Artificial intelligence (AI) has established itself as an essential tool for e-commerce companies to achieve effective hyper-personalization, even more so now, with the week of Black Friday. Infobip anticipates that its online sales in the United States will exceed $10 million. In addition, the company expects a 25% increase in SMS interactions on its platform, going from 1.3 billion in 2023 to more than 1.7 billion this year.
By analyzing browsing data, purchase history and consumer preferences, AI can predict behavior and anticipate customer needs, making it possible to offer product recommendations based on purchase history or send promotions tailored to individual preferences.
Hyperpersonalization: The key to a superior customer experience
Direct contact with brands through messages represents a valuable opportunity in terms of sales, as long as the interaction is appropriate. A recent Infobip study reveals that 74% of consumers perceive business messages as impersonal and dehumanizing, and 54% feel frustrated by the lack of personalization. This data underscores the importance of hyper-personalization in today’s environment.
The Infobip survey also shows that the perception and acceptance of hyperpersonalization varies by generation. Surprisingly, both baby boomers and Gen X have a positive attitude toward digital interactions, and many of these consumers are comfortable using chatbots and other automated channels. Although millennials and Generation Z are often thought to be the most dependent on digital, the study shows that all generations value a personalized experience and are willing to interact digitally with brands, although with some differences.
Protection of customer privacy and the difficult balance to avoid falling into intrusion are the main challenges of hyperpersonalization in electronic commerce
The objective of e-commerce and retailers in 2024 has been to attract demanding buyers who dominate the networks and who, in addition to being more tolerant, spend 25% more per year than buyers in physical stores. Up to 10% of baby boomers are very comfortable with online chats, and 23% of Gen X enjoy interacting with chatbots. For their part, 60% of millennials prefer to make purchases through chatbots.
Generation Z and millennials tend to be more critical and selective when shopping online, valuing personalization and interactive experiences with brands. Approximately 40% of millennials and 38% of Gen Z identify as “social shoppers,” meaning they seek an authentic and meaningful relationship with brands. Omnichannel communication is essential here, as it allows brands to communicate seamlessly and consistently with these consumers across multiple channels.
For baby boomers and Generation X, hyper-personalization is also attractive. Half of baby boomers are “social shoppers,” while 31% are “busy shoppers,” those seeking convenience and efficiency in their shopping. Generation X also shows a great interest in digital interactions, with 23% of its members showing an affinity towards chatbots. These results challenge traditional stereotypes that older consumers have low technology adoption and highlight the potential for hyper-personalization across generations.
Despite its advantages, hyper-personalization presents challenges. One of the main ones is the protection of customer privacy. Hyper-personalization relies heavily on the collection and analysis of personal data, raising concerns about data security and privacy. Companies must be transparent in how they handle this data and ensure they comply with current privacy regulations, such as the General Data Protection Regulation (GDPR) in Europe.
Another challenge is maintaining a balance between personalization and intrusion. Consumers may feel uncomfortable if they perceive that a brand knows too much about them. For this reason, companies must ensure that their personalization efforts are not excessive or invasive, and that they focus on adding value to the customer’s shopping experience.
