CPG Trends 22 June 2022
Can personalization at scale improve consumer trust?
Recent articles in the CPG world have focused on the 'trend' of personalization as something consumers are interested in. But we wanted to interrogate this topic a little deeper. Not only as a marketing tactic, but to ask the question: what more might personalization offer for the consumer? Could this impact consumer trust? Sevendots Partners Monica Segard, Marco Aureggi, Miriam Mostarda, Andrea Bielli, Colin McAllister, Elisa Costa and Sam Bedi all gathered to discuss the role of personalization at scale.
7 minute read
Declining trust has been observed across many sectors including the CPG industry, impacting the relationship between consumers, companies, and brands. We know the value of trust, which can increase marketing efficiency and aid value perception, and potentially, loyalty.
Recent articles in the CPG world have focused on the ‘trend’ of personalization as something consumers are interested in. But we wanted to interrogate this topic a little deeper. Not only as a marketing tactic, but to ask the question: what more might personalization offer for the consumer? Could this impact consumer trust?
Sevendots Partners Monica Segard, Marco Aureggi, Miriam Mostarda, Andrea Bielli, Colin McAllister, Elisa Costa and Sam Bedi all gathered to discuss the role of personalization at scale. Here are several of our takeaways for brand owners to consider.
What we cover in this piece:
- Why look at personalization at scale?
- Understanding the limits of personalization
- Our perspective on personalization and consumer trust
- A challenge for brand owners
Why look at personalization at scale?
Despite scepticism that exists around the potential and possibility of delivering personalization at scale, we have found that 55% of Gen Z want brands to allow them to express their individuality through differentiated products and services. This is significant, especially in comparison to 36% of baby boomers who felt similarly. As the younger generation of consumers comes of age, it is increasingly important to consider how personalization might enhance the brand-consumer relationship.
Understanding the limits of personalization
1. Personalization should extend beyond communication
Personalization is about offering an individual interaction between a brand and that consumer, one that is tailored to that specific customer. Many articles on the subject already discuss using data to provide these tailored offerings. Partner Andrea Bielli adds:
‘Let’s see personalization in a broader way… it’s any opportunity for a singular brand and consumer interaction.’Andrea Bielli
This means including all forms of interaction can be an opportunity for brands, not just a tailored communication item or product.
‘Each individual has a unique solution.’Monica Segard
2. Personalization doesn’t negate performance, but performance alone is no longer sufficient
We’ve talked for a while about the value of intangibles. In relation to personalization, we can see that personalizing an offering doesn’t eliminate the need for performance, but there are intangible elements that must still be met. Personalization can be an opportunity in this regard:
‘There are hard and there are soft elements. The brand needs to perform consistently over time. That is the first thing that you expect from a brand – you want to trust a brand if it does what it’s supposed to do. But it’s not sufficient anymore to just work on the product performance. You also have to work on the soft elements. You can create affinity and from affinity you can generate favourability if a brand shares my values and talks to me in the way that I want to be spoken to… maybe if personalization is seen in that way, it is an enhancer of trust.’Colin McAllister
Transparency is increasingly important, particularly for younger consumers. Personalizing the interaction between a consumer and a brand may offer up opportunities to humanize a brand and help understand the other elements that go into the creation of its product.
‘If I want to be sure about the ingredients used [or] whether or not a brand is treating employees in a fair way, having a kind of open dialogue where you can answer a question from consumers can be important.’Andrea Bielli
Our perspective on personalization and consumer trust
1. The way personalization can impact trust varies across categories
Some categories will benefit from personalization of an offering, more than others will.
‘There are some categories where personalization probably is not needed or is needed in a different way. Let’s think about detergent for instance. I don’t think that offering me something that is perfectly fitting my clothes, if it does exist, could increase trust. However, I think that having trust in a detergent brand is extremely relevant…. The relationship between personalization and trust is not immediate and could differ category by category.Marco Aureggi
Sevendots Partner Colin McAllister gave the example of baked beans, versus cosmetics: we may not benefit much from a personalized baked bean offering, but the benefit potential from cosmetics – made to suit you and your needs as an individual – are much clearer.
‘Depending on the category, you require more personalization… if you’re in a detergent category, you’re not expecting personalization… [or] putting my name on a chocolate bar – that wouldn’t change my life. But if it is makeup or supplements or something health-related, that can be impactful.’Monica Segard
‘I think trust needs to be higher for those categories, where well-being and the body is involved, more than maybe other categories… when it’s the supplements or beauty, the fact that it is the right one for my age, my body, is important to create trust.’Miriam Mostarda
2. The CPG industry can learn from the approach of other industries
With more examples emerging across industries, what can CPG take from the approaches of other industries to personalizing their offering to consumers?
