Hyper-Personalization in Commerce: Old Practices in a New Age

Hyper-personalization in commerce is a hot topic today, but it’s not entirely a new concept. If we look back, we can see that aspects of hyper-personalization have been around for a long time, especially in certain sectors like B2B and traditional retail.

Defining Hyper-Personalization

Hyper-personalization goes beyond traditional personalization by leveraging real-time data, AI, and analytics to deliver highly customized experiences for customers. Unlike standard personalization, which might involve general recommendations or segmented marketing, hyper-personalization is about creating a unique experience for each individual based on their behaviors, preferences, and needs.

In a previous article, we discussed the definitions and benefits of hyper-personalization in detail. Essentially, hyper-personalization uses advanced technologies to collect and analyze data in real-time, enabling businesses to provide highly tailored recommendations and interactions. This approach contrasts with traditional personalization methods that often rely on basic customer data and broad segmentation.

The ultimate goal of hyper-personalization is to create a seamless, relevant customer journey that significantly enhances engagement and satisfaction. By understanding the unique context and needs of each customer at any given moment, businesses can offer products, services, and content that feel handpicked, driving higher conversion rates and fostering deeper customer loyalty.

Historical Roots of Hyper-Personalization

Although the term “hyper-personalization” is relatively new, the practice itself has deep historical roots in earlier business models.

B2B Transactions

In B2B transactions, companies have long placed great importance on understanding their customers deeply. Account managers and dedicated teams often know their clients inside and out, using detailed CRM systems to track interactions, preferences, and needs. This close relationship is a form of hyper-personalization tailored to each business client. The personalized service and attention to detail that B2B companies provide allow them to create unique and customized experiences for each of their clients, much like what we strive for in hyper-personalization today.

Drawing from the B2B world, the lessons learned in personalization can be valuable for retail leaders. In B2B, personalization has always been about understanding the unique needs and preferences of each business partner, fostering long-term relationships through tailored strategies. Retailers can apply these principles by focusing on outcomes like enhanced customer loyalty, increased sales, and memorable shopping experiences. By adapting strategies from B2B, such as account-based marketing and data-driven insights, retailers can elevate customer engagement and satisfaction.

Traditional Retail

In traditional retail settings, especially in mom-and-pop shops or luxury retail, businesses have practiced a form of hyper-personalization for decades. These smaller shops often had a limited number of customers, allowing them to remember preferences, purchases, and even personal details without the aid of advanced technology. The relationships were personal and direct, making every shopping experience unique to the individual customer.

An extreme example of this can be seen with King Louis XIV of France, also known as the “Sun King.” Famous for his lavish lifestyle and love of fine clothing, he had a personal tailor who was always on call to create custom garments that matched the king’s exact preferences and needs. This level of personalization went beyond simple tailoring — it was a highly specialized service where the tailor knew the king’s tastes, measurements, and even his daily schedule to ensure that his clothing always reflected his royal status. This is an early example of hyper-personalization in luxury, where the service was tailored to the individual’s precise desires and ultimately helped define French haute couture as we know it today.

Challenges of Scaling Hyper-Personalization Today

However, the landscape has changed dramatically with the advent of the internet, digital technologies, and the explosion of available data. Today, customers interact with brands across numerous channels – websites, apps, social media, email, and in-store – all expecting a seamless and personalized experience. This proliferation of touchpoints makes it challenging to deliver consistent hyper-personalization without the right technological infrastructure.

While CRMs in B2B have traditionally managed customer data well, they are no longer enough on their own. The volume of data, the speed at which it needs to be processed, and the need to integrate information from multiple sources far exceed what traditional systems were designed to handle.

In retail, while some customers still enjoy personalized experiences, these are often dependent on human factors, such as the knowledge and attentiveness of store personnel, the amount of time they can spend with each customer, and the customer’s own openness to interaction. These factors vary greatly and are not scalable. As such, even today, hyper-personalization often remains inconsistent, tied to specific stores or situations where a more personal touch is possible.

Conclusion

While the concept of hyper-personalization is not new, the challenge today is to replicate these deep, personal connections on a much larger scale using technology. Understanding the history and limitations of past personalization efforts helps us see why new strategies and tools are needed in the digital age. The next step in this journey will explore the technologies and strategies that companies are using to meet these challenges and achieve true hyper-personalization at scale.