CommerceNext and CommX Research Shows Majority of Consumers Desire Personalization Amid Data Privacy Concerns

Study results reveal importance of protecting customer data throughout the personalization process to drive loyalty and engagement

Retailers can increase consumer trust by building unique customer journeys and anticipating shopper needs

CommerceNext, in partnership with The Commerce Experience Collective (CommX), Bizrate and Coresight Research, today announced their most recent study data, which found that consumers appreciate personalization marketing but are concerned about data privacy. In recent years, personalization has been at the heart of retailers’ e-commerce strategies as brands compete to show customers who knows them best. But as data privacy concerns come to the forefront, retailers must strike a delicate balance between creating meaningful and personalized shopping experiences while remaining transparent about how they’re using customer data. The survey polled over 1,000 shoppers of different ages and income on their desire for personalization throughout ecommerce experiences and their willingness to exchange personal data for personalization.

The study finds that 66% of consumers prefer to buy from stores that know them and their preferences and 60% of those surveyed also agreed that relevant product recommendations were important to them. However, 87% of these consumers are very concerned about how retailers are using their personal information and data, while 67% will only share data if they know it is being safely stored. The study also found that sentiments varied between age demographics. Nearly three-quarters (73%) of shoppers in the 30-39 age group are more likely to buy from retailers that know them, while older consumers (60+) are more likely to be concerned about how their data is being used.

Overall, respondents’ concern over retailers’ use of their personal data does not appear to influence their desire for personalization. The survey suggested there is a need for retailers to thoroughly examine their personalization programs, goals, and level of data transparency to safely deliver the types of personalization most important and valuable to consumers.

"Personalization is important to shoppers — retailers that can offer more relevant shopping experiences through recommending products or customized customer communications gives brands a competitive advantage," said CommerceNext Co-Founder Scott Silverman. "This report also shows that customers have strong concerns about the security of their personal information, which suggests that retailers should be doing more to let customers know about how they are keeping customers' information secure."

“This snapshot of how consumers view personalization makes it clear that shoppers prefer to buy from stores that know them and their preferences and they notice when retailers get this right," said Brian Walker, Chief Strategy Officer of Bloomreach, a founding member of CommX. "Investments in data-driven personalization are a must for retailers and brands that want to rise above the competition."

Other best practices around zero and first party data collection and utilization retailers can use to increase trust, loyalty, and conversions include:

• Only asking for what is absolutely essential to powering the personalization engine. Superfluous or time-consuming asks may send up red flags in the minds of already on-alert consumers.

• Leaning into recommendations and elevating them. Recommendations are the most appreciated and recognized personalization tactic, so retailers need to get it right by considering what type of product context works best for their audience and the data set they’re collecting (real-time dynamic personalization taking into account every click, top picks based on a profile and multiple visit history, or recs based on browsing history from one session).

• Maintaining strong customer relationships via thoughtful communication. Retailers can utilize customers’ preferences and message history to send them automated, personalized offers that anticipate their needs; invite customers to have a conversation with the brand and ask questions; or modify an incentive to fit their interests.

• Wowing them with unique customer journeys. Although site experiences don’t rank as high in importance as product recommendations for the consumers surveyed here, there is still ample opportunity to show their value. With highly relevant, aptly timed experiences, customers are shown proof that the data they provide results in brands reflecting a deep, personal understanding of their preferences. Brands can also build consumer confidence and trust through shipping transparency and timely order updates from purchase to delivery.

“Pitch-Perfect Personalization: A Consumer Study of Personalization Preferences and Data Privacy Concerns” can be found here. To learn more about joining the CommX community, visit here.

Methodology:

Through Bizrate Insights (bizrateinsights.com), CommerceNext fielded a consumer survey of over 1,000 consumers. Coresight Research performed the analysis of the data used to write this report.

About CommerceNext

CommerceNext is a community, event series and conference for marketers at retail and direct-to-consumer brands. In addition to the annual CommerceNext Ecommerce Growth Show and the esteemed CommerceNexty Awards program, CommerceNext also produces and hosts podcasts, webinars, industry research, an executive dinner series and an online community. Inc. Magazine named CommerceNext to the Inc. 5000 list of fastest-growing private companies in 2022 and also included the CommerceNext Ecommerce Growth Show in their list of the Top 5 e-commerce conferences for 2019/2020. To learn more about CommerceNext, visit https://commercenext.com.

About the Commerce Experience Collective

The Commerce Experience Collective (CommX) is a collection of technology providers and commerce professionals dedicated to creating a digital commerce future that connects brands and customers in meaningful ways. CommX members include: Avalara, the leader in tax automation software; Bloomreach, the world’s #1 Commerce Experience Cloud; Mirakl, the leading provider of marketplace solutions; ShipBob, the leading global omni fulfillment platform; and Sinch, a global leader in cloud communications for mobile customer engagement. CommX is fueled by exclusive research and insights from CommerceNext. For more information, visit: commerceexperience.com.

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