Personalisation: The future of consumerism or victim of data protection?
An exploration of how personalisation is driving profits across industries, the balance between tailored customer experiences and data privacy, and what the future holds as regulations tighten.
Personalisation: The future of consumerism or victim of data protection?
Personalisation customises experiences, offers, services and interactions customers have with brands to help build deeper connections with them.
Done well, personalisation can help a business create a more targeted and engaging experience, service, or product to their customers by leveraging data and analytics. This enables companies to communicate new products, updates, and information to consumers in a way that increases engagement. It also improves the understanding of consumer desires and demands so they develop and deliver more enticing products.
Done poorly, it can feel overbearing and unnerving, pushing customers to distance themselves, change their data settings or delete apps/accounts altogether.
Personalisation is driving profits across every industry, leading to companies looking to make hires in the personalisation sector (from devs to product leads and project managers).
What is personalisation?
Personalisation is the use of historical data of a customer to curate their experience on a platform, making it more customised. When you open an app, it greets you by your name, shows you recommendations based on past purchases and offers you discount on that product you’ve been on the fence about. Consumers generally fall into 3 categories: they love it and base most purchases off it; they barely notice it; they feel spied upon and vehemently dislike it.
“91% of consumers are more likely to shop with brands that recognise them” and “83% of consumers are willing to share their data to enable a personalised experience.”
How do companies create a personalised experience?
The answer is DATA. Ecommerce brands have developed tools and systems that analyse structured and unstructured data to then create algorithms that identify the behavioural patterns and customer habits.
Examples across industries:
- EdTech: ensuring students have a personalised user experience when they log onto the platform which is determined by their data such as school year, topics of study and what they have previously learnt.
- Streaming: media companies are using personalisation tech and recommendation algorithms to suggest content to customers based on their search and viewing history.
- Insurance: they are using personalisation tech to create targeted marketing campaigns to specific customer segments to cross sell and upsell other products in their portfolio.
Customers now expect organisations to know them, understand them, and offer the right solution to their needs. Customers demand hyper-personalisation by engaging them through the correct channels, with the right messaging, at the right time.
Ensuring a seamless, cross-device personalised experience is arguably the ultimate personalisation tactic, especially as half of all online shopping activities begin on one device and finish on another. For example, a customer might see a recommendation for a product on the app, based on previous purchases, send it to a friend or make a mental note for later and then order the product by logging in online on their computer.
Getting the balance right
Customers are willing to share their data with brands they trust and fundamentally like, so it’s important not to break that trust.
However, there is a fine line, and taking personalisation too far can become unnerving for customers and create a negative brand image, causing customers to use the product less.
Every day, we are bombarded with things we ‘might’ like because we brought X, or because other people brought Y, and it creates an echo-chamber of recommendations which can be fairly limiting. Recommender systems can suffer from a lack of diversity, as they tend to just recommend similar items or content to users with similar tastes, which can limit a user’s exposure to new and diverse content. For under-represented groups this can be problematic, as their interests, views or preferences may not be reflected in the recommendations they receive.
The Future of Personalisation
Overall, personalisation is seeing huge strides across both mobile apps and web applications — and across all industries. It’s clear that businesses will (and must) continue to invest in technologies that simplify the personalisation process.
It’s important to keep an eye on the development of personalisation, especially as security demands and legislation continues to scrutinise the gathering, storing and usage of personal/behavioural data. This becomes even more prevalent with the introduction of AI, taking data analysis away from the human eye completely. In fact, more than a quarter of consumers have noticed less targeted personalisation over the last year, which can likely be credited to increasing data privacy regulations. Especially with the launch of Apple’s option to opt-out of web and app tracking.
The irony remains: how can we move so far ahead, technologically, while moving backwards in our ability to really know and target our customers?
Are you looking for senior appointments to develop your personalisation offering or have a project approaching? Get in touch with Lauren.