Hyperpersonalizing the Customer Experience

What is hyperpersonalization?

Hyperpersonalizaton is in many ways exactly what it sounds like: a way of customizing experiences that is tailored specifically to individual customers. The experience might be a brand communication like an email marketing campaign or targeted ad. Or it might be some portion of the brand's core products and services. In our digital age personalization is increasingly possible at every touchpoint of the customer relationship and it’s about much more than knowing your audience.

For customers, hyperpersonalization has meant better and more relevant ads and suggestions, even introducing them to items that may not have been on their radar. Predictive analytics are employed to anticipate customers’ needs based on everything from location and age data to previous purchases or web search history. It's not simply a mechanism to sell customers more things (although it may do that). More importantly, it can make their experiences more relevant and informative, giving them a positive impression of brands that align with their needs and even their values, encouraging them to return later and recommend those brands to their friends and family.

The strategy uses data analytics and AI to personalize a brand experience that’s not only attentive to customer desires but can anticipate them. This kind of digital engagement necessarily relies on the availability of a wide range of data in order to make predictions about the most relevant products and services and what messaging to deliver when. These techniques have been developed for many years within purely online domains like the digital ad market. But as more elements of our interactions with brands (and with each other) have become increasingly digital, those elements are becoming ever more personalizable.

Overcoming choice overload

One way brands can use personalization effectively is to assist in customers' decision-making. We generally think of having more choices as a good thing, but because there are such huge numbers of options regarding certain things, people sometimes experience choice overload. Whether it’s picking a particular brand's product or choosing what to do with their free time, the overwhelming number of options consumers are given can lead to a cognitive paradox that makes it harder and more frustrating to make a decision. Being presented with fewer and more relevant choices can help overcome this uncertainty.

One way to solve such dissonance is to shop at a store where they know you and can make some recommendations. A small local shop can get to know each of its customers in order to make personalized recommendations like that. But that kind of human touch is hard to achieve at scale, and might be impossible online. But given a few digital touchpoints, algorithms can do this on a much larger scale, allowing digital engagement to achieve the same level of personalized service, and potentially even improving upon a more human-centric approach.

The world of wine is a great example of a market that can easily induce choice overload. If you’re not entirely knowledgeable about grapes, regions, and vintages, searching for a nice red wine will easily present you with thousands of options. Yes, you can (and likely will) narrow your search by price, and you'll probably select something that looks good based on some vague criteria. But you’re likely to feel less confident about your decision, and wonder if you might have chosen better. So it shouldn't surprise you that brands have stepped up to leverage hyperpersonalization to improve this experience for novice wine buyers.

On Bright Cellars' website the first thing you’re asked is “How would you describe yourself? Wine novice, or wine expert?” Whichever you answer, you’re taken to the same quiz about your flavor preferences, but that initial question allows the customer to self-identify and lets the brand know what kind of wine drinkers are interested in their service. After answering some questions, they’ll ask for contact info to send the results so that you can sign up for a box of wine you should theoretically like. This has been successful enough that other brands have followed suit with quizzes that feed answers into AI algorithms to choose wines “personalized to your tastes.” Once you receive your products, you can rate them, further refining your taste profile and allowing the AI to make better and better suggestions.

Faster fashion

Clothing is another area where choices can sometimes be overwhelming. That's the fundamental insight behind at-home personalized styling services like Trunk Club and Stitch Fix. Fashion may not have been on the top of everyone's priority list recently, but as we put away the sweatpants and athleisure wear we've been living in, such services are likely to strongly resurge. Stitch Fix has probably done hyperpersonalization best in this space. The brand also uses questionnaires to refine its algorithm, as well as several other inputs, including a kind of gamified Tinder for clothes where you swipe left or right on various clothing items.

And the company is very transparent about how the data is processed by your AI “matchmaker.” Clothing buyers and designers are actually the first to fill out profiles on the garments on offer so that when a customer makes a specific search request they can find what they need with the least amount of effort. In fact, the entire experience, hyperpersonalization and all, is designed to be easy for the customer to use.

What’s interesting about a subscription service like Stitch Fix is that there’s an inherent cost matrix. Sending a customized box costs the company a fixed price – shipping costs, overhead, etc. So the company can only make money if a customer buys enough of the clothing in that box to cover those costs. In this way, hyperpersonalization is really at the core of a business like Stitch Fix, allowing them to constantly increase the likelihood that customers will like the products they've selected for them.

