Uncomfortably Yours: When Personalization Repels Customers

Abstract

Technological advances have enabled firms to personalize advertisements, recommendations, products, and services to individual consumers. This article shows that personalization can backfire when it embarrasses consumers. Study 1 demonstrates that consumers are embarrassed and respond less favorably to retailers offering a personalized shopping experience when they are purchasing a stigmatized product (weight-loss medication) but not when they are purchasing a neutral product (headache medicine). Study 2 similarly shows how personalization can backfire in the context of an online music streaming service; consumers respond less favorably to a service that recommends playlists associated with dissociative identities when they believe the recommendations were personalized. Lastly, Study 3 demonstrates this effect using a field experiment in which participants believe they are seeing a personalized or nonpersonalized advertisement evoking a stigmatized condition (poor skin) or positive condition (clear skin). When consumers received personalized product or service associated with a dissociative or stigmatized identity, they feel more embarrassed, which causes them to respond less favorably toward the business compared with if they had received a nonpersonalized product or service.