How Retailers Are Personalizing Shopping Experiences to Make Them Helpful, Not Scary

If you listen closely, you can hear holiday bells ringing in the distance as retailers begin to prepare for the peak holiday season. A key focus this year is how to navigate evolving consumer sentiment and still deliver value to cost-conscious shoppers. With many people already struggling with significant stressors, retailers should be looking for ways to make shopping frictionless. Could personalization be the answer?

About 70 percent of B2C retailers consider personalization an essential part of their e-commerce strategy, but it’s important to know what consumers think about these strategies. A recent Algolia consumer study of 1,000 U.S. adults revealed several key trends that show how retailers can be helpful, not creepy, when it comes to personalized experiences this peak season.

Is personalization scary or helpful?

Some 58 percent of consumers found personalized recommendations from a retailer to be intimidating, but that didn’t stop people from participating in the data-driven world of e-commerce. More than half (60 percent) of respondents bought an item they were directly looking for on a retailer’s site, while 37 percent bought an item that was recommended based on their shopping and browsing history.

Consequences for retailers

Consumers have a knowledge gap in how their data is being used by retailers. At the same time, personalization is only effective when it’s implemented, so it requires commitment to achieve helpful results. The key is for retailers to be transparent about their data collection practices and communicate how those insights will shape personalized recommendations.

To be helpful, be transparent

58% of consumers believe that consumers are more likely to share their browsing and purchasing activity with a retailer if they know that this information will help improve their e-commerce experience.

Digging deeper, the survey asked people what would make them more likely to share data with a retail site, and full transparency about how the data will be used topped the list (54 percent). Information about the retail site’s data security and privacy policies (35 percent) came in second, followed by incentives in the form of loyalty programs and benefits (29 percent).

Consequences for retailers

When planning for peak sales, retailers need to be upfront about how they’re using customer data to improve the shopping experience — and offering discounts, free samples or trials, or other perks can be an even better option for budget-conscious shoppers.

Consumers expect more from retailers

We can’t ignore the fact that some consumers are hesitant to share their data. Despite this, 59 percent of shoppers believe retailers could do more to increase personalization.

Respondents said they would be open to sharing the following information with a retailer’s website if it allowed them to experience a more personalized experience:

• their purchasing preferences based on what they select on the retailer’s website (49 percent);
• purchase history on the retailer’s website (33 percent);
• merchant website browsing history (31 percent); and
• direct opinions and reviews (22 percent).

The study 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 believe retailers already have something similar.

Consequences for retailers

Retailers have an opportunity to treat personalization more like a social media platform. Consumers are aware that their engagement often personalizes 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 control of their personalization journey by offering them ways to opt-in/opt-out of the information they want to disclose. This allows shoppers to provide feedback on future customized experiences in a privacy-focused way.

The holiday season is stressful for both retailers and consumers, but personalization can go a long way toward making the gift-giving process easier by providing people with relevant, tailored recommendations. Ahead of the peak holiday season, retailers should pay attention to what consumers are willing to reveal and change their digital ecosystem accordingly. Otherwise, they risk losing out on positive customer experiences 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 solutions that are incredibly fast and reliable.