Personalization Technology in 2024 Explained (+ Upcoming Trends)
Personalization significantly boosts user engagement by delivering content tailored to individual preferences.
Updated May 15, 2024.
Studies have shown that over 70% of customers expect personalized interactions and are likelier to finalize their purchases when provided with such customization.
As the world increasingly digitizes, personalization technology is swiftly becoming a key driver of revenue growth across various sectors, including eCommerce, marketing, education, and entertainment. This technology uses data to create the ultimate personalization experience for your shoppers, meaningfully helping businesses connect with customers to provide tailored experiences.
Meet the Expert
Jameela Ghann is an eCommerce and marketing expert with more than 10 years of experience. Apart from running her own successful online store, Alora Boutique, she's the marketing manager of Fera.ai.
Personalization Technology in eCommerce
Personalization technology in eCommerce refers to the use of data to create unique user experiences. This can be compared to crafting a tailor-made gift or addressing a wedding invitation by hand. Brands use this technology by collecting and analyzing data related to consumer identity and behavior, such as:
- Demographics (age, nationality, etc.)
- Past purchases
- Browsing history
- Preferences
Personalization technology significantly enhances user engagement across various platforms. Social media algorithms, for instance, push content tailored to individual preferences, and websites encourage user participation by offering personalized product recommendations or quizzes, prolonging the time spent on the site and potentially increasing spending.
Moreover, personalization simplifies customer decision-making, offering them tailored options that increase purchase likelihood. It also boosts brand perception by fostering customer satisfaction and ensuring they feel valued and understood.
Leveraging Data Through Machine Learning
Collecting the right data allows you to better segment your audience and showcase the right products and information to the right customers at the right time.
Data collection for personalization involves explicit and implicit data. Explicit data includes information willingly provided by users, like:
- Survey and questionnaire responses
- Account registration information (name, email, demography)
- Preferences stated during sign-ups (e.g., newsletter topics)
- Feedback provided through customer service interactions
Implicit data, on the other hand, encompasses:
- Purchase history and patterns
- Page view analytics on a website
- Time spent on specific content or pages
- Engagement metrics with emails or social media posts (e.g., opens or clicks)
Machine learning and AI are essential for interpreting and utilizing this data effectively. Algorithms play a key role in streamlining the analysis process to understand user intent, audience segments, and behavior. Tools like Fast Simon or Fera.ai leverage machine learning to segment customers based on available data, enabling content customization that facilitates upsells, cross-sells, and streamlined site merchandising that's unique to everyone.
Pro tip: Utilizing AI and machine learning may be crucial for effective personalization, but you shouldn't stop there. Conduct regular A/B testing to help you fine-tune strategies and ensure optimal customer experiences.
Don't Forget About Omnichannel Personalization
Predictive personalization should extend beyond websites to create a seamless omnichannel experience across various touchpoints, including email, social media, and even physical stores.
For example, location-based services enable personalized discounts and offers, enhancing the overall customer experience. Smaller and mid-sized businesses increasingly adopt multi-channel merchandising and personalization to gain a holistic view of their customers. Just remember to ensure ethical and legal compliance per region, keeping the following in mind:
- Transparency over how you collect and utilize data
- The ability for customers to refuse to have their data collected
- Regional law compliance
» Learn more: Creating an omnichannel strategy for your business
Personalization Examples Beyond eCommerce
Personalization is becoming so prevalent in modern sales and marketing practices that it extends far beyond eCommerce into almost every industry that has a vendor-consumer relationship.
Duolingo
For instance, Duolingo, an online language learning platform, uses adaptive lessons to cater to individual learning styles. When a user breezes through lessons, Duolingo adjusts the difficulty level to keep users stimulated.
Coursera
In addition, platforms like Coursera make course recommendations based on the user's interests.
Netflix
Streaming services like Netflix also employ personalization technology to suggest shows and movies based on the viewer's preferences.
Flix Health
Even in medicine, personalization plays a significant part as health groups like Flix Health, a Canadian company led by a biomedical technology PhD holder, use machine learning to personalize medicine.
Remember that caution is necessary when using personalization tools—An AI chatbot error led to a legal case, where Air Canada faced consequences for providing incorrect information regarding bereavement discounts. The AI hallucinated an answer and ended up costing the airline almost $1,000 after it was taken to court.
Looking Ahead: Personalization Trends in 2024
In 2024, the landscape of personalization is set to greatly evolve, thanks to significant advancements in artificial intelligence (AI) and machine learning, coupled with strides in processing chips and data analysis capabilities. These improvements are expected to lower the costs associated with AI, enabling more precise personalization techniques available for businesses of all sizes.
This development opens up opportunities for hyper-personalized, real-time interactions that feel specially customized for each user. It goes beyond traditional recommendations that are based on past behaviors and incorporates dynamic factors like location, time, and ongoing localized events.
The concept of contextual awareness is central to these advancements. As technology becomes more adept at interpreting various contexts—considering not just who the user is, but where they are and what they're doing—personalization can be incredibly nuanced.
Example: Consider a fitness app that adapts workout recommendations based on your goals, the weather, and your location. For example, it might suggest an outdoor run in a nearby park on a sunny day or a home-based workout when it's raining, providing you with the best possible unique advice in all situations.
» Personalize the customer experience by enhancing your site search functionality
The Power of Personalization
Personalization technology has the potential to revolutionize the business landscape by fostering deeper connections with customers, reducing cart abandonment, enhancing user engagement, and boosting conversions and sales. Whether a small eCommerce owner or a multinational corporation, understanding and harnessing this technology can give your business a competitive edge in the digital age. The future of personalization looks promising, and those who adapt quickly to this trend of AI-powered technologies are likely to thrive in the coming years.
