3 Stocks to Benefit from the Hyper-Personalization Trend

Jeremy Flint

Thu, Dec 21, 2023, 5:02 PM 4 min read

As a broad example, when you see an ad on your social media feed for a product you’ve been thinking about buying, it isn’t listening in on your microphone. Instead, it’s using your search trends and digital footprint to develop a virtual “you” avatar that accurately predicts the products you like.

Since we increasingly opt-in to data collection, usually sold via rewards programs and similar incentives, we fork over our personal data and information in exchange for customized benefits. These stocks are some of the best at capturing that hyper-personalization trend and stand at the forefront of emerging marketing trends.

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Starbucks (SBUX)

the Starbucks (SBUX) logo on a sign outside of a coffee shop

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If you’re a Starbucks (NASDAQ:SBUX) enthusiast, you’re likely part of their robust rewards program. It offers points and incentives in exchange for the data that generates your customer profile. Included are vital statistics, preferred drinks, and the locations of your coffee purchases. If you get an annual free birthday drink from your Starbucks reward program, that’s a basic example of hyper-personalization. It leverages your unique user data to offer incentive to buy products.

But, Starbucks’s hyper-personalization tools are advancing, and the company is leveraging AI to drive customer experience. In the mid-2010s, SBUX deployed a personalization tool pushing over 400,000 customer-tailored sales emails weekly. Soon after, Starbucks pushed the software to its app, sending tailored notifications at opportune times with user-specific incentives to buy coffee.

The hyper-personalization trend is clearly benefiting Starbucks’ bottom line. Despite its standing as a discretionary stock, the company’s annual income points to strength regardless of economic conditions. This shows that, in part, its customization efforts help retain customers and keep them buying coffee.

Amazon (AMZN)

Closeup of the Amazon logo at Amazon campus in Palo Alto, California. The Palo Alto location hosts A9 Search, Amazon Web Services, and Amazon Game Studios teams. AMZN stock

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Amazon (NASDAQ:AMZN) is a hyper-personalization leader within eCommerce and digital retail.

But they’re taking it further and offering hyper-personalization as a B2B service. Amazon Personalize uses the company’s power back-end machine learning tools to help sellers integrate personalized recommendations into existing websites, applications, and emails.

In effect, this democratizes hyper-personalization. Many mechanisms driving tailored recommendations are heavy on hardware and coding requirements. So, Amazon’s service brings advanced tools to everyday sellers and small business owners.

The tool lets you input a series of training data, including customer profiles, sales information, and past marketing campaign outcomes. Then, you customize your model and tweak it according to your strategic marketing or sales goals. Finally, Amazon Personalize offers a specialized application programming interface (API). In turn, that lets you bring your model to life to guide customers along a sales funnel with tailored recommendations.

The service’s webpage lists a series of use cases and outcomes. Those include daily app usage increases, skyrocketing customer session durations, and growth in new product purchases. Amazon’s hyper-personalization service stands at the fore of a larger trend. Therefore, we can expect to see it accelerate as more businesses leverage the tool.

Facebook (META)

Threads app logo seen on screen. Instagram Threads app is a micro blogging platform, developed by Facebook Meta.

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Of course, Facebook (NASDAQ:META) is the top dog in social media hyper-personalization. Among its suite of social platforms, Facebook has far more data on you, your family, and your scrolling (and purchasing) trends than you can imagine. And, like Amazon, they’re offering B2B personalization tools via Facebook Marketing services to everyday sales and company owners.

In a poll, Facebook reveals that 52% of surveyed consumers expect brand promotions to be personalized. Yet, 73% don’t understand how their unique data drives that personalization. So, Facebook is putting data privacy at the forefront of its hyper-personalization initiative. This move is particularly critical as more countries enact strict data privacy laws. How this ultimately pans out isn’t yet determined. But Facebook’s position within hyper-personalization ensures it will likely navigate those waters successfully.

With more than 10 million active advertisers competing for market share across Facebook’s properties, personalization will be a hot topic for its sales and marketing team moving forward. Expect hyper-personalization trends on social media to further accelerate.

On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.