Why UK shoppers are being ‘let down’ by retailers’ ineffective use of data.

Why retailers are failing to embrace innovation with regards to customer data.

Retailers in the UK have not resolved the dilemma of what customer data to utilise and how to use it (according to recent research from the UK Cards Association) The report explored the consumer shopping experiences of over 4500 shoppers across eight different countries.

Despite, UK shoppers spending more per household than consumers in any other country, retailers are not taking advantage of utilising personalisation for existing customers and are not leveraging the benefits of in-store technology.

The research found that shoppers in the UK can become apathetic to retailers if they receive indifferent offers from them. 51% of shoppers surveyed indicated that they felt that the offers that were being sent from the retailers were not of value and 43% felt that if a retailer knew them well that they would look to offer them incentives and promotions for goods based on previous purchases and personal preferences.

Only 38% of shoppers felt that their personal data was being used effectively by retailers and 35% of the surveyed shoppers said that they believed that they are being asked to hand over ‘too much’ data. The research found that shoppers are more likely to provide personal information if they believed that the retailer has robust security measures in place with 61% indicating that this was a strong factor. 48% of the surveys recipients said that shoppers were willing to share their data if the retailer was both ‘socially responsible’ and ‘reputable’.

Shoppers remain very price driven and in turn for attaining a reduced price or suitable incentive, 39% of shoppers indicated that they would give away more personal data.

UK retailers need to capture data that is so vital for communicating effectively with their customers and to achieve this, they need to introduce innovative digital and in-store technology such as utilising digital checkouts that ask for personal data, beacons and location-based services to better improve their customer's shopping experience.

The survey demonstrated that there was still much work to be done with regards to in-store technology with 26% of participants surveyed saying that in-store technology didn’t work for them when they tried it. Only 17% of respondents maintained to have utilised a mobile wallet in a retailer’s physical store.

Nevertheless, shoppers have embraced the latest technologies to an extent – 22% said they have used interactive displays and would do so again. 26% commented that they would use their mobile phone to making upcoming purchases.

Loyalty-driven marketing is a key influencer and 64% of respondents indicated that they want to see retailers create added value services and loyalty programmes would be a good incentive. 33% would be swayed by exclusive offers when entering a retailer’s store.

Steven Skinner, SVP, retail and consumer goods consulting, Cognizant, says: “There is still a lot of room for retailers to use technology to their advantage. However, the research has shown that shoppers only see the value in the personalised relationship if the technology is actively enhancing their shopping experience and unfortunately, at present, it is not. For technologies such as AR, loyalty and mobile payments to be adapted in-store, retailers need to move quickly on their strategy today by gathering shopper insights to understand what their target market really wants. They need to prepare user-friendly applications and importantly, make sure their investments work and delight, instead of frustrating and turning off their shoppers. There is a big opportunity for those retailers that get this right."

“Furthermore, meeting the expectation of UK consumers means managing data effectively. Communicating what data is required and the benefits delivered in return will be vital to ensure shoppers are willing to share their personal data. By using technology and customer data effectively to offer real, tangible benefits to shoppers, retailers can boost engagement by curating to their consumers’ needs and interests. It will also allow them to reshape customer perceptions and relationships, and ultimately drive profits to win in the marketplace.”