In a high-stakes paradox for retailers, customers are demanding deep personalisation, yet they punish brands that they perceive as violating their privacy.

Getting this wrong isn’t just a marketing misstep; it’s a direct threat to the bottom line. But for the few who get it right, it’s a powerful driver of new revenue and unbreakable loyalty.

“If you’re sending out marketing communications or pushing out paid media activations or email marketing, and it’s not relevant to the customer, you may be doing more damage than good,” explains Michael Dunlop, head of commercial Japac at Rokt.

Third-party research commissioned by Rokt with Harris Poll shows that 74 per cent of customers would prefer not to receive an offer than one that isn’t relevant to them, a percentage that has been growing over time. This shows consumers want personalised experiences, but it detracts from the brand if you’re sending offers that are not relevant. 

“But on the flip side, 62 per cent of customers prefer to shop with brands that are providing relevant recommendations,” says Dunlop. “So, you have customers that are dissatisfied with brands that are not using the data for recommendations, and then you’ve got this segment of customers saying, ‘Give me recommendations and I’ll buy more from you’.

“The more tailored that you can get your messaging, the better the consumer experience,” he says. 

Dunlop was talking with Inside Retail’s Amie Larter for an episode of the podcast Retail Untangled.

He says many retailers are sitting on a treasure trove of first-party customer data, but really struggle to leverage its potential in a meaningful way. 

Brands are generally good at collecting data, which they have been doing for the past 15 to 20 years, and it’s stored in a data warehouse somewhere. Typically, that is really impactful and valuable data covering purchasing behaviour, family makeup, spending habits, and a range of other factors. 

“The challenge is typically twofold: How easy is it for the marketing and loyalty teams to access it, and how can they use that in their customer communications, on their dot-com sites, social media, and email, for example?”

Some Australian brands are winning market share because, by getting this right, says Dunlop, citing beauty retailer Mecca and its Mecca Beauty Loop personalised skincare routines as an example. “They have gender, skin tone-specific marketing that transpires across all of your experiences with Mecca, and you’re seeing them win market share on the back of that.”

Other brands, like The Iconic, have a good activation layer, which allows them to personalise their homepage. For example, if you are male and you’ve bought jeans before, recommend other products that are similar or complement past purchases in your email marketing program. 

Dunlop does not believe that consumers are as privacy-centric as many industry professionals fear, arguing that brands commonly win sales when they deliver personalisation with a clear value exchange. 

“We talk about this concept of value exchange. If a customer provides you with data, you should use it to deliver exceptional experiences. Mecca and The Iconic are perfect examples of this. 

“You also see this in non-retail categories. For example, why is everyone so addicted to Spotify? It’s because it provides personalised recommendations through Discover Weekly. It’s a personalised, tailored experience. They know what customers listen to, who they are, and what their friends are listening to,” he continues.  

“You also see it with Amazon, which wins market share because it has one of the largest catalogues globally, and it offers fast and reliable shipping. But at the core of it, Amazon drives personalised recommendations tailored to you. So that friction that you see between customer privacy and then personalisation, the crux of it is really to make sure you are using the data to drive value.”

Put simply, customers will go to brands with better experiences, Dunlop asserts.

How the payments page can be an opportunity, not a cost 

Dunlop also highlights an opportunity for retailers on the payments page, which 99 per cent of retailers typically view as a cost centre, as they are paying merchant fees to PayPal, digital wallets, or card processors. Now, there is a growing trend of payment solutions providers competing for business, offering retailers’ customers special offers, or even targeting the retailer’s entire audience. 

“You’ll see MasterCard, Visa and PayPal, do it often. It’s a short-term monetisation for the retailer, with a non-dynamic static banner run,” says Dunlop. 

“We have seen a lot of growth on our side, which is turning that into a dynamic customer-first placement, around how you can take the data from the past payment behaviour, their relationship with that particular merchant or payment provider, and determining whether to serve or not serve those placements and creating a competitive marketplace.”

As a retailer, you can be talking to all the big banks, networks, and digital wallets, having them all compete to serve your customers. “That creates a hell of a lot more value for retailers than right now… To be able to create something that is completely dynamic is better for the customer, and it is also better for the bottom line.”

• Listen to the podcast to hear Dunlop talk more on the best opportunities for retailers to unlock incremental sales from a growth or impact perspective, why some brands are moving marketing channels away from Google and Meta, and how the use of retail media is evolving.