The Future of Personalization Is Here: The Trends to Look Out for in 2025

Personalization is how retailers tailor brand interactions and campaigns to individual consumers. Get it right and your brand could win loyal customers who feel connected to your brand, and convert more frequently with larger average orders. 

In an increasingly competitive ecommerce landscape, personalization is essential for standing out. It’s how you can make your customers, in all of their uniqueness, feel cared for and known. It’s rapidly becoming table stakes for brands: The 2024 Forbes State of Customer Service and CX Survey found that 81% of customers prefer companies that offer personalized experiences. And 70% say it’s important to them to interact with employees who know who they are and their history with the company, such as past purchases, buying patterns, and what type of support they’ve needed. 

According to McKinsey, personalization marketing can reduce customer acquisition costs by as much as 50%, lift revenue by anywhere from 5% to 15%, increase marketing ROI by 10% to 30%, and improve customer outcomes.

It’s clear: Retailers need a solid understanding of consumer preferences and how they can personalize the full customer journey. Here we look at the top personalization trends, statistics, and expert opinions for 2025 and beyond.

What is personalization? 

Personalization is the practice of tailoring customer experiences or marketing communications to specific segments across the funnel based on customer information.

Most of the channels that customers regularly interact with can be personalized, including:

• Live chat
• Websites
• Emails 
• Mobile apps 
• In-store interactions 
• Call centers
• Social media

Depending on the brand, here’s how personalization could look in practice:

• Product recommendations: Using recent purchase data, brands identify additional products customers may be interested in purchasing. 
• Personalized rewards: Brands tailor rewards to each individual consumer’s known interests and preferences. 
• Mobile apps: Retailers personalize mobile push notifications to provide personal product recommendations.
• Subscriptions: Brands send curated personal monthly subscription packages.

How personalization can help your brand in 2025

Personalization has always been a cornerstone of business—and despite the death of third-party data, the tools available to personalize are more powerful than ever before. Here’s what personalization technology is able to do for you and your customers in 2025.

Help meet consumer expectations

If 81% of customers prefer companies that offer personalized experiences, that means they don’t just want them—they expect them. It follows that companies that aren’t set up to deliver personalized experiences are both missing out on potential customers and revenue opportunities, and at risk for losing loyal customers. It’s important to get out of maintenance mode on this, or else customers will hop to brands that offer the experiences they crave.

Enhance customer loyalty and retention

Segment’s State of Personalization Report found that personalization drivesrepeat purchases and better customer retention. But there’s clearly work for retailers to do: While 92% of brands are already offering personalized experiences, customers aren’t exactly in love with what they’re experiencing. In a 2023 Forrester survey, 67% of US online consumers rated their experiences with brands as merely “okay.” Only 19% ranked them as good—and excellent came in at 0%.

At first glance, those stats may be depressing—but as we’ll explore below, the tools and data sets for personalization are better than ever before. Even making small changes will put retailers on a positive path.

Improve omnichannel marketing efforts 

Today’s shoppers are engaging with brands across multiple channels, often in the course of a single purchase. They’ll try out a pair of shoes in-store, then research them on the web or via social media influencers, buy them through the app, exchange them for a different size in person, and so forth. This is one way customers expect personalization: They want to engage where, how, and when they demand. And they want it all to happen seamlessly, with unification across all channels. 

That can be a challenge for brands—but getting it right both creates personalization, and forces omnichannel marketing efforts to improve. It’s not enough to simply go omnichannel: Doing so has to meet customers’ personalization expectations.

Build trust through transparency

Consumers love personalization, but they’re also concerned about how their data is used. 

Forty-eight percent of consumers say they appreciate the convenience of personalization, but only as long their data is secure. 

In a separate report, KPMG found that 40% of individuals don’t trust companies to use their data ethically, and 30% say they flat out refuse to share data. 

