How Do Companies Keep Tech-Powered Personalization from Going Too Far?

Consumers have come to expect that, in exchange for their data, companies improve their shopping experiences. But along the way, it’s on brands and retailers to determine where the line is: what do consumers want help with, and what do they find creepy?

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At a Coresight Research conference held Wednesday in New York City, retail executives gathered to discuss the challenges and opportunities coming toward retailers, as many begin preparations for holiday season and work to retain existing customers.

Among the hottest topics were artificial intelligence and personalization , which retailers continue to implement in the hopes of redefining the customer experience.

But as brands and retailers do so, they have to strike a delicate balance between improving the quality of recommendations and marketing initiative and respecting their customers’ data and privacy. In other words, they have to ensure they don’t creep their customers out.

Rosalia Polizzi, Rue Gilt Groupe ’s executive vice president of merchandising, said while the company leverages technology to help aid the product discovery process, her team still values hand merchandising brands’ sites up to four times each day.

That, she said, helps keep brand style and voice active, rather than relying only on technology.

“We believe that while there’s an importance in personalization, it’s just [as] important for the brand to have a perspective on what the most important thing is for a consumer to see each and every day,” she said. “Many customers will tell you if you ask them that they want ‘X,’ but sometimes they’re much more motivated to buy by seeing ‘Y,’ so it’s really important to have diversification in what you’re offering to the customer.”

Polizzi also mentioned that Rue Gilt Groupe’s storytelling moments remain crafted by the team. For instance, she said, if a brand wants to show off travel looks to consumers, merchandisers still select the items that go on the site page.

Mike Relich, who previously served as the co-CEO of PacSun , said that planners’ expertise will still prove crucial in creating consumers’ discovery journeys and brand affinity.

“At the end of the day, you can have the best operational back end, but product is what sells. You need to have the right product, and with AI, I think it’s good that it can tell you what sold in the past, but trends change, and I think AI is going to be a really good augmentation tool to the buyer, but basically, it’s still an art,” he said.

For watch company Movado , which in many cases deals with luxury consumers, personalization sometimes can be an expectation. However, said Behzad Soltani, the company’s chief technology officer, while Movado’s brands can garner a wide array of insights on a consumer solely based on their email address, the company exercises discretion on what types of insights it should actually be using.

He said, rather than trying to do one-to-one personalization for e-commerce, the company uses AI to enhance product descriptions and share more about individual product features, which consumers take specific interest in for a purchase like a watch.

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Part of the reason for that is Movado’s target customer, which may skew a little older than many other brands.

“If you have a brand [where] its audience is a bit younger, they tend to accept those things a little bit more, versus some of our brands that have that older audience,” Soltani said.

Even beyond demographic subsets like generational segmentation, the location of companies’ headquarters can predict how far along they are in their data and AI strategies.

Chris Baker, founder of digital media company Totem, said that, though many stateside brands have begun to use the technology in a way that’s meaningful to their businesses, Asian-native companies likely have them beat.

“Markets like China are five years ahead in many cases, just because they had early carte blanche access to data. I think the U.S… leads Europe [because] a lot of this in Europe has been early restricted by GDPR and data privacy,” he explained.

Privacy concerns continue to impact U.S. brands and retailers. About 18 states have some form of privacy laws in place, and many companies will soon be subject to the EU AI Act, which has strict provisions around what kind of consumer data is acceptable to use.

Striking the correct balance on consumer data can prove trying for brands, who often realize their data isn’t clean enough to input into AI systems or realize they’ve tried to leverage too much data all at once.

Though consumers still seem to be adapting to data sharing and hyper personalization in their shopping, many have admitted that they want to see it integrated further. SAP Emarsys data shows that, while 64 percent of consumers indicated that they believe AI is having a positive impact on their e-commerce experiences, just 35 percent said they want AI to support them in finding new products.

Against that backdrop, Dan Hess, CEO of research company Merchant Forecast, said companies should ensure that, in the technology-led frenzy, they keep an eye on key customer metrics, purchasing patterns and sentiment around data and privacy. That approach, he noted, requires a combination of technology and people to achieve.

“Never lose sight of the customer, because they really don’t need what they’re buying. They need an emotional connection to what it is you’re offering, and they have so many other choices out there, so you need to make sure that [your] combination of fashion and value and experience is one that compels them,” he said.

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