What is personalization (and why does it matter?)

Personalization means providing customers with an experience that is specifically tailored to their individual tastes or requirements. It goes beyond simply mentioning a customer’s name in an email or instant message (although that is still important). It also means knowing about a customer’s digital habits, geographical location, and more. Then, taking that data and using it to contextualize content, product offers, and more to each person.

Companies need to get personalization right because it keeps customers happy and less likely to leave and because they frequently expect it from their favorite brands. Gartner research shows that 71% of B2C and 86% of B2B customers expect companies to be well-informed about their personal details during any interaction.

After all, customers provide brands with so much data these days that the least they can do in return is use it correctly. Because personalization matters so much, brands need to be aware of the trends that can shape their strategy.

Read More: Ecommerce Personalization Trends

8 personalization trends you need to know for 2023

1. Growing demand for personalization

The first trend we need to consider is the growing demand for customer personalization. Data from McKinsey indicates that 76% of customers will get frustrated with a brand if they don’t find a personalized experience.

Essentially personalization can no longer be an afterthought as consumers will simply move onto a competitor that can provide them with what they’re looking for. However, if brands are able to get personalization right, then it bodes well for the longevity of their customer relationships.

According to Segment’s 2022 State of Personalization report, 49% of customers will become repeat buyers if they get a personalized shopping experience from a brand. The consequent improvements in customer loyalty can have positive knock-on effects on the bottom line.

How to prepare

Ensure that personalization is part of your content strategy and that your content teams have access to the right data to improve the customer experience. Leveraging a DXP that connects analytics tools and CRM systems to your CMS helps you to provide the right content at the right time to personalize the customer experience.

2. Cookies and data privacy

By 2025, 75% of the world’s population will have its personal information covered by modern privacy regulations. This is something that companies aiming to double down on personalization will need to be aware of, as it will impact how they can collect data and what they can do with it once they have it. Several privacy regulations, such as GDPR and CCPA, have already been implemented to give customers more control over their data and how brands use it.

Customers want brands to personalize their digital experience, but they also don’t fully trust that every business will be able to keep their personal data safe from security breaches. With Google set to end support for third-party cookies by 2024, brands will also need to find new ways to get data to personalize content for customers.

How to prepare

Ensure that data security measures are put in place to handle customer data. Start gathering zero-party and first-party data instead of third-party data and use that data to personalize digital experiences.

3. AI recommendations

Artificial intelligence is a key component of any personalized experience for customers. Several software solutions leverage AI to improve customer interactions. When it comes to personalization, brands need to be aware of the power of AI, particularly regarding product recommendations.

This works not just for purchase history but also images. Brands can leverage AI to analyze the colors, patterns, and unique styles in different product images and then use the data of those images to identify what appeals most to a customer.

How to prepare

Take advantage of AI tools and leverage machine learning to provide recommendations to customers based on data you already have about them. This doesn’t need to be limited to eCommerce stores either but could also include push notifications based on browsing history, previous content viewed, and more.

4. AI chatbots

Another trend involving artificial intelligence applications is the use of AI-powered chatbots. Using concepts such as conversational marketing (having a dialogue with website visitors), chatbots can respond appropriately to customer intent and deliver a personalized experience when they’re browsing.

Customers searching for a particular product or piece of information could ask a chatbot a question and receive a real-time response tailored specifically to them.

How to prepare

Consider implementing chatbots on your website with a database of answers to the most frequently asked questions from your sales team. These FAQ answers can provide the initial response that saves your customers time and moves them further through their customer journey much faster.

5. More mobile-first experiences

Personalization has long been a focus area for the web. However, the days of desktops and laptops being the only way people access the internet, shop online, and more are long gone. By 2026, it is estimated that there will be 7.5 billion smartphone subscriptions worldwide. With the growing importance of smartphones, brands will need to switch their personalization strategies from only considering mobile as one of many channels to the first channel where personalized experiences need to occur.

How to prepare

Ensure that your company can leverage location-based personalization, push notifications about relevant content or product specials, and other steps that focus primarily on the mobile experience. Focusing on these mobile-first experiences enables brands to cater to a large number of customers and also gain more data to eventually create an omnichannel personalization strategy.

6. 1:1 Personalization

Personalization often includes segmenting customers into different groups and giving a somewhat generalized experience to each group. However, a trend that will continue to grow is 1:1 personalization, where brands deliver a unique experience to each customer. To accomplish this, brands need access to tons of customer data.

How to prepare

A good way to accomplish 1:1 personalization is via email marketing. By connecting the right data and deeply understanding their preferences, brands can provide specially tailored offers and recommendations directly to individual customers.

7. Omnichannel personalization

Going a step further than 1:1 personalization is omnichannel personalization. Instead of providing a 1:1 experience on one channel, brands will need to provide that experience across channels. This seamless connection of personalized content will see brands need to not just recognize customers in their inbox or when they visit a website from their desktop but when they visit that same website on a mobile device or another channel.

As part of omnichannel personalization, brands will also need to look at personalizing content throughout the customer journey and not just at specific touchpoints within it. For example, the journey from desktop to mobile device, to social media page to an email inbox, and then to purchasing on the website will need to be personalized in an omnichannel way.

How to prepare

Companies can leverage omnichannel personalization by allowing customers to create profiles that store all of their relevant data. This way, they can log in to these profiles on their computer, smartphone, or even while flying on a plane, enabling companies to deliver content they already know will be enjoyed.

8. Performant personalization at scale

On a more technical side, brands will have to look into designing effective architectures to allow for growing personalization needs, while maintaining the ability to provide consistent experience irrespective of end user location, service peak users effectively, and achieve minimum latency.

Most DXPs drive personalization by using either client-side or server-side personalization. Both approaches have their pros and cons, and thanks to technological advances, the best of both approaches can be combined to achieve a next-generation solution architecture that makes the experience as smooth as possible.

How to prepare

Design a solution architecture that brings the rules execution closer to the end-user as much as possible and nothing is better than a CDN (content delivery network) to achieve that. Learn more in our white paper Performant Personalization: Delivering Blazingly Fast Personalized Experiences at Scale.

9. Metaverse

One last trend that companies will need to pay attention to is the growth of the metaverse. While we may still be a few years away from widespread adoption, it could continue to grow as a viable channel for delivering digital experiences. Consequently, personalization will also need to be extended to this new channel; otherwise, brands could risk alienating some customers by not meeting them on the channels they frequent.

How to prepare

Understand that the metaverse is another potential channel for delivering personalized content experiences to customers. Ensure that you are leveraging technology, such as a headless CMS, that enables you to provide content to these digital touchpoints, as well as new and emerging channels that have not been established yet.