Transparency helps build trust, and consumers will buy into an exchange of data with a merchant as long as there’s an explicit understanding about what they’re exchanging and what they’re getting out of it. A 2022 Forrester Consumer Benchmark Survey on the state of consumer personalization found that 31% of adults will share personal information if cash rewards are involved, while 22% are motivated by loyalty program points. That’s an opportunity where retailers can just keep improving: Customers want personalization—just make it worth their while.

What are the benefits of personalization? 

Brands that excel at delivering personalized shopping experiences can expect loyal customers, increased revenue, and a boost to their bottom line. 

Michelle Bacharach, the CEO and cofounder of AI-powered dynamic content creator FindMine, explains that brands that tap into personalization trends can expect future success in meeting consumer needs. 

“Customers have high expectations for their favorite brands, and online marketplaces have never been more important,” she says. “Brands that are able to predict the desires of their online customers, and push relevant and inspirational content to them based on those desires, will see huge success in the coming years. Those who don’t will fall behind.”

Here are some of the top benefits of ecommerce personalization:

• Boost repeat purchases
• Improve brand engagement 
• Drive brand loyalty 

Boost repeat purchases 

Personalizing shopping experiences can win customer loyalty and encourage shoppers to come back to your brand. In a recent study, 57% of consumers say they’ll spend more on a brand that offers personalized experiences—which makes them more likely to return.

And here’s the thing: The more a customer interacts with your brand, the more data they create for you to act on, leading to ever more precise data and relevant experiences. This creates a flywheel effect in which the strength of the relationship with the customer continually grows stronger, generating stronger, more robust, longer-term customer lifetime value and loyalty.

Improve brand engagement

When brands personalize marketing efforts, they deliver the right content to the right people at the right time. Instead of delivering the same message to the entirety of a broad audience, marketers deliver the right message to different customer segments.

When people receive personalized messaging, they’re more likely to engage with your brand. In fact, more than half (54%) of marketers worldwide reported better brand engagement because of increased personalization efforts.

In turn, the increased engagement results in a higher conversion rate and better responses to discount offers. As eMarketer principal analyst Dave Frankland points out, “Consumers don’t consider the challenges to well-executed personalization; they simply expect relevant content delivered at the right time and place.”

Drive brand loyalty

Personalization can set your brand apart from the competition. Receiving personalized communications helps customers feel special and valued by your brand, demonstrating your investment in the relationship and not just the purchase. 

Thoughtful personal interactions like addressing a customer by name, suggesting relevant products, or asking them about their recent purchase all generate positive brand perceptions. 

These positive sentiments fuel future purchasing decisions and encourage customers to return. It’s no wonder then that 63% of customers will pay more to shop with brands they’re loyal to.

Plus, when retail brands get it right, customers’ repeat purchases over time generate more data from which businesses can create tailored experiences. 

Personalization trends to follow in 2025 

Data privacy regulations, mobile commerce, and innovative technology are shifting ecommerce personalization. Here are the top personalization trends that are expected to shape the first half of 2025:

1. Hyper-personalization
2. AI-driven personalization
3. Predictive personalization
4. Privacy-conscious personalization
5. Personalized rewards for customer loyalty
6. Building brand communities
7. More personalized mobile experiences
8. Facial recognition technology

Hyper-personalization

Hyper-personalization uses real-time customer data, artificial intelligence, and machine learning to analyze and gain insight into customer preferences, behaviors, and buying habits to deliver relevant content at the right time, to the right people. That content can come in a variety of forms, including customized store experiences and personalized ads, both of which enhance customer satisfaction and drive sales in highly competitive markets.

One great example of a hyper-personalization marketing campaign is Burger King’s Million Dollar Whopper Contest. For this campaign Burger King crowdsourced their next million-dollar idea using AI algorithms. Then the fast-food giant dynamically generated thousands of ads featuring video, audio, and text elements tailored to individual consumer interests and preferences. The initiative was a success, driving interest and sales for the Whopper. That’s the power of hyper-personalization. 

