• by Ray Schultz , Columnist, May 2, 2023

Everyone likes personalization, both brands and customers. But there are issues on both sides, judging by The State of Personalization 2023, a global study by Twilio Segment. 

Of the businesses polled, 92% are using AI-driven personalization despite a host of challenges, among them: 

• Lack of people and process training — 42%
• Security or compliance — 36%
• Poor organizational processes — 34%
• Poor quality data — 31%

How do companies measure AI effectiveness? They analyze:

• Accuracy of data — 47% 
• Speed of real-time data—44% 
• Customer retention or repeat purchases—44% 
• Time-saving for the business—42% 

In general, 39% of companies struggle with implementing personalization technology, and 50% say getting accurate data is a challenge — a 10% increase over 2022.

On the consumer side, only 41% are comfortable with AI being used to personalize their experiences. And in general, 23% are less comfortable than they were last year with their personal data being used for personalization. 

What’s more, only 51% of consumers trust brands to keep their personal data secure and to responsibly use it. 

But go figure: 56% will become repeat buyers after a personalized experience, up from 49% in 2022.

And 49% of Gen Zers are less likely to shop with a brand that fails to provide a personalized experience, while 27% will stop altogether without personalization.

In addition, 27% of all consumers feel personalization has become less targeted over the past year. 

The view from the business side differs slightly: 80% say consumers spend more — an average 38% — when things are personalized. In addition, 62% cite improved customer retention as one of the benefits of personalization.  

Moreover, brands are leaning into it: 69% plan to spend more on personalization this year. And they are trying to be responsible: 78% now consider first-party data to be the most valuable source of information for personalization. 

Twilio Segment surveyed 3,001 consumers who had purchased something online in the prior six months and 500 decision makers at consumer brands that offer goods or services online from March 8-March 24. The respondents were from Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore, Spain, United States, and the United Kingdom.