Personalization Versus Privacy: Striking the Right Balance

We live in an age of duality when it comes to customer data. On the one hand we have a customer base which actively desires personalized services from the brands they choose to do business with. While, on the other hand, they have less trust than ever when it comes to companies using and protecting their data responsibly.

According to Gartner’s Customer Service and Support Survey, 71% of B2C and 86% of B2B customers expect companies to be well informed about their personal information during an interaction. However, there’s an inherent tension between personalization and privacy. As data-driven interactions become necessary for providing an effective customer experience (CX), customers also become alarmed by how their data is used.

This is reflected in the onslaught of regulations we have seen spring up around the globe. From the European Union’s GDPR to the California Consumer Privacy Act (CCPA), companies now have to face serious consequences – both in terms of public perception and regulatory penalties – if they fail to adequately protect the information they hold on their customers. Since 2018, there has been an increase of 1350% in state privacy laws with similar acts also covering Virginia, Colorado, Utah and Connecticut.

How then can the modern ecommerce brand make sure they are indeed striking the right balance between personalization and privacy, and what will this mean for the future of data in this industry?

The Big Question

We have always spoken as if providing a personalized experience requires the use of customer data. However, how often do we stop and consider whether this is actually the case or not? This is a question which will only become more pertinent when Google makes good on its promise to remove third-party cookie support from its Chrome browser – currently scheduled for 2024.

Consider the following quote from VP of Data and Platform Engineering for Guitar Center, Saritha Ivaturi:

"Personalization is actually rendering something that’s relevant to the user that the visitor can relate to,” she said. "I want to give you an experience that you will connect to and will resonate – and we can have a successful relationship together. In this digital world it is very, very important to give that personalized content, or relevant content to our consumers so they come here, they spend their valuable time on our websites, ecommerce, or retail stores.”

If you ask us – and, you’re reading this article, so we assume you do – nowhere in this quote does it suggest we need to use data to make that connection with the customer. Whilst we believe that first party information such as purchase history will play a role in providing personalized experiences in the future, it seems to us companies would be far better off returning to more traditional methods of getting to know their customers.

"Give them the experience that they are looking for. And that doesn’t mean really tracking and trailing our users and getting their personal identifiable information. It is basically knowing the intent of why they are here, what they are here for, and serving them relevantly,” continues Ivaturi.

Buyer Personas

Going back to the drawing board and creating buyer personas is a fantastic way to make sure you are creating offers and content which resonate with your desired audience. Get out there and carry out some good old-fashioned market research by asking people what they want from your brand and the kind of stories which would lead them to seek you out.

People are more than numbers on a screen. They have thoughts, feelings, and goals and it’s all these factors which guide them when making purchasing decisions. Whether the purchase is for something essential or frivolous, understanding your customers as people rather than data is going to be a key determinant of success in the cookieless future of ecommerce.

So, it would seem to us the answer to balancing privacy and personalization is to reduce our reliance on data – not eliminate it altogether – and focus on creating experiences which will resonate with our target audience and give the illusion of a personalized experience whilst in reality being quite wide ranging in their appeal. Think of the way people who pretend to be able to contact the dead use cold reading to achieve their performance and you’re on the right lines – although that’s where you want the comparison to end, especially from an ethical standpoint.

Final Thoughts

Balancing personalization and privacy has become infinitely more challenging in an increasingly restrictive and fraught environment of regulation and public opinion. However, by going back to basics and creating experiences which resonate with people, you can effectively walk that tightrope.

The eternal battle between privacy and personalization is sure to be part of the conversation at eTail Boston 2023, being held in August at the Sheraton Boston Hotel.

Download the agenda today for more information and insights.