Be aware though: Hyper-personalization requires high volumes of consumer data, a robust technological infrastructure, and advanced analytics to drive continuous iteration, delivery, and optimization of tailored shopping experiences based on evolving market dynamics and consumer preferences. Therefore ensuring you have the technical underpinnings set is key before embarking on a hyper-personalization journey.

AI-driven personalization

Segment’s report shows 92% of businesses are already using AI-driven personalization to drive growth. In 2024, 69% of brands are increasing their investment in personalization—despite challenging economic headwinds. 

A key use case of artificial intelligence is providing product recommendations based on previous data. For instance, earlier this year, DTC e-grocer Misfits Market launched a feature that automatically places items its algorithms predict shoppers are likely to order in those shoppers’ carts. 

Using the “preferences” option, customers can choose whether they like or dislike the items Misfits selected for them. 

In an interview with Grocery Dive, chief strategy officer Kai Selterman explained how personalizing product recommendations to the customer helps the brand save time and improve the overall shopping experience. 

“We always go back to this notion that the online store should be personalized to every single customer and really show them the products they love and not waste their time with the products that they probably don’t love,” Kai says.

The tool doesn’t just help shoppers save time––it also helps the brand increase basket sizes. The auto-cart feature chooses items for shoppers based on their previous purchases and can add “discovery” items based on product pairings and purchase history. 

Kai explains that people typically purchase 75% to 80% of the same grocery items every week. But based on purchasing data, the brand can recommend additional items it thinks shoppers will like. 

“It’s very common that berries are bought alongside apples. If you’re someone who buys berries all of the time, but you’ve never bought an apple, we’ll recommend, ‘Hey, you might like this new apple that we have,’” says Kai. 

Customers can then choose to purchase these discovery items or leave them behind. 

Predictive personalization

In 2025, businesses will use the new generation of generative AI applications to anticipate consumers’ needs before they even know they have them. 

Acxiom’s annual CX trends report shows that 51% of consumers like it when companies recommend offerings tailored to their personal preferences. Through personalized recommendations, brands can help consumers easily find relevant products. 

And yet, according to the same report, only 13% of brands currently use predictive personalization, a cutting-edge advertising strategy that uses AI to predict what people will want. 

Fortunately, more brands are acknowledging this expectation. They’re shifting from broad-brush demographic- or market-based segmentation to an approach that favors personalization strategies that use customer data to deliver relevant experiences.

Predictive personalization helps brands build a deep understanding of customers’ changing needs and wants. Unlike generative AI, which uses behavioral patterns and individual traits to learn what consumers might want or do next, predictive personalization is more of a data-led approach that employs sophisticated machine-learning models to act on customer data to deliver more engaging and relevant customer experiences.

Take Stitch Fix, for example. The personal styling service uses AI algorithms trained on a massive dataset, including purchase history, social media activity, and customer reviews to understand style preferences. Stitch Fix can accurately predict which pieces individual customers will like, and their preferences over time. 

These algorithms combine customers’ information with additional data to:

• Curate personalized clothing selections
• Personalize the app and website to individual customers’ styles
• Optimize the shipping and delivery process
• Track customer delight and satisfaction to identify potential improvement areas

Through predictive personalization, Stitch Fix improves the overall customer experience, resulting in higher customer satisfaction, better conversion rates, fewer returns, and increased brand loyalty.

Privacy-conscious personalization 

Brands face a cookieless reality in the near future. Apple, Firefox, and Brave already block third-party cookies. 

Online shoppers are increasingly exercising their own privacy rights as well. Governments are making it easier for them to do so––Europe, the US, China, and Brazil have all recently started issuing harsh penalties to violators of data privacy laws and regulations. 

A recent survey shows that 67% of consumers feel they don’t understand how their data is used, while 65% of consumers would stop using a brand that is dishonest about how it uses customer data. Consumers are increasingly concerned with who has their data and how they are using it. 

Brands that want to get it right need to balance personalization with respect for customer privacy, otherwise they may risk losing the very customers for whom they’re trying to personalize. 

