ChoiceStream

Executive Summary

The annual ChoiceStream Personalization Survey measures consumers' interest in and perceptions of personalization and product recommendations. The findings for the 2009 survey are reported in two parts. Part two of this year's findings are below. (Part one may be found here.)

1. Retailers are missing the mark with product recommendations as this year's survey finds a significant decrease in the quality of e-commerce product recommendations compared to last year.
2. Not all product recommendations are created equal in that recommendation quality varies widely between different retail categories.
3. Surprisingly large numbers of shoppers are aware that publishers share data with online retailers to personalize the content of display ads; most consumers have concerns about it.

Detail on these findings appears below.

Key Findings Detail

Retailers Are Missing the Mark on Product Recommendations

According to the 2009 survey, the quality of product recommendations on retailers' sites declined 31 percent year over year with many more shoppers reporting that they received poor quality recommendations in 2009 versus 2008.

When asked how recommendations failed to live up to their expectations, shoppers provide a variety of reasons, the most popular of which is that the recommendations were unrelated to what the shopper was looking for.

It is our belief that the cause for this decline is due in large part to the influx of new recommendation providers who are now entering the market in an attempt to capitalize on retailers' demands for recommendations. This has increased the availability of product recommendations but has decreased recommendation quality as new vendors lack the in-market experience to create good quality recommendations.

Not All Recommendations Are Created Equal

The 2009 survey asks shoppers to rate the quality of product recommendations across 10 retail categories. On average, only 17 percent of shoppers rate retailers' recommendations as ‘excellent,' which is not surprising given the number of consumers reporting poor quality recommendations.

What is telling in the results is the large discrepancy in recommendation quality between retail categories. The top retail category, music and entertainment, was 50 percent more likely to receive an excellent rating than the bottom-ranked category.

This finding highlights for retailers the importance of working with solution providers who understand category-specific shopping behaviors and can factor them into their recommendation strategy.

Shoppers Know Retailers Are Watching Them

Overwhelmingly, consumers report that they are aware that publishers share information about their demographics and online click behavior with retailers to help retailers target ads. 74 percent claim to know that this takes place. And, 83 percent of those shoppers express concern about the practice. The biggest concerns are that retailers might share their data with other retailers that the shopper doesn't know or trust, or that their data might not be secure.

Survey Respondent Overview

The survey was conducted by MarketTools, Inc., a leading online market research solution provider. The survey respondents included 525 adult, U.S.-resident Internet users across four age categories (18-24, 25-34, 35-49, 50+). The respondents were 49 percent male and 51 percent female; and, 98 percent had made at least one online purchase within the previous six months.