ImagegeneratedbyAI.

2025edition

TheBCGPersonalizationIndex?Report

HowcustomerengagementischangingacrossindustriesintheageofAI

23

BCG

BostonConsultingGrouppartnerswithleadersinbusinessandsocietytotackletheirmostimportantchallengesand

capturetheirgreatestopportunities.BCGwasthepioneer

inbusinessstrategywhenitwasfoundedin1963.Today,

weworkcloselywithclientstoembraceatransformational

approachaimedatbenefitingallstakeholders—empoweringorganizationstogrow,buildsustainablecompetitive

advantage,anddrivepositivesocietalimpact.

Ourdiverse,globalteamsbringdeepindustryandfunctionalexpertiseandarangeofperspectivesthatquestionthe

statusquoandsparkchange.BCGdeliverssolutions

throughleading-edgemanagementconsulting,technologyanddesign,andcorporateanddigitalventures.Weworkinauniquelycollaborativemodelacrossthefirmand

throughoutalllevelsoftheclientorganization,fueledbythegoalofhelpingourclientsthriveandenabling

themtomaketheworldabetterplace.

IncludedinThisReport

01

WhatistheBCGPersonalizationIndex??

02

PersonalizationTrendsand

Opportunities

03

Learningsfrom2025

PersonalizationLeaders

04

AcceleratingYourPersonalization

Efforts

AbouttheBCG

PersonalizationIndex?

Wesurveyed200marketers,

actedasmysteryshoppersto

observehowcompaniesdelivered

experiencesacrosschannels,and

performedafinancialanalysisof

theimpactofpersonalizationoncompanies’growthandshareholderreturns.Wedeveloped,tested,andrefinedtheindex’srubricinternallyatBCGandinourworkwith

hundredsofclients.Ituses

objectivequestions,whichallowsscoringtoremainconsistent,

whethertheassessmentwas

conductedbysomeoneatBCGorbyclientsthemselves.

Whatispersonalization?

Tobeclear,personalizationisn’tassimpleasautomaticallyplugging

customernamesintoemails.Truepersonalizationrequirescreating

experiencesatscale,thatgetfine-tunedwitheachsuccessive

interactionandempowercustomerstogetwhattheywant—faster,

cheaper,andmoreeasily.Doingsorequiresdeliveringonfiveimplicitpromisesthatshapecustomers’expectations:

12345

EmpowermeKnowmeReachmeShowmeDelightme

45

1

EmpowerMe

HowdoestheBCG

PersonalizationIndex?work?

FivePromisesofPersonalization

2

KnowMe

EmpowerMe

3

1

ReachMe

2

KnowMe

ReachMe

ShowMe

4

4

3

ShowMe

5

PersonalizationIndex?Introduction

Personalizationleadersstartbyasking,"HowcanImakethecustomer’sexperiencebetterby

personalizingit?"Theyunderstandcustomers’uniqueneedsateverystepoftheirjourneyanddecidehowpersonalizationcanbesthelpthem.ThisisthemostimportantcomponentofthePersonalizationIndex?.Todeterminethisscore,weusemysteryshoppingactivitiesandcustomersurveystoassessthelevelandqualityofpersonalizationthatcompaniesaredelivering.

Personalizationleaderswintheircustomers’trust;theyaregrantedpermissiontosecurelycollecttheirdataanduseinsightsculledfromittoimprovethecustomerexperience.Here,welookatthe

numberanddepthofdigitalrelationshipsacompanyhaswithcustomersanditsabilitytoretainthem.Wealsolookatthematurityofitscustomerdatamanagementandidentitymatching.

Havingthedatatoknowthecustomerisnotenough.LeadersuseAItoidentifytriggerstoreachout,

suchaswhenacustomerbrowsesonlineormakesaninquiry.Moreover,theyinvestinorchestratingtouchesacrosschannelsandusesmartfrequencymanagementtoensurethattheirtouchesarecoordinated,

notoverwhelming.Toassessanorganization’smaturityinthisarea,weexaminethesophisticationofits

targetingintelligence,howadvanceditsexperimentationcapabilitiesare(asmeasuredbythevolume,speed,andscaleofitsexperiments),andhowwellitorchestratesactionsacrosschannels.

