Retail personalization: Connecting with customers without being invasive

Most of us have experienced that feeling of unease when a company inadvertently reveals that it knows just a little too much about us. From the “Happy Birthday!” message on an ATM screen to the social media ad for a product you were just discussing, there’s a fine line between connecting with customers and alienating them. Anything that’s too personal or asks for too much information may turn off many people from further interactions with your brand. 

Even worse is personalization with errors that show that things are not actually personal, they’re just automated. For example, emails addressed to someone who’s not you, data fields left empty so an email reads, “Dear <First Name, Last Name>” or offers sent to the wrong customer.

While personalization can lead to pitfalls, most customers want customized experiences from retailers. According to a McKinsey report, 71% of consumers expect personalization. What’s more, the report states that an even greater percentage (76%) get frustrated when they don’t find it.

When done right, personalization can delight customers, increase sales and build loyalty. For example, when your favorite restaurant adds your seating preference to their system. Or when a sandwich shop sends you a push notification that you’re just a few points away from a free sandwich. In one study, 80% of business leaders said consumers spend 34% more when their experience is personalized. 

Here are five ways to keep your personalization strategy engaging, not invasive.

1. Avoid data silos: Non-breaking news alert: Online shopping keeps growing. However, 43% of customers still prefer to shop in non-digital channels according to Salesforce’s 2024 State of the Customer report. As shopping behaviors evolve, we’ll see consumers using multiple channels: online, in-store, ship-to-store, etc. So, what does that mean for your personalization efforts? 
   
   It means your data needs to be connected, with all channels working together. Consumers may be somewhat channel-agnostic, but they expect a seamless experience however they shop. 
   
   Businesses should house their customer database(s) in a central hub that collects information from all customer engagement touchpoints. Keeping data siloed can create a disjointed relationship with customers and present your brand as disorganized. (For example, a customer goes to your website and sees they have 500 reward points, but on the app, it only shows 200 points.) 
   
   Centralized data fosters strong customer bonds and helps present a unified customer experience across a range of touchpoints such as: 
   
   ●     Website 
   ●     In-store 
   ●     Retail app 
   ●     Marketing communications (email, direct mail, in-app messaging, SMS, etc.)
   
   What’s more, it gives all relevant employees access to the customer information they need. This is essential in a multi-location enterprise whether your data is stored locally or with an offsite cloud provider. In either case, you’ll need high-speed connectivity with low latency to facilitate real-time data access and sharing across your organization. 
2. Data quality - and security - is key: Many personalization pitfalls come from poor or missing data. According to industry research, 59% of brands use out-of-date customer information and 57% get customer details wrong. One way to mitigate these risks is to limit your use of third-party and purchased data. Those sources can often be outdated or simply have bad information. The safer option is to rely more heavily on first-party data collected by your organization. 
   
   No matter how you store your data, keeping it secure can help you avoid bad customer experiences or situations that can impact your bottom line. According to a study by Cisco, almost 60% of respondents experienced a cybersecurity incident in the last 12 months. What’s more, 41% reported that the overall cost of the incident was more than $500,000. 
   
   To help protect all that valuable data, consider a managed security solution from a trusted partner. Good solutions offer comprehensive features including firewall and VPN, antivirus and anti-spyware, content filtering and intrusion prevention. To simplify your IT management, look to see if you can get managed security from the same partner that provides your network connectivity. In addition to getting a more robust security solution, the outsourced managed services model helps free your IT staff to focus on their core responsibilities and larger initiatives. 
3. Transparency is important: According to a personalization survey conducted by CI&T, 87% of customers want to be asked for their permission to collect personal data first. Letting a customer know how you’ve acquired their information and why you’re asking for it can go a long way toward building trust and loyalty. They want to know what you know — and how you know it. 
4. You have to give to get: Being clear about why you’re asking for their data is important. But you’re more likely to get the data if you’re offering something for it. Consumers are more willing to offer their information if you can show how it might benefit them. For example, the data can help you offer customized product recommendations, loyalty points or early/exclusive access to a product or promotion. 
   
   Research supports the premise that data collection is a value exchange between the consumer and the retailer. According to the 2022 Retail Personalization Index from Sailthru, 80% of consumers said they would share data for deals and offers, while 70% would do so for loyalty points. Make it worth their while and you’ll both come out ahead.
5. Connecting all relevant channels: According to McKinsey, companies that prioritize marketing personalization achieve 40% more revenue. Therefore, it’s critical for retailers to seamlessly connect all relevant channels, including customer-facing interactions as well as business operations. Data, timing, and transparency are the keys. IT networks play an essential role in making sure the information that powers personalized experiences is accessible and secure. Nothing erodes a customer relationship like a bad experience caused by improper data management. 

With a partner such as Spectrum Enterprise, retailers can rely on secure cross-channel connectivity that delivers a consistent experience. Customers and employees have a more positive interaction through automated path intelligence, traffic prioritization and routing based on business intent. The end result: an optimal, personalized experience. And that’s good for everyone. Learn more about how Spectrum Enterprise networking solutions can power your retail personalization efforts.