It’s that time of the year, with festivities keeping us busy as we meet friends, and family with a bunch of gifts. No wonder this is also perhaps the busiest season for marketers who release advertising blitzkrieg, as they try to achieve two things: drive sales and brand recall. Interestingly, now amidst the traditional and digital marketing tactics, a new player has emerged: hyper-personalisation powered by artificial intelligence (AI) and data analytics. “Hyper personalisation is not essential for every category and neither can it be delivered by every brand. For really quality personalisation you need high-quality first-party data and a good hyper – hyper-personalisation platform – both of which are not accessible to most brands/categories. D2C brands with sufficient 1PD, E-commerce marketplaces etc are categories which can leverage hyper-personalisation in a meaningful way,” Anand Chakravarthy, chief growth officer, Omnicom Media Group India, told BrandWagon Online.
Many brands and categories are discovered or researched online where consumers leave behind digital footprints that can be leveraged for retargeting them – but this is not essentially hyper-personalisation. “I don’t believe that hyper-personalisation is necessary for the festive season for a brand to be successful and achieve its sales targets. As long as you are targeting the right audience with a good product proposition brands can sell, he added.
The key question, however, remains: Is this shift to hyper-personalised festive marketing truly worth the investment? More importantly, what are the benefits and risks?
Hyper-personalisation involves delivering tailored messages, product recommendations and offers to individual consumers based on their preferences, behaviours, and real-time interactions. While this approach has become more prevalent in the last few years, the application of AI to optimise and scale these efforts has transformed it from a novelty to a necessity. “By leveraging AI-driven hyper-personalisation, brands can cut through the noise and deliver tailored offers that resonate with individual preferences. As more consumers rely on digital platforms for shopping, brands must differentiate themselves by offering personalised experiences that speak directly to their needs, enhancing conversion rates during high-traffic festive periods,” Swagat Sarangi, co-founder, Smytten Pulse opined. According to a report by McKinsey, brands that leverage personalisation can boost revenue by 5-15% and improve marketing spend efficiency by 10-30%. This shift is particularly important during the festive season, when competition is fierce, and customer attention spans are short.
Key to festive marketing?
The sheer volume of options available to consumers today makes it difficult for brands to stand out. During festive periods, the noise becomes even louder, with every brand vying for a slice of consumer spending. Hyper-personalisation allows brands to cut through this noise by tailoring their messaging, product recommendations and offers to individual consumers. The relevance of hyper-personalisation lies in its ability to deliver what the consumer wants at the right moment, increasing engagement, conversions, and long-term loyalty. “Utilising data for personalisation helps understand customer needs and preferences, as tailored messages lead to more conversions and help brands stand out, attracting and retaining customers. Businesses can better forecast demand, leading to more efficient inventory management and higher AOVs. Hyper-personalisation facilitates quickly adjusting offers and messaging based on customer behaviour, maximising relevance and urgency,” Rishabh Sethia, director and business administrator, MARS Cosmetics, commented.
With consumers expecting highly tailored experiences, brands are increasingly adopting AI-driven strategies that analyse vast amounts of customer data in real time. “We understand that no two customers are the same, and by leveraging data and AI-driven insights, we can offer personalised recommendations and curated collections that resonate with individual preferences. This level of customisation enhances customer satisfaction, drives engagement, and ultimately boosts loyalty. In a competitive market, hyper-personalisation allows us to stand out by making every interaction with our brand unique and relevant, ensuring that we meet the diverse needs of our audience, both online and offline,” Sidhant Keshwani, Founder and CEO, Libas, added. Furthermore, 84% of consumers say being treated like a person, not a number, is very important to winning their business, revealed a report by Salesforce. However, there lies a thin line between hyper-personalisation and intrusion which brands need to tread carefully.
Is it worth the hpye it?
The big question for brands is whether the investment in hyper-personalisation, driven by AI and data analytics, is worth it. While the initial cost of implementing AI systems can be high, the returns are equally promising. Businesses using hyperpersonalisation report up to a 20% increase in customer satisfaction and up to 30% growth in revenue, reveals McKinsey. “Hyper-personalisation has been up to 20% more effective in driving ROI compared to traditional marketing, as it tailors content to individual preferences using data analytics and AI. While it may require an initial investment in technology, the cost efficiency and precise targeting it delivers reduce wasted ad spend by up to 50%, making it far more impactful than broad, traditional marketing strategies,” Drishti Madnani, co-founder, Shryoan Cosmetics, revealed.
During high-traffic periods like festivals, consumers are bombarded with offers and advertisements, but they tend to gravitate towards brands that speak directly to their needs. Hyper-personalisation, with its tailored offers and recommendations, can turn the casual browser into a buyer. 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalised service or experience, according to Ninetailed.
Trends will continue to come!