Personalizationleadersbuildandmanagerobustcontentlibrariesthattheytailortotheunique

needsofeachcustomer—whilestayingtruetotheirbrandvoice.Todothis,manyareleveraging

generativeAItoolstocreatecontent.Toevaluatecompaniesonthispromise,welookedathow

sophisticatedtheircontentcreationandmanagementcapabilitieswereandhowwelltheypersonalizedtext,images,andvideosforindividualcustomers.

Personalizationleadersadoptagilewaysofworkingtoacceleratethetestingandlearning

DelightMe

5

thatimprovetheintelligencebehindeachcustomerinteraction.Truepersonalizationrequiresthat

thequalityandvalueofcustomerexperiencesbecontinuallyfine-tuned.Ourresearchshowsthat

thedelightmepromiseisthehardesttodeliveron.Itrequiresrelentlessexperimentation.Wemeasurethespeedandscaleofthecompany’stest-and-learnprocess,thesophisticationandautomation

DelightMe

6

7

ofitsmeasurement,andhowtheorganizationissetupforpersonalization—forinstance,theprevalenceofcross-functionalagileteams,aclearowneroftheinitiative,andcommittedfunding.

Includedinthisreport

01

03

04

WhatistheBCGPersonalizationIndex??

Learnings

from2025

PersonalizationLeaders

AcceleratingYourPersonalization

Efforts

02

PersonalizationTrendsand

Opportunities

89

WhyPersonalization?

Personalizationleadersconsistentlygrow10pointsfasterthanlaggards...

…positioningthemtocaptureanoutsizedshareofthe$2Tvalue

atstakeinthenextthreeyears

Long-termrevenuegrowthrate(CAGR)ofcompaniesinBCGPersonalizationIndex?

10%

8

6

4

2

0

10%

7%

4%

3%

0%

Bottomdecile

Bottomquartile

Topquartile

Average

Topdecile

2329496772

AveragescoreonBCGPersonalizationIndex?1

Estimatedgrowthrate,bysector,2023-2027($trillions)

2.0

1.5

1.0

0.5

0.0

0.12.0

0.1

0.2

0.2

0.3

0.3

0.6

Fashion,

Luxury&

Retail2

Travel&

Hospitality

Health

Care

Telco&

Media

B2B

Distribution

RetailTotal

Banking

Beauty

leaderstolaggardsandmultiplyingbyindustrymarketsize.

1.Compoundannualgrowthrate,representing2018-2023growthforpubliclylistedcompanieswheredatawasavailableandexcludingcompanieswithmajoracquisitions.Note:N=118.Source:BCGPersonalizationIndex?research,2023

10

11

2.Note:GrowthinvaluewasdeterminedbycomparingthecalculatedgrowthratesofpersonalizationGrowthreflectsa5-yearperiod.

Source:BCGPersonalizationIndex?research,2023

WhyPersonalization?

Customerswant—andexpect—personalization...

andexecutingpersonalizationrightempowersthemacrossthejourney

Percentageofcustomerscomfortablewithcompaniesusing

publiclyavailableinformationtocreateacustomizedexperience3

96

908682828179

757473

UKUSJapanAustralia

IndiaChinaBrazilFranceGermanySouth

Africa

Customer

JourneyStep

%surveyrespondentscitingpersonalizationasimportant4

ExtremelyimportantImportant

Learningaboutnewproducts/services

62%

29%33%

Awareness/Acquisition

Consideration/Pre-Purchase

Selectingthespecificproducts/servicesIwanttobuy

32%

34%

65%

Purchase/

Experience

Purchasingfromacompanyforthefirsttime

25%

28%

52%

RepeatPurchase/

ServiceandSupport

Repurchasingfromacompany

29%

34%

64%

Retention/Loyalty

Joiningacompany’sloyaltyprogram

32%30%

62%

12

3.Surveyquestion:Howcomfortableareyouwithcompaniesusingpubliclyavailableinformationaboutyoutocreateacustomizedexperience[Selectallthatapply]

