Brands that create personalized experiences by integrating advanced digital technologies and proprietary data are enjoying revenue increases of 6% to 10%, according to research by The Boston Consulting Group.
Revenue increases in the brand set run two to three times faster than for those who have not focused on such digital integration, the company stated.
Personalization leaders stand to capture a disproportionate share of category profits while slower movers will lose customers, share and profits, BCG indicated. The company expects that over the next five years in the retail, health care, and financial services sector, personalization will push a revenue shift of some $800 billion to the 15% of companies that pursue personalization effectively.
The BCG survey of personalization programs at more than 50 companies in 10 industries underscores the value potential but also highlights the execution challenges. Two-thirds of respondents said that they expect at least a 6% incremental annual revenue lift from personalization, with companies in sectors including apparel, financial services, grocery and wholesale clubs, and technology, anticipating increases of 10% or more. About a quarter of companies in those sectors report that they have achieved revenue increases of 6% or more.
“In many consumer categories, high-value customers drive 70% or more of the value for companies,” said Mark Abraham, a BCG partner. “Brand individualization unlocks the ability to enhance loyalty with these and other customers by tailoring the brand experience to each contextual user journey.”