Millennials lead growing demand for personalization but worries about data sharing on the rise
According to a new joint study from the National Retail Federation (NRF) and GfK, 66% of US millennials are more loyal to brands that let them give input and shape the products and services they can buy, but with concerns about sharing personal data mounting, personalization is far from being an easy copy-paste cure-all.
Entitled “Decoding the Personalization Paradox,” the report highlights that thanks to advances in data analytics, many retailers are now in a position where they are attempting to offer increasingly personalized products and services to ever broader customer bases.
In this context, the NRF and GfK have outlined some key trends that companies trying to implement personalization at scale should be aware of.
For example, while millennials continue to be increasingly interested in personalization, with 66% of those surveyed in this demographic saying that they like it when a website keeps track of their visits and recommends products or services to them, 48% of all consumers said that it was very important to actively manage their online identity, with concerns about data breaches having almost doubled in the last ten years.
In light of these findings, the NRF and GfK conclude that “consumers are growing more open to exchanging personal information with brands if there is a clear benefit attached, such as recommendations tied closely to their needs,” but warn that, “With data breaches and threats to personal security becoming more commonplace, brands need to ensure customers they are being adequately protected.”
According to the report, one way that brands can help to reassure their customers is by making it easy for them to choose what information they want to share. As skepticism about technology in general rises, however, the report also suggests combining technology with a more human approach, complementing an AI customer service offering with the ability to speak to a real person should customers have further questions, for example.
Companies also need to know what their customers’ values are in order to be able to effectively tailor products and services to their needs. Both Gen-Z and millennial consumers strongly supported statements such as “I only buy products or services that appeal to my values” and “I have avoided a particular brand or store in the past month because I disagree with the company’s values.”
This is hardly surprising, as younger shoppers’ concerns about the environment and social issues are well documented, but brands shouldn’t think that they can simply pay lip service to this kind of engagement. Indeed, authenticity remains a key element for connecting with customers, ranking as the third most important value among those surveyed by the NRF and GfK.
Along with environmental and social issues, it’s also important for brands to recognize how consumers’ values are changing in terms of their self-perception. 47% of all surveyed shoppers said that they didn’t feel constrained by social expectations related to their age or gender, while “being true to myself” is an increasingly popular core definition of personal success.
It’s not only consumers’ values that are changing though, their lifestyles are also increasingly hectic, with 54% of survey respondents saying that they feel stress or tension at least a few times a week, while “I’m always looking for ways to simplify my life” was the eighth most popular consumer attitude among 44 discussed with survey participants.
The report suggests that this situation actually presents an interesting opportunity for brands that can successfully leverage data to offer consumers a more simplified shopping experience by curating personalized product lists, an approach that looks all the more intelligent when one considers that almost half of those surveyed said that they thought there were too many products on the market, a figure which rose to 60% among millennials.
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