Source:2023BCGCustomerPersonalizationSurvey

4.Surveyquestion:Ingeneral,howimportantisitforcompaniestouseyourdataandpastbehaviortocustomizeyourcustomerexperienceduringthefollowingactivities?

Source:2023BCGCustomerPersonalizationSurvey,n=5000

13

WhyPersonalization?

Top-RankedBenefitsfromPersonalization—%SurveyRespondents

Value

32%

“Iwasabletofindthebestpriceforme”

Joy

31%

“Itmadetheexperiencemoreenjoyable”

Convenience

31%

“Itmadetheexperiencefasteroreasier”

Navigation

22%

“Ithelpedconnectmetotherightcustomerservicerepresentative”

Assortment

18%

“Ithelpedmelearn

relevantinformationaboutthebrandorproducts”

LinkbetweentheBCGPersonalizationIndex?andCustomerSatisfaction

80%

CustomerSatisfactionScore

HighestPersonalizationIndex?

brandstendtohavehighestcustomer

60%

satisfaction

40%

20%

PersonalizationIndex?

0%

32486480

Personalizationgoesbeyond

transactions—forcustomers,it

createsvalue,convenience,andjoy

14Source:2024BCGCustomerSentimentsurvey

Brandsthatdeliverarerewardedwithhappiercustomers,strongerrelationships,anddeeperloyalty

Source:YouGovSatisfactionScore2023;BCGPersonalizationIndex?research,202315

Includedinthisreport

01

WhatistheBCGPersonalizationIndex??

03

04

02

Learnings

from2025

PersonalizationLeaders

AcceleratingYourPersonalization

Efforts

PersonalizationTrendsand

Opportunities

1617

LearningsfromLeaders

PersonalizationMaturityStagesDistributionofPersonalizationMaturitybySector

100

PersonalizationIndex?Score(%)

80

60

40

20

0

Only10%ofcompaniesqualifyaspersonalizationleaders

Butthereisalargegroupofbrands

withsomethinginplace—sonot

startingfromscratch

MinMedianMax

DigitalNatives

Retail

Fashion&Luxury

Travel&Tourism

FinancialInstitutions

Healthcare

Starting

thejourney

Basic

personalization

Advanced

personalization

Connected1:1experiences

B2B

0255075100PersonalizationIndex?Score(%)

Acrosssectors,mostcompaniesarestillinastageofbuildingandscalingcapabilities—butleadersareemerging

Startingpointsvarywidely—andsodothepathstoscalepersonalizationmaturity

1819

LearningsfromLeaders

2021

SampleReportCardofanIndustryLeader

Dataandintelligence

Integrated

datasourceswithstitchedcustomerdatafor360view

Automated

dataingestionandtransformation

100s

ofadvanced

analyticsmodelsfullyinplaceforpersonalization

4+

channelswithseamless

orchestration

Experimentation

4

differentmethodsofexperimentation

Customer

levelincrementalityreadavailable

101–1,000

experiments

executedaweek

1–3days

tomeasurea

businessKPIofapersonalizationcampaign

CreativesandOpmodel

1:1

creativevariantsavailableper

customer

>90%

ofcreatives

templatized

Extensively

personalized

creativecontentincommunications

1–2weeks

tolaunchanewpersonalized

experienceorcampaign

Leadershaveinvestedincapabilitiesthatpoweran

always-oncycleoflearning,testing,andimprovingthecustomerexperienceacrosseveryinteraction

