Accenture says more businesses will personalize experiences based on online interests

Do you find it creepy or helpful when online retailers such as Amazon suggest future purchases based on your buying or browsing history?

Whichever way you feel, get ready for a lot more digital marketing and personalization as retailers and service providers work to capitalize on its potential.

"Companies have been using digital-demographic research in big and small ways for 15 years, but it's going to get more disruptive in the next three years," said Lori Zumwinkle, managing director for the retail products group at Accenture, a technology consulting firm.

In a 2019 survey of 100 business leaders in each of 11 markets, including the Twin Cities, Accenture helped businesses understand how they can unlock new opportunities by examining the trail of digital crumbs consumers leave online.

Digital marketing goes far beyond knowing a person's ZIP code, income and address.

Hotel chains, for example, will be able to create an individualized experience for guests. They can have the guest's favorite music playing and favorite foods in the minibar when they arrive in their room.

In another example, a Nordstrom customer whose favorite brand is Free People could see those items pop up when she goes to the website.

Twin Cities business leaders from the survey showed a faster pace of adopting digital demographics than many others, which included Atlanta, Boston, Chicago, Dallas, Houston, New York City, San Francisco and Seattle.

"The Twin Cities businesses are often early adopters," Zumwinkle said. "With companies like Cargill, 3M, Best Buy and Target, they're further ahead because they adjust the data and leverage it."

The Twin Cities and Boston scored the lowest in the percentage of business leaders who expect big changes in their digital-demographics adoption in the next two years, but Accenture attributes that those cities are already ahead of the curve.

While traditional retailers such as Target and Best Buy use digital demographics, the survey showed that it's filtering down to hospitality, financial services, supermarkets and transportation. If a customer makes repeat Uber trips to and from similar destinations, it can populate that. Likewise, online supermarket shoppers should be seeing items they buy repeatedly pop up automatically with each new order, such as bananas, salad greens and ground beef.

When do companies start crossing the line into creepy? Zumwinkle said anything that might have to do with consumers' medical history or their children crosses a line. But every consumer has a different tolerance. Some find that personalization makes them feel special, where others consider it an invasion of privacy. One in five consumers said they would switch to a competing brand if the personalization process grew too personal. Still, nearly half of consumers said they have purchased a product or service they weren't planning on buying before they received a personalized pitch from a company.

A deeper dive into the numbers shows that consumers are conflicted about personalization. About 60 percent of them want to buy goods and services from companies that reflect their personal values and beliefs. But consumers are even split on companies publicly taking a stand on social, cultural, environmental and political issues. Half of Americans want companies to do so but the other half question it.

As digital solidifies into a business' core technology, some say we're now living in a post-digital world. "On the contrary," said Paul Daugherty, Accenture's chief technology and information officer. "We're posing a new question: As all organizations develop their digital competency, what will set you apart? Leaders must recognize that human values, such as trust and responsibility, are not just buzzwords, but critical enablers of their success."

Nearly 80 percent of Twin Cities business leaders surveyed see digital demographics as a more powerful way to understand their company's customers. Leaders across the country believe that the amount of data they manage about their customer will increase significantly or exponentially in the next two years.

"Digital benefits the consumer and the company," said Zumwinkle. "It simplifies people's lives and saves them time and is more cost-effective for the company."

John Ewoldt • 612-673-7633