Many brands are finding that balance in first- and zero-party data, which is data that the retailer owns because the customer has opted to share it, as opposed to data purchased from third-party aggregators. Examples of first- and zero-party data include click data on the retailer’s website, forms the customer has filled out, and conversations the customer has had with support. As third-party data falls by the wayside, 78% of brands consider first-party data to be the most valuable data source for personalization, up from 37% in 2022.

Some first-party data collection methods include:

• Product recommendation quizzes
• Loyalty programs 
• Newsletter sign-ups 
• Member communities 
• Branded apps 
• Customer surveys

Johnnie Munger, CTO of LA-based digital product agency Wonderful, explains how the removal of third-party cookies provides an opportunity for brands to build better relationships with customers. 

“Cookies were a way for brands to personalize experiences by tracking customers without them knowing,” he says. “Cookieless tracking forces transparency between brands and consumers in personalization, and offers a major opportunity to engage with customers on their terms.” 

Johnnie adds that the way forward is for brands to rely on their own zero- and first-party data collection methods. The key to success, he explains, is to make it easy for customers to control their experiences, and not to make the buyer’s journey longer or harder. 

“We’re increasingly working with brands to develop features like quizzes into optional, responsive features that support the buyer journey without creating a barrier,” he says. “Quizzes shouldn’t make it harder for customers to access the products. Instead, brands should use quizzes as a resource for building more robust customer profiles and, ultimately, creating personalized experiences that customers can control.”

For example, direct-to-consumer (DTC) wine brand Big Hammer Wines uses a product recommendation quiz to personalize their offerings and segment their audience. The brand also uses the quiz as an opportunity to capture users’ email addresses in exchange for a $50 discount on orders of more than $150.

Ryan Turner, founder of email marketing agency Ecommerce Intelligence, explains that the brand can then use these quiz responses to optimize their email campaigns and better target their audience with relevant offers.

“All of their responses can then be used to deliver personalized marketing messages, particularly via email and SMS, because the segmentation opportunities are so vast,” Ryan says.

“Using tools like TypeForm or Octane AI, a brand can run a quiz or survey with 5 to 10 questions, then segment people based on their responses to send them highly personalized email or SMS campaigns. Klaviyo is great for this, as it will take data directly from your quizzes/surveys and build segments in real time,” he adds.

Personalized rewards for customer loyalty

Personalization doesn’t need to be limited to the pre-purchase part of the customer journey––it’s just as important post-purchase. 

Retailers can delight customers with personalized deals and rewards based on their recent purchases. Rewards that are tailored to individual customers show that your brand cares, and can motivate them to join your program and return to shop. 

Currently, 55% of global consumers say that tailored rewards are why they join loyalty programs. 

For example, grocery retailer Kroger uses personalized rewards as a way of encouraging consumers to shop with them instead of jumping to competing discount retailers. They provide personalized coupons for fuel or grocery items shoppers have recently purchased.

Shoppers want relevant benefits—not one-size-fits-all rewards. 

Cava—a Mediterranean fast casual chain—is one brand providing relevant rewards to their guests. They tested restaurant models to support their new bankable points rewards program, which lets diners redeem their points for a variety of rewards. Cava expects their new loyalty offering to yield a personalized customer experience that deepens engagement and fosters more meaningful connections with its guests.

AI can help brands provide the more personal experiences customers seek, and build long-term relationships. In particular, generative AI can significantly enhance customer interactions, helping brands offer tailored loyalty programs that optimize the customer experience. 

The challenge lies in balancing trust and relevant, personalized offers against consumer privacy, as many consumers are leery about how companies use their data.

Building brand communities 

When access to customer data relies so heavily on trust, it makes sense for brands to invest in customer loyalty. To improve relationships with customers, many brands are turning to community building. 

Brand communities have been increasing in popularity in the past few years, and for good reason––communities strengthen customer retention and encourage interaction between customers and brands. In fact, a survey by Tint, a community-powered marketing platform, shows 70% of marketers are prioritizing community building in the next two years. 