CommonBarriersPreventingCompaniesfromReachingThisState

Siloedoperatingmodelrequiresnumeroushandoffs

LimitedMarTechorlackofintegrationrequiringmanualwork

Creativedesignspeedandflexibility

Lackofcommonunderstandingsurroundingpersonalizationacrossthecompany

Lackofcentralizedcustomerdataacrosstheorg

Compliancereviewsarelengthy/requiredforeachuniquecontentcombination

LackofFTEoragencyresources

Dataquality

0%10%20%30%40%50%60%70%80%

Themostadvancedpersonalizationprogramsweren’tbuiltovernight.Theystartedbyaddressingcommonpain

points—andchartingapathotherscannowlearnfrom

Includedinthisreport

01

WhatistheBCGPersonalizationIndex??

04

03

Learningsfrom2025

DigitalNatives

Retail

Fashion&LuxuryTravel&TourismHealthcare

B2B

02

AcceleratingYourPersonalization

Efforts

PersonalizationLeaders

PersonalizationTrendsand

Opportunities

FinancialServices

2223

24ImagegeneratedbyAI.25

LearningsfromLeaders|DigitalNatives

SectorSpotlight:DigitalNatives

Orchestratingseamlessjourneys—from

sign-uptoeverydayuse,upgrades,

andsharing

KeyChallengesandOpportunities

focusshiftstodeepening

engagementand

monetizingecosystems—ads,subscriptions,loyalty,andnewservices—withoutcompromisingexperience.

ExpectationsAreHigh,andSoAreCosts

BalancingInnovationwithResponsibility

PlatformsCompetingonDeepeningEngagement

Asmatureplatforms

saturatecoremarkets,the

Userswantfrictionless,real-time,hyper-relevantexperiences.Butscalingpersonalizationacross

massive,global,multi-productenvironments

comeswithmassivedataandcontentcosts.

GenAI,identitygraphs,

andrecommendation

enginesofferupside—butbringrisksaroundbias,consent,andconsumerfatigue.Theopportunity?Makepersonalizationfeeluseful,delightful,and

trustworthyagain.

LearningsfromLeaders|DigitalNatives

Whatdoesbest-in-classpersonalizationlooklikeforDigitalNatives?

uber

Personalizedads

(leveragingrangeofservice—Eats,Rides—totriggerpromptsbasedonhistory,location)

自spotrty

Personalizedcontent

todrive1PDcaptureandGenAIvirtualassistants(DJ)toelevateexperience

NETFLIX

Personalizedtrailersanddynamicsizzles

with1M+variations

2627

RangeofservicestodrawfromforPersonalizedAds

Curatedplaylistsbasedonlisteningpatternsandtailored“daylists”basedontimeofdayandday

oftheweek

AIDJcuratingmusic,basedonmusicprofile,supplemented

withtailoredvoiceovers,funfactsaboutartists,albums,andsongs

Personalizedviewing

experienceinthemobile

appbasedonpriorviewingandfavorites

AI-drivendiscoveryofnewcontent

Gamifiedpartnerad

targetedtocustomers

takingUberstolocal

sportingevent(“free

Coke”iftheirteamwins)

27

LearningsfromLeaders|DigitalNatives

Whataresamplewaystoelevatethecross-channelcustomerexperienceforDigitalNatives?

Discover

Personalizedadsfocused

oncross-sellandamplification

Onboard

AI-enabled“demos”basedoninitialbehavior

Activate

Personalizedbundles/benefits

Amplify

Sharewithfriends

Loyalty

Gamifiedmilestonesandrewards

Increasedacquisitionandreactivationefficiency

Higherconversionthroughcontextualengagement

Increasedreferral

volumeandviralreach

Higherengagementfrequency

andlong-termretention

Increasedaverageordervalueatpointofpurchase

2829

Impactfrombest-in-classpersonalizationinDigitalNatives

$1B

inannualcostsavingsbyenhancinguserretentionthroughAI-powered

personalization

80%

increaseinclick-through

ratesthroughpersonalizedadvertising

30ImagegeneratedbyAI.31

LearningsfromLeaders|Retail

SectorSpotlight:Retail

KeyChallengesandOpportunities

Creatingconnectionateverystep—

fromdiscoverytopurchase,delivery,

andre-engagement

MarginPressureMeetsInnovationDemand

ExperienceExpectationsOutpacingLegacyTech

landscape,withnew

entrantsandprice-

sensitiveshoppers

drivingupcompetition.

