Personalization and big data are retail industry buzzwords these days as retailers and brands seek to design a customer experience tailored to individual consumers’ needs, but it looks like the industry still hasn't found a way to balance consumers' worries about data privacy with their desire to be catered to on a one-to-one basis.
Some 50% of US consumers said they switched companies they buy from this year because of poor customer experience, according to the 13th annual Accenture Strategy Global Consumer Pulse Research, which surveyed more than 25,000 consumers globally, including 2,000 in the US. More specifically, 41% of US consumers said they ditched a company because of “poor personalization and lack of trust,” Accenture said. What does that mean in financial terms? A whopping $756 billion this past year in lost retail and brand sales in the US alone, and globally, $2.5 trillion, according to Accenture.
“It’s a vicious circle” that brands are in with consumers, said Robert Wollan, senior managing director and Advanced Customer Strategy global lead at Accenture Strategy, in an interview. “Consumers want their cake and eat it too.”
In a telling example, while 44% of US consumers said they are frustrated when companies fail to provide relevant personalized experiences, 49% of them meanwhile said they are concerned about personal data privacy, especially amid increased use of “intelligent services” such as Amazon’s Echo or Google Home digital voice assistants. And even though 36% of consumers said they use digital assistants—and nearly 90% of those said they are satisfied with the experience—40% said it can feel “slightly creepy” when technology starts to correctly read and anticipate their needs.
“The conundrum for retailers is, how do you reconcile those things?" said Wollan. “Retailers are working to clarify why they need certain data and are offering incentives to consumers and explaining why they want data."
One answer retailers and brands have come up with to solve that dilemma: introduction of subscription box services that try to emulate those of Stitch Fix or Blue Apron, he told eMarketer Retail.
Data indeed has played a central role in Stitch Fix’s growth. The company says it collects over 85 meaningful data points about its customers—all provided voluntarily.