What’s more, about 60% of marketers are concerned they’re just one algorithm change away from losing access to their brand’s fans. Along with shifting data regulations, this further fuels the need for direct and owned community engagement channels.

Communities allow brands to get to know customers on a deeper level and use these insights to inform their personalization strategy. 

Ryan, of Ecommerce Intelligence, explains how community building can be a cost-effective way of getting to know customers better. 

“We’ve seen brand communities built on various platforms including Facebook groups and Discord, meaning they can be simple and cost-effective to set up,” he says. “The thing that determines whether they’re effective or not is how much the brand actually engages with people on a personal level inside the closed community, so customers and prospects feel like they’re actually getting additional attention and that spending time in the community is worth it.” 

Ryan adds that communities work especially well for brands with niche products or items that are new to the market. 

“They seem to work best in markets where there are a lot of questions around the product line, or where people need to do a good amount of research,” he says. “One successful example of a Facebook brand community we’ve seen is the Shopify store FAB CBD. People have all kinds of questions they need answers to before deciding whether the products are right for them. Building an engaged branded community in a market like this is an excellent way for a retailer to set themselves apart from the competition and drive brand loyalty through a truly personalized and engaging experience.”

The FAB CBD group currently counts more than 18,000 members and hosts active members-only discussions on its product lines and their benefits. 

Community building also helps brands boost their bottom line––they may even find they can lower their dependence on paid advertising.

More personalized mobile experiences 

Global mobile ecommerce sales are expected to reach $3.4 trillion by 2027. According to an Emarketer forecast, retail m-commerce sales will reach $558.29 billion in the US, accounting for 7.4% of total retail sales and 44.6% of total US retail ecommerce sales in 2025.

As more people shop online using their mobile devices, customers expect convenience, instant access to information, and the ability to discover new products. They also expect any mobile shopping experience they have to be relevant to them. 

Brands that sell through a mobile app can use behavior analytics and customer data to send users push notifications for limited-time sales, promotions, or launches. The notifications are designed to provide users with relevant offers and get them to spend more time shopping through the app. 

Brands can also use mobile app notifications to personalize the shopping experience and make it more convenient for customers. Shoppers can receive instant notifications when their items have shipped, unique discount codes, and exclusive content from loyalty programs. 

Mobile push notifications can increase app engagement by up to 88%. They draw disengaged users back in as well, with 65% returning to an app within 30 days of the push notification. Of course, to avoid spamming customers with notifications, offers need to be personalized and relevant.

Baby brand The Honest Company has an intuitive app customers use to order more products, access discounts, and get first dibs on new additions. By collecting data from the app, Honest Company can better segment their audience and further personalize marketing campaigns. 

Facial recognition technology

Brands with physical locations are using facial recognition to personalize the in-store customer experience. While not long ago the idea of facial recognition technology in retail stores sounded dystopian, the tech is now booming.

In 2023 the facial recognition market was valued at $6.15 billion, and experts predict it will grow to $7.09 billion in 2024 at a CAGR of 15.3%.

Facial recognition applications can monitor foot traffic, evaluate average shopping time, and analyze customer behavior. 

Using this technology, brands can get accurate demographic information about customers and build better product placements. When facial recognition identifies a customer, the retailer can analyze their in-store behavior by tracking their movements. 

Here are a few use cases for in-store facial recognition technology: 

• Self-service shopping: Facial recognition lets brands provide a fully automated self-service experience. Shoppers simply need to approach a self-service booth and the technology will recognize their appearance and tap into any previous preferences or requests.
• Sales notices: The tech recognizes a shopper’s face via a camera set up at the entrance of the store and advises the store associate about the shopper’s preferences, demographic history, and purchase history. Team members can then use this data to offer personalized product recommendations. 
• Impression time: In-store cameras can track how long shoppers spend looking at products, and retailers can analyze the data to understand whether a product is appealing or not. 
• Virtual try-on: Customers can virtually try on cosmetics products or clothing.
• Automated ads: An entrance camera takes customer images and shows personalized advertisements based on the user’s facial and demographic analytics. The customer can then respond to the ad and head to a row of products. 

