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How brands can harness AI to deliver hyper-personalization

By Ajay Yadav, Cofounder

May 25, 2023 | 7 min read

Artificial intelligence is making it easier than ever for brands to deliver experiences that are tailored to the preferences and needs of individual customers. Sitting out on this trend, writes Simplified AI co-founder Ajay Yadav, could result in a brand losing its competitive edge.

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With AI, brands can analyze huge quantities of consumer data in order to detect important patterns. / Adobe Stock

The days of one-size-fits-all marketing are long gone. Consumers today demand personalized experiences, and brands that can deliver on this expectation stand to win a significant competitive advantage.

This is where hyper-personalization comes into play. A methodology that uses AI to analyze real-time customer data and create highly customized experiences at scale, hyper-personalization is a must in today’s business landscape. Below, we'll explore the benefits of hyper-personalization and why it's essential for any business looking to keep up with ever-changing consumer expectations.

What is hyper-personalization?

Hyper-personalization is a business tactic that aims to tailor marketing experiences to individual customers’ needs. It leverages AI to analyze large quantities of real-time data in order to identify patterns and trends in consumer behavior. Brands can then use those insights to create highly customized customer experiences at scale.

Some examples of real-world applications of hyper-personalization include:

  • E-commerce product recommendations based on past purchases or browsing history.

  • Personalized content on news websites based on reading history or interests.

  • Targeted advertising on social media platforms based on demographic data and user behavior.

  • Customized product bundles or offers based on purchase history or preferences.

As AI tools become more sophisticated and accessible, a growing number of businesses are starting to adopt hyper-personalization in an effort to adapt to an evolving business landscape.

The need for personalization

Modern consumers don’t just appreciate hyper-personalization - they demand it. According to a 2021 McKinsey study, 71% of consumers expect companies to deliver personalized interactions, and 76% get frustrated when they don’t get them.

The desire for personalized experiences is quite strong. 83% of consumers who responded to a 2018 Accenture survey, for example, said they’d be willing to share their personal data to enable a personalized experience, and 90% said they’d be willing to spend more with companies that offer personalized customer service.

Companies that invest in personalization are seeing the results. Evergage reports that 86% of marketers have seen a substantial increase in business results due to personalization campaigns. Similarly, a 2019 Gartner survey found that brands that aren’t willing to get on the personalization train are at risk of losing 38% of their existing customer base.

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The role of AI in hyper-personalization

AI is at the very core of hyper-personalization, identifying patterns in consumer behavior and providing insights into individual consumers’ preferences. The analysis of huge amounts of data – a laborious and time-consuming task for humans but a breeze for AI – is key to creating hyper-personalized experiences for consumers.

And AI’s capacity to extract valuable insights from mountains of data is rapidly improving. As technology advances, it will continue to make it easier for brands to refine and optimize their personalized marketing efforts. This can in turn boost customer satisfaction, engagement and loyalty while delivering better business outcomes.

How brands are using hyper-personalization to win over customers

Brands of all sizes are already using AI-powered hyper-personalization in a variety of ways to improve the customer experience. Here are a couple of examples:

Personalized diet plans: A crop of apps and services have recently sprouted up which rely on AI to design personalized nutrition plans, tailored to each user’s unique dietary needs and health concerns. While this technology is still in its early stages, it could eventually replace one-size-fits-all diet plans, providing consumers with diet plans that are both more convenient and more effective.

Personalized clothing recommendations: UK retailer Marks & Spencer recently acquired Thread, a personalized styling service that uses AI to analyze data on customers’ body types and style preferences in order to provide personalized fashion recommendations. This allows the retail giant – which was founded in the nineteenth century – not only to maintain a modern edge but also to meet consumers’ needs by creating highly personalized shopping experiences.

All aboard the hyper-personalization train

As the market becomes increasingly crowded and competitive, businesses must harness the power of AI to deliver hyper-personalization to their customers. Brands that invest in hyper-personalization are already seeing results – and those who fail to join the trend risk falling behind the competition.

The time is now for brands to adopt hyper-personalization.

Ajay Yadav is the co-founder of Simplified AI. For more on the latest happening in AI, web3 and other cutting-edge technologies, sign up for The Emerging Tech Briefing newsletter here.

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