If you’ve read my more recent blogs, you’ll know I’m a fervent advocate of personalization in products and services. I strongly believe that this will not only give the consumer what they want, but also create new revenue opportunities for brands, and increase customer acquisition and loyalty.

Personalization through converging physical & digital technologies

It was great to share my enthusiasm – plus experiences, insights and ambitions – with influential industry players Stefan Biel and Valentin Langen on the ‘personalization panel’ I hosted last month as part of the Personalized Beauty Global Series. As Innovation Director of Beiersdorf and Founder & Managing Director of Ioniq Skincare respectively, both are very active in the opportunities personalization represents for their sector – and together we explored the topic across their sector and more broadly across the wider CPG space to travel and healthcare...

We all know that the personalization trend is definitely not new. Customization in the factory has been around for a long time; for example when you buy a new car or even sneakers and are able to select colors, finishes and so on. Today there are increasing opportunities to connect more with the consumer and enable product selection and customization in retail, and even in the home. The panel discussion focused on ‘what’s next’ for personalization and how this can be brought closer to the consumer.

No ‘one-size-fits-all’ for personalization

As you think about what your business should do about the personalization trend, in all cases, it’s vital to think about what’s right for your business, your consumers, your category and your products. When it comes to personalization, one-size-fits-all is a contradiction in terms. For example, let’s think about the different consumer drivers. We hear a lot that consumers want to be treated as individuals, to feel special and be catered to accordingly. But on the flip side consumers also want to have a sense of belonging as part of a group.

We also know that consumers have a desire to express their individuality, but then they also want convenience… yes, consumers are complex and often contradictory. The crucial point here is to figure out the right blend to create an approach to personalization that makes sense for your business. For example, take sports and fitness. We are now all very used to the idea of using wearable technology to help us measure our performance and personalize a training program. It’s likely the individual will also want to share their stats to be able to compete and be part of a community. Compared to a healthcare context, they won’t want to broadcast these individual results – but very probably want to know where they sit in relation to the general population. The answer is to create a product and service with just the right mix for your target consumers and your business – a truism that works across all markets and product categories.

Valentin Langen picked up on this theme, looking inwards to describe his motivations as a consumer to underline the importance of personalization. An unpleasant brand experience, he said, can have a lasting detrimental effect. But a product or service that reflects individualism will be positively received. The key is the relatively recent ability to capture personal data on users – allowing industry to create individualized experiences accordingly.

Stefan Biel added a practical commercial angle. As with most large companies in every market in consumer goods the business grows with the economies of scale. This drives market research to discover the preferences of the average consumer. But here’s the rub – no-one wants to be or sees themselves as average. We live in a world where Instagram allows you to feel unique and special every second. Everyone is now searching for solutions that reflects them personally.

The multi-national consumer products companies need to adapt but they also need to be profitable. He also stressed the positive effect personalized products and services can have on the company responsible for creating them. Developing products for the average consumer is certainly not as sexy and exciting as creating something that makes people feel special and engaged with what the brand can deliver for them as an individual.

Technology for personalization 

Moderator Richard Kestenbaum of Triangle Capital pressed the panel to reveal the technologies that would deliver on the promise of personalization. I was unequivocal in saying that the availability of technology is certainly not what is holding us back.

There’s a plethora of enabling technology that is now available – whether that’s the hardware components that are getting ever cheaper, or machine learning that’s getting ever smarter to extract insights from collected data. It’s also worth remembering that there’s a growing technology infrastructure around the consumer that innovators can piggyback on. The smartphone, which continues to get ever more powerful, is the obvious example.

We now have many ways to understand the consumer, from direct body measurements like biometrics or optical sensors to indirect measurement involving aspects such as context. Where somebody is, what the time of day is, or what the weather is right now can all be used to build a rich picture of the consumer and their context.

We mustn’t forget, of course, that we can ask the consumers direct questions. This produces vast amounts of information that can be combined with machine learning to extract further, even more valuable, insights.

Techniques such as digital twins have been used for a while in other industries but can be applied really well to help us model rich representations of individual consumers that adapt over time. Also there are emerging bioinnovation directions that could enable us to personalize a skin treatment based on someone’s microbiome.

Stefan agreed that there were plenty of ways to get under the skin of the consumer as an individual. For him, the most important point is that we must be extracting insight while providing a joyful experience. It’s vital that the consumer feels rewarded by the time invested. In all cases, whether data is sourced directly or without an interaction that the consumer is aware of, the process should be easy and effortless.

Balancing data and privacy 

Richard raised the conundrum of balancing capturing data about consumers with the concerns on privacy. For Stefan, consumers who are looking for personalization understand that this is the benefit they receive for the price of offering their information. Many will feel that if they share more data and provide more information, they will get better products and experiences in return and they are comfortable with the tradeoff.

Valentin warned of the dangers of privacy breaches to a brand, citing notorious examples involving banks, consumer electronics brands and social media platforms. He advocated an industry-wide, rather than company-by-company approach. He sees opportunities for privacy and security specialists to create ‘digital egos’ of consumers that they can provide to companies offering personalized products and services, so that is the data remains in the consumer ownership but accessed by the brand.

I added that it’s important to acknowledge the difference between perception and reality… you could design a super-secure, super-private system, but if consumers don’t perceive it to be so they won’t engage with it. Another point: there’s no need to reinvent the wheel here. There is plenty happening in the world of data privacy and digital security that can be leveraged as we develop successful personalization systems.

We went on to talk about the challenges to getting started and shared some tips from our range of experiences. You can watch the panel session on demand here. I’d love to know your views on personalization and to chat further so get in touch! We’re at the Personalized Beauty Global Summit on November 18-19, so if you’re attending also then that could be a good time to connect. 

Ruth Thomson
SVP, Global Consumer Business

Ruth works with consumer brands across multiple market sectors including beverages, beauty, consumer healthcare and entertainment. Her focus is creating consumer delight and engagement through the integration of innovative technology, bringing significant business transformation for her clients.

Connect with Ruth