‘I think the service industry is good on [personalization]… We go travelling with our dog and it makes a difference when we arrive at the hotel and they put a little bowl for the dog and prepare for him.’Monica Segard
Part of this is about observing how other industries present relevant offers that reduce friction.
‘If Spotify gives me a tailored playlist to my taste, I really like it. I like to discover new music. If they have said in advance that this is how they’re going to use my data, I’m actually opting in because they’re eliminating friction. You’re providing me inspiration. I want that.’Elisa Costa
3. Authenticity precedes successful personalization
Authenticity plays a big role in understanding trust. It makes sense to observe the importance of an authentic form of personalizing a brand experience, as a necessary precursor to personalization done well.
‘Authenticity is always a key component to be measured to see why trust is high or low.’Marco Aureggi
Partner Miriam Mostarda emphasized the importance of using personalization in a way that feels authentic to the brand more broadly, rather than simply leading with the trend.
‘When I don’t perceive the authenticity from the company, I lose trust. And for me an excessive personalization and invasion of my boundaries would feel unauthentic, and therefore I would lose trust.’Miriam Mostarda
Personalization can thus be seen as a steppingstone on the way to building trust – it may not be the first lever to pull, nor is it always the last step before trust is created. Personalizing the brand experience can develop closeness:
‘Maybe from closeness then there’s trust. But if I’m not looking for it and you are not authentically offering it to me, then I would feel more distant.’Miriam Mostarda
Miriam has cautioned against overdoing it – having had excessive calls to engage with a brand can become annoying, and there needs to be a mutual interest rather than just a company interest. This harkens back to authenticity as key.
4. Accessing consumer data must provide clear value in return
Privacy concerns are key to consumers, and yet positive personalization depends on good data. Insufficient or incomplete data is a central concern for many who attempt personalization and is a concern for providing truly personalized offerings to consumers.
‘Personalization can be a bit of a double-edged weapon. You have the possibility to become closer to your customer and add value. However, if you don’t deliver – if you are not able to use the information you have wisely or if you are actually starting from inaccurate data – then you’re shutting a door.’Elisa Costa
What brands do with the data is then essential:
‘The majority of those who are asking for data are not really using it in order to create a better offer for you, but using it in order to sell more.’Marco Aureggi
It’s important to remember how to place the data in context – asking for consumer input can establish a better relationship from the outset for those who opt in, but this also places a demand on the potential relationship between brands and consumers. This is a pivotal turning point of trust, and this goes beyond data collection.
‘Of course, data is an important pillar for knowing the consumer and developing a more personalised service. But if we focus only on data, we lose the opportunity to act on other areas that may be easier to implement and more effective’.Andrea Bielli
Challenges for brand owners and marketers
1. Personalizing an offering must still be efficient, and balanced with addressing universal needs
Personalization could be used to better define the way we understand trust in a certain consumer segment, but there are limitations to personalizing an offering. Given the history of the CPG industry in studying mass populations and, in particular, defining universal needs, Partner Elisa Costa highlighted the potential, as well as the balancing act, required here:
‘Personalization could be like a shortcut to feel that you’re making somebody feel special and maybe you have to be careful on relying just on that personal element and stopping to ask, ‘But what do they all have in common?’ What they all have in common can have more impact… the opportunity person to personalize in a cost efficient manner is indeed an opportunity, but needs to be taken in a way that is adding value and obviously at a reasonable cost.’Elisa Costa
Overdoing it comes with a potential cost: alienating too many consumers.
‘Is there a danger in over-personalizing? Obviously, you can’t speak to an individual… [if you over personalize] you lose relevance to almost everyone in that endeavour.’Sam Bedi
Not to mention the cost element:
‘Personalization can be quite expensive. [Personalization] can always add trust but has to be done in a very correct, deep way, and at an efficient cost, that allows you to achieve a result.’Andrea Bielli
2. Nailing personalization for trust-building requires showing care
Personalizing a consumer experience isn’t the most direct or necessarily even the first lever when it comes to building consumer trust. However, it can be a powerful tool. But it must be used in a way that demonstrates care for the consumer.
‘Until now, access to data wasn’t necessarily strictly regulated. Without realising, your behaviour or your information could be tracked. Now, we’re trying to become more disciplined as an industry in general, and also in advertising. You involve the consumer to see if they want to share some data or not. Once they share data, you as a company have a responsibility to add value with this data. If you only use this data because you want better quality targeting or to address your message in different ways, then you don’t really deliver added value to consumer. This is where you can lose trust in a sense because you’re using my data but not to my benefit.’Elisa Costa
We hope this discussion provided you with a sense of the relationship between a personalized offering and consumer trust, adding depth to this marketing trend.