Discretionaryspending

istightening,andbrand

loyaltyisincreasinglyfickle.

CrowdedMarkets

Retailersarebattling

forshareinasaturated

Risingcostsacrosslabor,

logistics,andinventoryaresqueezingmargins.Atthesametime,retailmedia

andpersonalizationatscaleofferapathtomoreefficient,higher-returnmarketingandmerchandising.

Shopperswantcurated,seamlessjourneys

acrossdigitaland

physicaltouchpoints—

butmanyretailersstill

operateonfragmentedstacksandrigid

promotionalplaybooks.Privacyexpectationsarealsoevolvingfasterthancompliancesystems.

LearningsfromLeaders|Retail

Whatdoesbest-in-classpersonalizationlooklikeinRetail?

sweetgreen

Personalizedordering

oswiggy

Gamifiedoffers

Quickcommerceand

micro-segmentedassortments

UniqueClubcard

dealsandchallenges

Personalizeddashboardwithstatusandtailoredoffersbasedondistancefromnextvoucherand/orreward

ExactrightSKUsstockedin“darkstores”toserve

tailoredneedsofeachneighborhood;personalizedappenablesdriverstopickSKUsinunder2minutesand

findcustomerspreciselyandcustomerstoordereasily

Enhancedcustomerexperiencestreamlinedorderplacementbasedonsavedpreferencesaswellaspersonalizedrewardsforrepeatorders,withrapidfulfillmentofcustomizedsaladordersenabledby“InfiniteKitchen”

3233

LearningsfromLeaders|Retail

Whataresamplewaystoelevatethe

cross-channelcustomerexperienceinRetail?

Discover

Exclusiveorearlyaccess

tonewproducts

Explore

Inspirationalcontentpersonalizedforindividualmissions

Post-Purchase

Customersurveysandsupplementarycontent

Re-Order

Tailoredinterfaceforloyalty

members(e.g.,re-orderreminders)

Buy

Personalizedpromotions

basedonengagementbehavior

Increasedmedia

efficiencyandreachquality

Higherconversionthroughmission-basedrelevance

Increasedbasketsizeandreturnoninvestmentfrompromotions

Improvedsatisfactionandreactivationintent

Higherfrequencyandmemberretention

3435

Impactfrom

best-in-class

personalizationinRetail

+8%

increaseinloyaltymemberspend

3-5x

ROIfrom1:1offersvs.masspromotions

36ImagegeneratedbyAI.37

LearningsfromLeaders|Fashion&Luxury

SectorSpotlight:Fashion&Luxury

Elevatingmomentsofinspiration—from

stylingideastopurchaseandloyalty

KeyChallengesandOpportunities

casual,hybridlifestyleare

reshapingwhatcustomers

value—andhowtheyshop.Legacybrandsnowfacethechallengeofmaintaining

long-termbrandvitality

andaspiration,while

deliveringshort-termresultsinanenvironmentwhere

heavypromotionnolongerdrivesloyalty.

RedefiningLoyaltyThroughDigitalRelationships

FromMasstoMicro

FromHeritagetoHeadwinds

Direct-to-consumer

disruptorsandamore

Modernluxuryconsumersexpectpersonalized

clienteling,experientialperks,andtailoredoffers.

Butin-storeanddigitaljourneysoftenremaindisconnected—and

loyaltyprogramsstillfeeltransactional.

Asfashioncycles

accelerateandtradewars

putpressureoncosts,

brandsarere-lookinga