Women’s apparel brand Ruti uses opt-in facial recognition technology to personalize the in-store customer experience. When shoppers first walk into a Ruti store, cameras scan and take photos of their faces. Upon customer approval, the images and items related to the purchase are stored in the retailer’s customer data platform.

Using an AI-powered platform built on internal customer relationship management (CRM) software, Ruti offers personalized recommendations based on each shopper’s style preferences and size. This data ultimately helps designers and in-store stylists identify which clothes are most likely to be flattering on shoppers. 

“When customers come into the store now, we can recognize them and we will have all this information that tells us this customer, for example, hates fitted tops or clothing—she just likes everything loose,” says Ruti founder Ruti Zisser in an interview with Retail TouchPoints.

“She loves to buy more colorful apparel, or even wants to gain approval from a friend due to her styling choice. We look for any information that can make the customer feel more comfortable about their purchase. It just makes the lives of everyone that works for Ruti much easier, and customers feel much better,” says Ruti.

Personalization best practices

Successfully implementing personalization hinges on prioritizing your customer base. Any time you request data or personalize messaging, people need to understand the reason and value behind your request. If you can show customers that their personal data helps you provide a seamless experience, they’ll be more likely to consider engaging with your brand. 

Consider these three points before you get started with personalized marketing strategies: 

Be personal without being creepy 

As consumers become increasingly concerned about their privacy, it’s important that brands respect customer preferences along with global restrictions. Most consumers won’t share their data if they feel it’s unnecessary. Including too much personal data in customized communication can make consumers feel stalked by brands, and can also strip marketing and shopping experiences of their diversity, leading to a homogenous experience. 

Save personalization for times when it really makes a difference, such as during support calls and in-store experiences, to keep personalization feeling helpful. Avoid over-delivering personalized ads at too frequent—and annoying—of a rate. And make sure to leave enough room for customer discovery—many customers love to go on their own journey.

Any personalization methods you choose to implement should be opt-in only, to allow customers the chance to say no. Whether you’re using facial recognition applications, brand loyalty programs, or AI-driven product recommendations, you need to get customer consent first. 

Brands need to build consumer trust first 

Before personalizing all messaging, brands should focus on building customer trust. Sometimes personalization is best left to post-purchase, or at least once you have a relationship with customers. 

When consumers feel they can trust a brand, they’ll be more likely to lean into sharing their data. Brands can build trust by providing a top-tier user experience and reliable support that’s available when customers need it. 

Protect customer data 

When you collect and store customer data, it’s vital to follow solid data protection procedures. Customers want to know how brands use their personal data—and they want to make sure they’re using it responsibly.

As privacy concerns grow, reassure your existing customers that your brand is taking a safe and responsible approach to managing their data. Ask customers to opt-in to personalization campaigns and make sure they consent to their personal data being used by your company. 

According to research done by Cisco, 94% of organizations say their customers won’t buy from them if data isn’t properly protected.

Using data without customer permission can land your business in hot water with the law and also cause customers to stop purchasing––both of which are detrimental to any brand’s reputation and growth. 

Remember to only collect the customer data you need, and provide consumers with a copy of your data privacy policy. Make it easy for customers to opt out of personalization at any point. When customers feel confident that your business takes a responsible approach to their data, they’ll be more likely to share information and opt-in for personalized messaging. 

Deliver outstanding customer experiences and tap into personalization trends in 2025 

Personalization trends show that customer expectations are only set to grow in 2025. As shoppers continue to seek out the best of physical and online retail, brands will need to find new ways of personalizing in-person and digital experiences. 

Find what level of personalization your audience is comfortable with, then build a strategy to interact with them at all stages of the customer journey.