Dive Brief:
- Personalization can provide a healthy profit-boost, but a majority of companies are still struggling with the execution, according to a new study by Arm Treasure Data and Forbes that was provided to Marketing Dive. "The Clear Path to Personalization" study found that only 21% of enterprises described their personalization efforts as "highly successful" and had dedicated more than 10% of marketing budgets to it. Among this leading group, 54% said they surpassed their sales goals in the past year. Overall however, 59% of respondents said serious efforts on personalization are still a year away, with 41% seeing it as a high priority now.
- A healthy 40% indicated their efforts to personalize have helped maximize sales, basket size and profits in direct-to-consumer channels such as ecommerce. Moreover 25% of companies said they are now utilizing artificial intelligence at scale in their personalization efforts and see it as a crucial tool to do so.
- Respondents indicated that loyalty programs, mobile apps and product development are the areas that matter the most when it comes to customer personalization. Retailers were singled out as a leader in personalization, with 56% indicating a high commitment level, followed by 48% of consumer electronics, 38% of consumer packaged goods companies and 32% of media outlets.
Dive Insight:
Consumers are developing an appetite for customized digital content and products made with them in mind. L'Oreal recently announced a partnership with uBiome whereby consumers get their skin condition analyzed through a cheek swab and L'Oreal recommends products based on the individual’s needs. However, marketers are finding the data and tech tools required for this one-on-one service can be challenging to harness. There is also an ongoing discussion around data privacy and how much personal information most consumers will ultimately be willing to share for a customized product or loyalty program. This area could be a stumbling block for marketers, with a survey by ExpressVPN finding that a majority of U.S. consumers are concerned about how brands garner and utilize their personal data.
Still, the profit motivation and fear of losing out to a more progressive competitor continues to push development for personalization programs. Another study found that 93% of companies that had a personalization strategy increased their revenue last year. With driving results in mind, more marketers have been evaluating how they can utilize AI to develop customized digital content. The belief is it will save time and money, because for one thing you can get real time feedback on what is working and what it not, and immediately modify content.
Despite the promise of rewards, there is still a learning curve ahead for personalization strategies. Core issues facing marketers include data quality and data access, as well as change management, the Arm Treasure Data study pointed out. To gather the data, the researchers surveyed 200 marketing leaders and questioned them on their priorities, budget, programs, and how they measure their efforts.
