UK shopping experiences let down by retailers’ ineffective use of data, Cognizant shows

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Research from Cognizant reveals that retailers have not resolved the dilemma of what customer data to use and how. Although a recent report by the UK Cards Association suggests that online shoppers in the UK spend more per household than consumers in any other country, retailers are unable to reap the full benefits of personalisation as existing customer data is not fully used to their advantage, mixed with in-store technology that is still not living up to its full potential. The research of 1,000 UK shoppers is part of a wider global study involving a total of 4,500 shoppers across eight countries that explored consumer shopping experiences.

Shoppers let down by data driven insights

The research found that UK shoppers can become indifferent to retailers if they receive irrelevant offers from them. Only 38% of shoppers believe that retailers actually use their data effectively, while 51% say that the offers they receive do not offer value, with 56% claiming the products are not relevant. Almost half of UK shoppers surveyed (43%) think that retailers know them well if they offer promotions for similar goods based on past purchases and personal preferences, as well as through their preferred communication channels (39%).

However, getting hold of personal data can be a challenge for retailers as 35% of UK shoppers think that they are asked to hand over too much personal data. With increasing regulations in the future through GDPR (General Data Protection Regulation) this will continue to be a challenge, but it is not impossible. The research found that shoppers are more likely to share personal information if they believe the retailer has robust security measures in place (61%) and is reputable and socially responsible (48%). And as price is usually king in the retail experience, 39% of respondents said they would give away more data to get a good deal.

In-store experiences are falling short

The next step is to secure this rich data. UK retailers are continuing to innovate and introduce new online and in-store technologies, such as beacons, digital check-outs that ask for personal data and location-based services to improve the customer experience. However, the study found that shoppers’ use of in-store technology is still low. Only 17% of respondents claim to have used a mobile-wallet in store, with 26% saying that in-store technology does not work properly.

However, shoppers have not turned their back on new technologies completely. Twenty-two percent say they would use interactive displays again, 12% plan to use augmented reality (AR) in the future and 26% say they will use their mobile phone to make upcoming purchases. UK shoppers also want to see retailers create added value services, such as loyalty programmes (64%) and special offers when entering a store (33%).

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.”