How Retailers Personalize Shopping Experiences to Be Helpful, Not Creepy

If you listen closely, you may hear the holiday bells jingling in the near distance as retailers start preparing for the peak holiday season. A key focus this year is how to navigate evolving consumer sentiment and continue delivering value for cost-conscious shoppers. Many people are facing considerable stressors already, so retailers should seek out ways to make the shopping experience frictionless. Could personalization be the answer?

About 70 percent of B2C retailers consider personalization to be an essential part of their e-commerce strategy, however, it’s important to know how consumers feel about these strategies. A recent Algolia consumer survey of 1,000 U.S. adults uncovered a few key trends that show how retailers can be helpful rather than creepy when it comes to personalized experiences this peak season.

Is Personalization Creepy or Helpful?

Some 58 percent of consumers have felt a retailer’s personalized recommendations were creepy, but even so, this hasn't prevented people from participating in the data-powered e-commerce world. More than half (60 percent) of respondents purchased an item they directly searched for on a retailer’s site while 37 percent bought an item that was recommended based on their buying and browsing history.

Implications for Retailers

There’s a knowledge gap for consumers around how their data is being utilized by retailers. At the same time, personalization is only effective when fed accurate activity, so it requires buy-in to achieve helpful results. The key for retailers is to be transparent in their data collection practices and communicate how these insights will shape personalized recommendations.

To Be Helpful, Be Transparent

Consumers are likely to share their browsing and purchasing activity with a retailer if they know this information will support enhanced e-commerce experiences, according to 58 percent of consumers.

Going deeper, the survey asked people what would make them more likely to provide data with a retail website, and complete transparency on how the data will be used was top of the list (54 percent). Information on the retail website’s data security and privacy policies (35 percent) came in second, followed by incentives through loyalty programs and perks (29 percent).

Implications for Retailers

When planning for peak, retailers must be upfront about how they’re using customer data to enhance the shopping experience — and offering discounts, free samples or trials, or another perk can go even further for the budget-minded shopper.

Consumers Want More From Retailers

We can’t ignore that some consumers are hesitant to share their data, and yet 59 percent of shoppers think that retailers can do more to improve personalization.

Respondents said they would be open to sharing the below information with a retail website if it meant they’d experience a more tailored approach:

• their shopping preferences based on what they pick and choose on the retailer’s website (49 percent);
• purchase history on the retailer’s website (33 percent);
• browsing history on the retailer’s website (31 percent); and
• direct feedback and reviews (22 percent).

The survey also found that 60 percent of consumers would use a “thumbs up/thumbs down” feature to train future recommendations on a retailer’s website. It’s also worth noting that only a fraction (6 percent) of people think retailers already have something similar in place.

Implications for Retailers

Retailers have an opportunity to treat personalization more like a social media platform. Consumers are aware that their engagements often personalize their algorithms on apps like TikTok and Pinterest, so why not get personalized shopping recommendations that are user-friendly? Retailers can empower their customers to take charge of their personalization journey, offering them ways to opt in/opt out of the information they want to disclose. This allows shoppers to give feedback for future tailored experiences in a privacy-focused way.

The holiday season is stressful for retailers and consumers alike, but personalization can go a long way in making the gift-giving process easier by serving people relevant, tailored recommendations. Before the peak holiday season, retailers should take note of what consumers are willing to disclose and alter their digital ecosystem accordingly. Otherwise they risk losing out on a positive customer experience during the busiest time of the retail calendar.

Piyush Patel is chief ecosystem officer at Algolia, a leader in globally scalable, secure, digital search and discovery experiences that are ultrafast and reliable.