A new breed of company is using hyperpersonalization tools to short circuit the entire process for designing and producing clothing. The last revolution in clothing brought us so-called "fast fashion" from brands like Zara and H&M. But now startups like Shein are making fast fashion look slow by using social media and influencers to identify fashion trends and working directly with factories to turn around new products in a matter of days and selling them directly to consumers, often directly from within social media ecosystems.

Personalizing retail 

Hyperpersonalizing experiences and communications for customers doesn't have to be limited to purely digital realms. We're starting to be able to bring this kind of personalization into the physical world as well. We've been imagining what this sort of personalization would look like for at least 20 years. Minority Report envisioned that retinal scans would identify us, but of course now we all carry around powerful tracking and personalization devices called smartphones (and even wearables like fitness trackers). These devices' ability to capture data actually can allow for even more meaningful personalization than many of our science fiction stories predicted.

It might seem counter-intuitive that automating customer engagement can make it feel more personal, but that is precisely what AI-powered applications, predictive analytics, chatbots, and even online surveys are able to do. Brands are able to know more about their present and future customers, and they can rely on a series of digital touchpoints to continually gather more information. Online these touchpoints can be anything from app downloads to social media mentions. Retailers are beginning to leverage their data to provide in-store personalization with things like digital signage, kiosks, and customer-facing tablets.

Brands like Sephora that have invested in creating great personalized experiences in their mobile apps have realized that the digital and physical worlds can come together nicely for in-store customers that already have their app on their smartphones. They can ping you when you’re near a store and suggest customized items that you may want to stop in and buy. If it’s been a few months since you bought a new mascara, they might suggest one you'll like and perhaps even send a coupon. Other brands like Walgreens are also expanding upon their loyalty programs in similar ways to personalize the in-store experience for their customers.

Automating engagement

Not all hypersonalization implementations are intended to drive more purchases. The same techniques can be used to improve customer experiences even when those experiences are the product. And that can be true for in-person experiences as well as virtual ones. Disney’s MagicBand technology is a great example. Guests are given wristbands containing RFID chips that are preset with their personal preferences. These can then guide the guests towards interactions that they might enjoy the most. By also serving as a way to enter rides and pay for concessions, these wristbands reduce friction for Disney's customers.

Disney developed the MagicBand technology years ago, before the pervasiveness of today's smartphones, and having a proprietary system allows them a high degree of control and first-party data collection. One of the executives behind its creation is now at Carnival Cruise Lines and has implemented a similar system for personalization on their cruises. A highly customized system like their OceanMedallion might be necessary in an environment without stable cell service like a cruise ship. It requires significant investment, but for an immersive high-touch experience like a cruise or a theme park it could provide significant ROI. Disney reportedly plans to start integrating personalization into the storytelling of the experiences in their parks. That could provide yet another moat around the Disney parks experience that competitors wouldn't be able to easily match.  

For most brands hyperpersonalization can be achieved with a much lighter lift. The pervasiveness of smartphones, their ever increasing capabilities, and the increasing willingness of consumers to install and use apps from the brands they care about, all make it relatively straightforward to implement highly personalized services that extend into the physical world. As travel increases post-pandemic, apps can now make personalized recommendations on hotels and activities that suit customers and their families.

One of the key insights from the last year in the events world has been that people don't want to lose some of the benefits of virtual events, even as live events return. But that also translates to a new willingness to engage with a brand’s digital touchpoints in ways that can result in more data insights than ever. The collection of pre-event data, for example, can offer new insights to event planners. Location data can help mobile pop-ups personalize offerings as they move around the country.

Further innovations

Brands need customer trust, and we've seen that data privacy concerns are rising with consumers. But we’ve also seen that people are willing to share their data freely when they know how and why it’s being used (and that it’s secure). As a result, brands have implemented all sorts of strategies for creating practical benefits for customers who share things as simple as their emails addresses or phone numbers. According to a recent study by Gartner, millennials don't mind being tracked as long as it’s to provide a better, more personalized shopping experience.

Of necessity, hyperpersonalization strategies rely on a brand's ability to collect more data in order to refine outcomes. As technology advances, that may mean implementing entirely new forms of tracking. In a return to our old Minority Report premonitions, Walgreens and other retailers have already experimented with the use of biometric data such as facial recognition and sentiment-tracking to try and gauge the mood of their in-store customers and offer up personalized ads and discounts using that data.

While there can sometimes be pushback against new technologies, hyperpersonalization may be one area in which the trade-offs are deemed worthwhile.