Personalization at Scale

“Those first few moments of the pandemic … it felt like there was a moment when we were all in that together,” said Thomas Ranese, former chief marketing officer of Uber and now a senior advisor at McKinsey. “I don’t think that moment lasted very long.”

After that brief period of unity early in the pandemic, technological improvements and political and societal shifts accelerated the fragmentation of the consumer.

 “The world has gotten more splintered, more divided, more fragmented, and so the idea of a new consumer has to be thought of in that same lens,” said Ranese. “As marketers, we have to think now a lot more about subsegments of customers and consumers … in a much more complicated way.”

Technological improvements have made that segmentation easier to do. It is finally common for even a massive company to tailor its offerings online to a single customer and even to target increasingly small segments in person. Best Buy is undergoing what Polly Tracey, chief communications and public affairs officer at Best Buy Canada, called a “big shift in our mindset: Making everything look the same is no longer the best way to do business.” The company is currently piloting a hyperlocal approach to stores in the U.S., asking the question: “What do we need in this market: big stores, small stores, fulfillment options, and employment models? We try different small store formats in each market to create the perfect set of tools for that market. It’s geographic personalization.”

The same is true in the entertainment world, said CBS’ Subramanyam, where consumers fully expect to consume content however and whenever they want it. “There is a lot of power and a lot of agency in the hands of the customer,” she said. “From where we sit, it means making content available on every possible platform, as close to in real time as possible. So, we will have a show that’s dropping live on broadcast that’s also being streamed on Paramount+ and is being made available on demand.” Subramanyam added, “We’re saying, ‘Hey, I’m not going to tell you how to eat pad thai. I’m going to make pad thai available to you in all of these different ways.’ And you choose how you eat pad thai.”

There is a lot of power and a lot of agency in the hands of the customer.

In early 2023, there was a massive amount of attention given to the dramatic improvement in generative artificial intelligence, as well as a lot of fear and handwringing about what it means for society. But from the standpoint of understanding the customer, most of the executives we spoke to see it as a huge positive. 

Procter & Gamble CEO Jon Moeller said that the technology is already cutting down innovation cycle times and will soon “inform the shopping experience.” He added, “It’s something that we embrace.”

AI is already having an impact on online customer service, said Soyoung Kang, CMO of beauty and skincare brand eos Products. “Where I’m interested in AI specifically is in the future evolution of generative AI and chatbots as a useful mechanism for marketing purposes because so much of the conversation that we have—the consumer engagement, audience engagement that we do, for example, on social media—is very manual.” She said, “Chatbots in the past were not particularly good at having a natural conversation, and that game is completely changing right now.”

Not everyone is convinced of the hype, however. Bob Eckert—former CEO of Mattel and a director of Amgen, Levi Strauss & Co., McDonald’s, and Uber—said he doesn’t see it as a “game changer” yet. He said, “I do see it as the next generation of efficiency when it comes to marketing and understanding our customers.”

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