As companies work to compete with one another to bring users and customers the best, most personalized experiences possible, they draw upon myriad data points to do everything from make product recommendations to help a customer understand whether they can pick up an order in store.
As they do so, some companies continue to look at ways to ingest more data, by gaining email addresses in exchange for discounts, by incentivizing loyalty programs with extra promotions and early access to new products and more.
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What a consumer buys—and where they buy it, in what size and color and more—can reveal information about what they might be inclined to buy next, and in an environment where consumers are hardly starved for choice, creating repeat customers continues to be the ultimate goal for many.
While some of the data companies use to bring consumers’ recommended products to life include their own first-party insights, other apps, services and sites often collect cookies on a user that can be stored and used to identify patterns about that person’s habits and history—and to predict what they might do next.
Among those services are banks and financial institutions. The data collected in tandem with these companies can be fed into artificial intelligence models, which can make decisions about which products a user should see next—whether because it resembles something they already purchased or complements an item they already own.
The Wall Street Journal reported that PayPal has updated its privacy policy to include caveats about using consumers’ data to personalize their experiences. The outlet stated the changes will take effect on Nov. 27.
“We may use insights from purchases and other behaviors on our and our partner or merchant websites or apps to develop product recommendations about products, brands, sizes, preferences and styles that we provide to our partners and merchants so that they can recommend relevant products to you,” the new policy reads.
Yes, that means PayPal may be monitoring the size of consumers’ waistlines.
While PayPal is exhibiting transparency in saying that it monitors and uses the size consumers order to change their online shopping experience, other payment companies also have clauses in their privacy policies about personalization.
For instance, Klarna’s privacy policy states that the company uses shoppers’ data to “personalize content and experiences, including providing recommendations based on your preferences and queries.”
While the company does not explicitly indicate that size is included in consumers’ preferences, it certainly could be.
Similarly, another buy now, pay later platform, Afterpay, states that it creates a user profile based on each consumer’s information.
“We create a profile about you and make predictions and inferences on what direct marketing communications we think you’d like to see from us when you are opted-in to receive such communications,” the company’s privacy policy reads, noting that, in order to build that profile, it ingests data about age, gender, location, purchase habits, preferred retailers, levels of engagement and more.
These three companies are far from the only financial services institutions that track consumers’ habits and report them back to retailers; the same often goes for credit issuers and banks. While the specificity with which they track items purchased may vary, a slew of institutions have sensitive data on hand about consumers’ purchase history.
The common thread between PayPal, Klarna and Afterpay is that, if desired, users are able to opt out of sharing sensitive data, like demographic information inferred by purchase patterns or size estimates based on previous orders.
However, as the quest to be superior to competitors continues to drive retailers, especially as AI’s capabilities get more refined, personalization has taken its spot at center stage.
While some companies use the insights to position certain products higher than others for specific users browsing their site, others use it to segment potential customers into groups to send marketing materials—emails, texts or social ads—based on their previous activity and information.
