Personalization is not a new concept. It’s likely that your hairstylist knows how you like your hair cut and can make recommendations on different options and products that best suit your hair type. Restaurants you frequently visit may know how you like your steak cooked and can provide suitable wine-pairing suggestions. Personalization happens often in the physical world around us.
But what about in the digital arena? Personalized marketing is being seen as providing value for shoppers seeking what they like and want. With the digital world enabling consumers to channel hop, switch between competing companies, and price compare with ease, businesses are recognizing they must meet those consumers’ needs and desires with the right messages to drive engagement and sales.
But are businesses getting this right and does it align with the expectations of consumers when it comes to personalized marketing messages? To better understand this, Periscope By McKinsey recently conducted a survey in the UK, Germany, France, and the U.S., four of the most mature ecommerce markets in the world. Well, consumers are certainly receiving personalized messages with more than 50% of respondents reported to be frequently receiving them. The U.S. and France receive the most personalized messages, with 62% and 60% of consumers, respectively, followed by Germany and the UK with 55% and 53%.
When it comes to attitudes towards receiving personalized messages from companies and brands, we see most markets surveyed indicate a positive attitude. Consumers in the U.S. again had the most positive feelings towards them, with 50% either really or somewhat liking to receive them, revealing high opportunity for businesses to effectively engage these consumers. French and UK respondents were considerably less enthusiastic, with 38% and 37% respectively, feeling somewhat or very favorable towards them. Consumers in Germany were more skeptical, with only 29% having a positive feeling about personalized messaging – which seems unsurprising given the well-known data protection concern of Germans.
Looking more closely at the data revealed 5 key trends, 3 of which we can explore here:
In the U.S. (56%) and Germany (33%), men feel more positively about receiving personalized messaging than women (44% and 25%, respectively). In the UK and France, however, women have a slightly more positive attitude than men in those countries. 39% of French and British women either somewhat or very much like to receive personalized messages as compared to 37% of French and 35% of British men.
Age also impacts the attitude towards personalization. With the exception of Germany, consumers aged 30-39 seem to respond more positively to personalized messaging, followed by respondents aged 18-29. Older generations across the markets surveyed and demonstrated a significantly stronger dislike of this type of communication.
When asked from which types of companies consumers would like to receive personalized messages, in the U.S., 51% said grocery stores, with 49% saying restaurants and bars, and 36% noting fashion retailers. The UK also tracked these findings at 44%, 40%, and 33%, respectively.
It is a different view in Germany, where the top three categories change: 29% opted for grocery stores, fashion retailers followed at 28%, and then hotels, airlines, and car rental companies at 25%.
Interestingly, while certain categories of companies are currently sending more personalized messages than others, survey findings show that some businesses, such as financial services and utility providers, would be better served to reduce the number of messages they send, while others, such as grocery stores, restaurants/bars and fashion retailers, may be missing out on the potential personalized messaging could deliver to them.
Brands have a long way to go on getting personalized messages right, with around 40% of consumers across all markets stating that the messages received only sometimes captured the characteristics that would make them personal – this is a red flag for businesses – and a huge opportunity for those that can get it right. While the number of respondents who said these messages rarely or never fit these characteristics outweighed those who said they usually or often do in almost all the markets, the U.S. proved to be the exception.
It is clear from the research that consumers in different countries need to be approached differently when it comes to personalized marketing. For example, U.S. consumers said the top three attributes to influencing personalization are: when a business offers items that are a good fit for their personal style, relate to items they frequently purchased, and when messaging tied to a special occasion. However, German consumers feel communications are most personal when they include items that fit their style, their name, and that reference a recent search they made.
France and the UK were different again. In the UK consumers ranked seeing their name, something tied to a special occasion and an offer that suits their style, as the top attributes. While French consumers selected in priority order, linked to a special occasion was an offer that matches their style and their name, as their top three personalization criteria.
Personalization initiatives can deliver significant value, lifting revenue, driving higher customer acquisition rates and engagement. But the key is that they must be done right. But companies are missing the boat on delivering consistently relevant experiences at scale. In order for businesses to be successful with their personalization efforts, they should employ advanced analytics and solutions to better understand their consumers and manage effectively targeting trade-offs to drive a change in behavior. If they don’t do this, they risk annoying audiences with their outreach which, in turn, negatively impacts brand reputation and customer loyalty.
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