Several major trends are emerging in the adoption of hyper-personalisation and AI during festive marketing periods. First, there’s the shift from traditional, mass-marketing techniques to highly segmented and individualised campaigns. AI is enabling brands to create dynamic customer profiles based on real-time data, allowing them to craft ads, emails, and product recommendations that resonate with each consumer’s unique preferences. “Looking ahead, we anticipate even more advancements in real-time personalisation. Brands are getting better at understanding customer needs before they even recognise them. This evolution of hyper-personalization excites us, and we’re eager to embrace the opportunities it brings to enhance our customers’ experiences,” Sudip Ghose, founder and managing director, uppercase, said. Contextual targeting will tailor ads based on factors like location and current events, while interactive content, such as quizzes, will enhance engagement. Ethical personalisation practices will foster trust, and improved algorithms will provide better product recommendations. Social commerce will also rise, offering new ways for direct customer engagement, she added.
For small to medium businesses, the investment in AI-driven marketing infrastructure may seem significant upfront, but the long-term benefits far outweigh the costs. “AI allows businesses to optimise marketing spend by delivering hyper-personalised experiences that drive higher engagement, conversion rates, and customer loyalty. At Libas, we’ve seen how AI helps us anticipate customer preferences, streamline operations, and reduce waste by targeting the right products to the right consumers. This not only improves ROI but also enhances customer satisfaction. Over time, these efficiencies make the initial investment highly justifiable and a strategic advantage in a competitive market,” Keshwani added.
Another trend is the rise of AI-powered performance marketing, where brands use machine learning algorithms to optimise ad spending in real-time. “However, AI in marketing is nothing new and is not limited to the festive season alone. AI has been part of digital marketing for over a decade now and it is just the quality and capabilities of advanced AI algorithms which has improved over time. Given the media clutter during festive good innovations can help but do not need to be AI-driven – which has just become a ‘cool’ thing to do. During the festive season, we will see brands leveraging AI to create more consumer engagement, by deploying AI to create innovations -but often these are just gimmicky with little reach or impact,” Chakravarthy added.
Furthermore, 91% of consumers are more likely to shop with brands that offer personalised experiences, according to a study by Accenture. “Featuring strategically curated products based on user behaviour has a significant impact on product adoption rates and feedback loops, fostering long-term loyalty. Our AI creates custom or interstitial pages and facilitates live interactions to elevate personalisation for our audience. These efforts have significantly increased our customer engagement by 2x compared to the static pages,” Sarangi added.
While studies show that personalised marketing can improve conversion rates, does it foster genuine loyalty, or are consumers simply responding to discounts and convenience?
Privacy in reign or drain?
While personalisation can significantly enhance the customer experience, it also raises privacy concerns. 85% of consumers want more transparency around how their data is handled, according to a PwC survey. However, this can also be subject to the country’s digital consciousness. “ Currently the majority of Indians are not aware of the dangers of sharing data with different sites and Apps they use. A lot of education in this regard is essential. That said as long as Hyper personalisation helps give customers a better experience in their journey it is seen as a positive by them,” Chakravarthy highlighted. “Building customer trust is essential, as any mismanagement of data can result in backlash,” Sethia added.
For a hyper-personalised strategy to be effective, being on your toes is important. “Given that hyper-personalisation requires to happen in real-time and at scale, the only way to do this is through AI-based tools which can provide the accuracy and agility that good quality hyper personalisation requires,” Chakravarty noted.
Experts opine that offering the right products at the right time makes all the difference. Furthermore, personalised emails can generate up to six times higher transaction rates as compared to non-personalised ones, Epsilon revealed. The use of AI chatbots has also surged, providing real-time assistance to customers and helping them navigate through the purchase process. Brands like Nykaa and Tata CLiQ have adopted AI chatbots to handle customer queries, leading to smoother shopping experiences and higher conversion rates. “ We integrate with real-time data streams, ensuring that every customer interaction, whether on Amazon, Flipkart, or a Quick-commerce platform like Blinkit & Instamart is captured and analysed instantly. By utilising advanced segmentation and cutting-edge ad tech, we highlight specific products & campaigns that are resonating well with the target audience, driving up conversions during the critical festive period,” Meher Patel, founder, Hector, added.
A happy ending?
Hyper personalisation is an exciting area for marketing relevant for any point of the year and not the festive season and AI is a critical enabler of the same. One has to recognise that marketing is not just limited to online purchasers but also addresses a huge volume and a dominant volume of offline buyers. This is where hyper-personalisation has a limited role. For a vast majority of India who is still buying products – largely or only offline, Hyper personalisation is not only difficult to deliver but in most cases impossible. ‘Whether it is the festive season or otherwise, it’s important to recognise that hyper-personalisation is not practical for every single marketer or product category in a similar way,” Chakravarty commented.
At what point does hyper-personalisation shift from enhancing the customer journey to eroding trust and alienating consumers? Is there a tipping point where the desire for relevance becomes too invasive for comfort?