The Importance of Personalization in Online Retail

The CIQRA team29 September 2026 7 min read

Personalization in online retail means using what you know about a shopper, such as what they browse, buy, search for or tell you directly, to show them more relevant products, content and offers. It matters because shoppers now expect it: in McKinsey's Next in Personalization 2021 research, 71% of consumers said they expect companies to deliver personalized interactions and 76% said they get frustrated when that doesn't happen. Done well, and with consent, it lifts revenue and repeat purchases; done carelessly, it erodes trust and can break privacy law.

What personalization means in an online store

Personalization is not one feature. It is a set of decisions about which shopper sees what, and on what basis. In practice it shows up in a few recognizable places:

  • Product discovery: search results, category sorting and "you may also like" recommendations that reflect what a shopper has viewed or bought.
  • Messaging: emails and notifications triggered by behavior, such as an abandoned cart, a back-in-stock item or a replenishment reminder, rather than the same newsletter for everyone.
  • Offers and loyalty: rewards, points and promotions that recognize returning customers.
  • Context: language, currency, shipping information and content that match where the visitor is and what they came for.

It helps to separate two kinds of personalization. Contextual personalization uses what is happening in the current session: the page, the search term, the cart contents, the visitor's language. Profile-based personalization builds a picture of a person over time from past behavior. The second is usually more powerful, but it is also where most of the legal and trust questions sit, because it amounts to profiling.

What the research shows

The most widely cited study remains McKinsey's Next in Personalization 2021 report, published in November 2021. Its main findings:

  • Expectations are high. 71% of consumers expect personalized interactions, and 76% get frustrated when they don't get them.
  • It influences buying behavior. 76% said receiving personalized communications was a key factor in prompting them to consider a brand, and 78% said such content made them more likely to repurchase.
  • It is linked to growth. Faster-growing companies drive 40% more of their revenue from personalization than their slower-growing counterparts.
  • The lift is real but bounded. Personalization most often drives a 10 to 15% revenue lift, with company-specific results ranging from 5 to 25% depending on sector and ability to execute.

Note what the 40% figure does and does not say. It compares the share of revenue that fast growers attribute to personalization with that of slower growers; it does not mean that personalizing adds 40% to a store's sales. The 10 to 15% range is the more realistic planning number.

More recent data points the same way. Twilio's 2024 State of Customer Engagement report, based on surveys of more than 4,750 B2C executives and over 6,300 consumers in 18 countries, found that consumers spend an average of 54% more on brands that personalize experiences, yet only 16% of brands have the customer data they need to do it. Twilio Segment's 2024 State of Personalization report, a survey of 521 business leaders at companies with more than 500 employees, found that 89% believe personalization is crucial to their business's success over the next three years, and 61% are concerned that inaccurate data could undermine AI-driven personalization.

The common thread: the upside is established, and the constraint for most retailers is not ambition but clean, usable, permission-based data.

Privacy, GDPR and consent: where the limits are

Personalization runs on personal data, so for shoppers in the EU it sits inside a clear legal frame. This is general information, not legal advice, but these are the main rules every retailer should know.

Cookies and trackers need consent

Under Article 5(3) of the EU ePrivacy Directive, storing or reading information on a visitor's device, which covers most cookies and tracking pixels, is allowed only with the user's consent, given after clear and comprehensive information about the purposes. The exception is storage that is strictly necessary to provide the service the user asked for, such as keeping items in a cart. Behavioral tracking for recommendations or ad targeting is not strictly necessary, so it needs consent first.

Shoppers can object to marketing profiling

Article 21(2) of the GDPR gives people the right to object at any time to the processing of their data for direct marketing, including profiling related to that marketing. Once they object, the data must no longer be processed for that purpose. Your personalization setup therefore needs a working off switch per customer, not just a policy page.

Automated decisions with significant effects

Article 22 of the GDPR gives people the right not to be subject to a decision based solely on automated processing, including profiling, that produces legal effects or similarly significantly affects them. Ordinary product recommendations are unlikely to reach that bar, but take more care with automated decisions such as refusing someone a payment method or setting individual prices.

Trust is the practical limit

Beyond the law, there is a line shoppers draw themselves. Recommendations based on what someone just did on your site feel helpful; messages that reveal you know things they never told you feel intrusive. A good rule: personalize with data the customer would reasonably expect you to have, and be able to explain in one sentence why they are seeing what they see.

Practical first steps

You don't need a data science team to start. A sensible sequence for a small or mid-sized store:

  1. Get consent right first. Use a consent banner that actually blocks non-essential trackers until the visitor opts in, records the choice, and passes the consent state to your ad and analytics tools. Everything downstream depends on this.
  2. Start with contextual, first-party signals. Good on-site search, sensible related-product blocks and the right language and currency need little or no profiling and work for anonymous visitors.
  3. Automate the obvious triggered messages. Abandoned-cart reminders, order follow-ups and review requests are personalized by nature because they respond to what the customer did. Make sure marketing messages respect opt-in and opt-out.
  4. Reward returning customers. A loyalty or points program gives customers a reason to identify themselves, which builds your first-party data with their knowledge.
  5. Measure against a control. Test one change at a time and compare conversion, average order value and repeat purchase against a group that did not see it. Use the typical 10 to 15% lift as a sanity check on any promise you hear.
  6. Review data quality regularly. Duplicate customer records, stale segments and broken tracking quietly degrade personalization. Clean data beats clever algorithms.
  7. Keep an off switch. Make it easy for customers to unsubscribe and to object to profiling, and make sure your systems honor it.

How CIQRA fits

CIQRA includes several of these building blocks. Its cookie consent banner, available in 40 languages, lists the cookies used on your site automatically, records consent and sets no tracking cookies until visitors opt in; it passes the right consent state to ad platforms through Consent Mode v2 and honors the Global Privacy Control browser signal. In the store, product search returns results as you type and forgives typos, and cart-recovery emails and loyalty points are built in, with product reviews and Q&A from Shop Advanced.

FAQ

Is personalization legal under GDPR?

Yes, when it has a lawful basis and respects user rights. In practice that means consent before non-essential cookies and tracking, clear information about how data is used, and honoring objections to marketing profiling under Article 21.

How much revenue does personalization add?

McKinsey reports that personalization most often drives a 10 to 15% revenue lift, with company-specific results between 5 and 25%. Results depend on your sector, data and execution, so test against a control group.

Can a small store personalize without much data?

Yes. Contextual personalization, such as relevant search results, related products, triggered emails and the right language and currency, relies on the current session and the customer's own actions rather than a detailed profile.

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The CIQRA team

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