “When shopping in store, what do you want store assistants to know/do?” Answer choice: “Use a mobile app to locate and order the product I’m looking for in another store or online” (23 percent) “Use a mobile app to determine the product I am most likely to want from the inventory that is currently in stock” (16 percent) “My past in-store and online purchases, returns, sizes, etc. and tailor my visit with personalized recommendations” (14 percent) “Follow up with me after my purchase” (10 percent) “Greet me by name” (10 percent) The framing of the only off-line question in the survey is obviously biased to promote online personalization (by a digital content company). It’s reasonable that many people would not want “John… Read more »
Ross Ely
Guest

Retailers must be very careful to balance personalized services with shoppers’ expectations around privacy. An earnest effort to greet a shopper by name, for example, can be perceived as a “creepy” invasion of privacy.

Retailers should always present personalized services and offers with respect for the privacy of the shopper. The private nature of online shopping (compared to the social nature of physical stores) will continue to make online shopping a lower-risk area for personalized services and offers.

Ralph Jacobson
BrainTrust

The positioning of the survey questions has everything to do with the responses received, of course. If you ask, “Do you want a store associate to know everything about your past purchases?” I’d say, NO! That is personal business and can cause angst in a face-to-face environment. However, if you ask, “Would you like assistance in-store with your shopping list to help ensure you find everything you need?” I think you would get far different survey results.

Make the in-store experience compelling with real-time personalization and other tools, and the adoption of personalization will rival online adoption.

Kenneth Leung
BrainTrust

I think personalization online is more acceptable and easier to customize to be more subtle, because the shopper can choose personalization by logging in or browse anonymously. Plus, any cringe worth bugs in the recommendation is easily discounted as “oh the machine screwed up.” In person, however, personalization is more awkward because it maybe communicated by another human being and there is no desk/keyboard to hide behind. Personalization in-store needs to be delivered in a much more discreet manner to make the shopper comfortable, which is much harder to do

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
2 years 9 months ago
While customers have grown to appreciate online personalization, they are still not accustomed to the in-store personalized service because it is not a frequent experience. Today, very few retailers have the capability to personalize the experience based on a customer’s profile and purchase history in the store. According to our 2017 POS Survey, only 23% of retailers personalize the shopping experience based on previous purchases, however, within three years, another 57% plan to offer this service. Customer expectations evolve and I think that as more consumers have a positive experience with an in-store associate providing them personalized services, they will eventually expect it from most retailers. In some categories like apparel and high ticket items, the personalization will be delivered by an associate and in a high-volume, low price product retailers the personalization will likely be delivered as recommendations on the customer’s phone. Just because you can do something doesn’t mean you should … customers need to opt-in to the program and the process has to be carefully applied at store level. We need to… Read more »
Min-Jee Hwang
Guest
With the social norms that society has created, it makes perfect sense. Back before everything was online and easily accessible through the internet, it was common knowledge to be extremely secretive and private. I still remember the numerous warnings to never post your name online or any sort of information that could be traced back to you. Today we post everything online and share it with anybody who’s willing to bother looking, from what we ate for lunch to what we want for Christmas. Eventually, social norms could move towards accepting personalization in reality as it becomes more popular. Currently however, it’s viewed as creepy and an invasion of privacy having a stranger know your name and preferences. Veiled in a false sense of anonymity online, the feeling is easily ignored. Personalization in person reminds me of a scene in the movie “Minority Report” which takes place in the future. Advertisements would scan your eye, pull up who you are and proceed to directly pitch their product to you using your name. Sure it was… Read more »
Carlos Arambula
BrainTrust

It makes perfectly good sense. Consumers are very concerned about privacy and somehow an algorithm appears less invasive than another human. I don’t think this will change, and I anticipate that “location” tracker will gain acceptance as they learn of the potential benefits.

wpDiscuz
Braintrust
"I believe we vastly overstate the ROI from personalization while minimizing the risk."
"Retailers must be very careful to balance personalized services with shoppers’ expectations around privacy."
"I’d be interested in a study determining what level of in-store tracking is comfortable to Gen Zers."

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