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GFK & NRF present: "The Personalization Paradox"

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NRF NXT 2019
July 23, 2019
Joe Beier, Executive Vice President, GfK Consumer Insights
Rachel Bonsignore, Senior Consultant, GfK Consumer Life

Published in: Retail
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GFK & NRF present: "The Personalization Paradox"

  1. 1. Joe Beier | Rachel Bonsignore GfK July 23, 2019 The Personalization Paradox
  2. 2. © GfK July 24, 2019 | GfK Personalization Paradox 2 …leveraging insights to provide a customer experience that is tailored to a unique consumer profile Personalization is…
  3. 3. © GfK July 24, 2019 | GfK Personalization Paradox 3 The personalization paradox question: How can something so specific and nuanced be delivered at scale?
  4. 4. © GfK July 24, 2019 | GfK Personalization Paradox 4 The personalization paradox answer: By delivering on the benefits consumers value most via personalization
  5. 5. © GfK July 24, 2019 | GfK Personalization Paradox 5 Macro trends illuminate the benefits consumers value most STRESSSELF SHARING
  6. 6. © GfK July 24, 2019 | GfK Personalization Paradox 6 Consumers are increasingly self-focused, impacting the way they shop Roper Reports Worldwide 2011-18 QC1, QE1/J1/M1; Roper Reports US Spring 2012-17 QD13 Being true to myself Personal ideas of success (2010-2017) Being a good spouse or parent Having friends that respect me Authenticity #3 personal value Being knowledgeable SELF 47% “I don’t feel constrained by social expectations of my age or gender” 50% “The brands I buy are an expression of myself”
  7. 7. © GfK July 24, 2019 | GfK Personalization Paradox 7 STRESS Roper Reports Worldwide 2015-2017 QH5; Roper Reports US Fall 2014 QP7 of Americans find at least one of 14 problems to be a major source of stress 19 points from 2015 90% Stress is intensifying Top stressors: • The amount of money to live on • Self-pressure BUILDING UP OVER TIME In 2014, Americans’ stress levels had reached the highest reading in three decades of research
  8. 8. © GfK July 24, 2019 | GfK Personalization Paradox 8 As anxiety rises, the need for streamlining grows Roper Reports Worldwide 2014-2018 QC1, QE1/J1/M1, QK2 47% “I’m always looking for ways to simplify my life” #3 definition of innovation: simplifying something that was too complex Simplicity #19 personal value in the US +7 ranks since 2014 STRESS
  9. 9. © GfK July 24, 2019 | GfK Personalization Paradox 9 Consumer openness to engage is rising – led by Millennials GfK FutureBuy® 2018; Roper Reports Worldwide 2018 QO2 43% “I really like the idea of tech that ‘knows’ me and can make recommendations and take actions based on my wants & needs” “I like it when retailers contact me on my smartphone when out shopping” “I like it when a website keeps track of my visits and then recommends things to me” +5 pts from 2015 +8 pts from 2015 63% 32% 55% 28% 33%
  10. 10. © GfK July 24, 2019 | GfK Personalization Paradox 10© GfK July 24, 2019 | GfK Personalization Paradox Nearly twice the 2009 share 12% 2018 2009 Roper Reports Worldwide 2018 and 2009 A2; Roper Reports Worldwide 2016 O2 Paradoxically, worries about data security are also on the rise Personal information falling into the wrong hands is a top personal concern 61% of IT professionals have experienced a data breach 48% “It’s very important to actively manage my online identity” $5 BILLION Civil penalty Facebook may have to pay for mishandling user data 19%
  11. 11. © GfK July 24, 2019 | GfK Personalization Paradox 11 Personalization benefits cascade from leading macro consumer trends Control STRESSSELF SHARING Values alignment Simplification Mode alignment Peace of mind
  12. 12. © GfK July 24, 2019 | GfK Personalization Paradox 12 Enabling customers to guide an outcome is future-focused personalization GfK Future Buy 2018 Control “I would be more loyal to a brand or retailer that lets me give input or help shape the products/services I buy” Hype product access Fitness & nutrition certification Training on demand All access pass Free personalization 49% 66%
  13. 13. © GfK July 24, 2019 | GfK Personalization Paradox 13 Delivering personalization through consumer choice avoids some common pitfallsControl
  14. 14. © GfK July 24, 2019 | GfK Personalization Paradox 14© GfK July 24, 2019 | GfK Personalization Paradox 14 29% 33% Roper Reports Worldwide 2018 QE1/J1/M1, QB7; https://www.fastcompany.com/90344987/toms-made-buy-one-give-one-famous-now-its-updating-the-model Purchase decisions are not just about the product “I avoided a particular brand or store in past month because I disagree with the company’s values” Toms now lets customers choose a cause to support with their purchase Values “I will select one brand over another specifically because it supports a cause I believe in” “I only buy products or services that appeal to my beliefs, values or ideals”+6pt vs 2012 24%
  15. 15. © GfK July 24, 2019 | GfK Personalization Paradox 15 GfK FutureBuy® 2015-2018 Product curation is a glaring need on the simplification landscapeSimplification +8 pts since 2015 59% for Millennials 44% “There are too many choices in many of the categories that I shop”
  16. 16. © GfK July 24, 2019 | GfK Personalization Paradox 16 Effective personalization drafts on existing shopping behaviors Where you last used mobile device to shop? Online-offline divide is blurring GfK FutureBuy®, 2017 Mode Bringing the in-store beauty consultant to the digital age, deployed across e-commerce, in-store, mobile apps, voice, FB Messenger or WeChat +150% Conversion +18% Retention +35% Transaction Size 35% 65%
  17. 17. © GfK July 24, 2019 | GfK Personalization Paradox 17 GfK Consumer Life (Roper Reports®) US 2015 Spring Putting a “human face” on AI-powered tools reduces perceived threats “AI has the ability to be good, but comes with some inherent risks” Nike Fit scans feet & provides tailored shoe recommendations; in-store associates have this feature on mobile devices they use to assist customers Peace of mind “I’m increasingly skeptical of whether I can trust tech to do everything it’s supposed to do” 58% 59%
  18. 18. © GfK July 24, 2019 | GfK Personalization Paradox 18 Evaluate all programs with: “what consumer benefits are we delivering?” Put customers in the drivers seat Implications for your personalization executions STRESSSELF SHARING Programs adopt to existing shopper modes, not vice versa “You made my experience easier” is primary goal for each interaction Always hold consumer trust sacred Enrich customer relationships with new ‘sharing horizons’
  19. 19. © GfK July 24, 2019 | GfK Personalization Paradox 19 New horizons for personalization Personalized pricing New era of transparency Personalized brand identity Voice commerce
  20. 20. © GfK July 24, 2019 | GfK Personalization Paradox 20 GfK FutureBuyGfK Consumer Life A global data & insight service providing values, attitudes & behavioral insights in the US since 1973 and globally since 1997; the largest, longest-standing, and most robust study of its kind GfK FutureBuy® is the industry- standard source illuminating shopper attitudes and behaviors, covering 27 countries and 18 distinct product categories from CPG to durables
  21. 21. © GfK July 24, 2019 | GfK Personalization Paradox 21

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