Personalization

Personalization software collects consumer information for e-commerce companies so that the businesses can tailor communications with their individual customers. Interactions between company and customer are altered, or personalized, to fit consumer preferences, which the customer either offers voluntarily or which businesses silently collect as they record and analyze the behavior of visitors to their Web sites. According to the industry-backed Personalization Consortium, personalized technology has three aims: to better serve customers by anticipating their needs; to make business interactions with customers “efficient and satisfying”; and to build relationships that encourage customers to keep conducting business with e-commerce sites. However, despite their promise for merchants, there are serious privacy concerns connected to the growing use of personalization technologies.

Personalization has become increasingly popular among businesses as a competitive tool in a glutted e-commerce market. BusinessWeek, for one, has said that personalization is the one thing that can distinguish business conducted online from more traditional means of commerce: “Personalization may represent the best chance for survival by online merchandisers in the ongoing Internet shakeout,” the magazine said in an August 4, 2000, report. Forrester Research, meanwhile, issued a May 1997 report titled “Personalize or Perish?”

According to an August 28, 2000, New York Times article, dot-com executives tend to equate Web personalization with the old-fashioned proprietor who knew how much money a particular customer could spend, what size shoes his kids wore, and what kinds of shirts he liked. As practiced on the Internet, personalization means tailoring Web pages in ways meant to appeal directly to an individual customer's tastes, as opposed to indiscriminately displaying the same basic page to everyone who visits the site. The concept is closely related to “one-to-one marketing,” which has also gained prominence in the digital age.

In his 1995 book Being Digital, MIT Media Lab director Nicholas Negroponte was among the first to describe the potential benefits of personalization. He used the example of how newspapers could use digital technologies—he dubbed them “personal filters”—to attract readers. According to Negroponte, personalizing a newspaper would be a simple matter of refashioning it to match the way that readers already use them, by emphasizing news items that are of great interest to individual readers while relegating less-interesting material to secondary status. Someone might be willing to pay a newspaper like the Boston Globe more money for less information, Negroponte guessed, if personalization software made it possible for the reader to receive only the news desired, while eliminating the clutter. Meanwhile, thanks to its reader's stated preferences, a personalized digital newspaper might be aware that a business trip to London is being planned, so it would serve up relevant U.K. hotel and car-rental information. Negroponte called this scheme for a personalized newspaper The Daily Me.

Web sites like http://My.Yahoo.com and http://Excite.com have offered something similar to Negroponte's model for several years. These portal sites often allow users to receive quotes from their stock portfolios, local weather reports, regional sports news, and other news items that are listed according to reader preferences. However, in the industry vernacular, this kind of personalization has come to be known instead as “customization,” because it usually involves options or preferences selected by the users from a pre-set list.

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