Hyper-personalization in Retail: Strategy vs Morality

Oana Ciornei - Romania

Hyper-personalization is shaping the future of retail - fast. Consider Sephora: through AI-driven skin diagnostics, tailored product recommendations, loyalty data integration, and seamless online-offline journeys, the brand has transformed personalization into a core competitive advantage. Beauty is no longer just about product; it is about curated experience. 

And it is not just a technical question – but a strategic and moral one. 

Cloudy Tape Measure By Josh On Unsplash

Digital marketing is not the whole story

In October 2024, Polish Zabka Group began trading on the Warsaw Stock Exchange. It was the year’s fourth-largest offering in Europe. Zabka is just one example of how hyper-personalization can power dizzying growth. With 11,000+ stores in Poland, the group leapt from 0 to 100 Froo stores in Romania in the space of just a year – a rate of 1 every 3 days. 

Walk down a street in a Polish town and you’ll likely pass two Zabka stores in quick succession: one on a corner in a beautiful area near a park targeting the affluent; the other near a school targeting teenagers. How Zabka build their portfolio and the type of leaders they attract are a pure example of entrepreneurship, strong private equity, sound judgment - and a data-driven approach. 

Today, wherever you are, the contents of two shops from a single chain in one neighborhood can be so diverse that you could be forgiven for thinking they were run by different companies.  

Consumer goods companies are increasingly flexing to address specific niches – and it’s visible in their marketing. A recent Instagram post shows how easily a famous sugar-packed soda could be re-positioned as a healthy, hydrating sports beverage. Framing changes perception.  

For CMOs, digital marketing literacy is as important today as Excel competence was 30 years ago. It’s vital to balance global consistency and local customer responsiveness, building relevant, on-brand product portfolios. The real-time data capture and leverage this demands – as well as increasing automation - are intensifying the spotlight on CDOs (and AI).  

But spiraling digitization only underpins the need for purposeful brand strategy. Unfortunately, many digital marketers aren’t too clear on what that means. Their knowledge gaps aren’t helped by the centralization of strategic marketing roles. The same goes for procurement, narrowing the variety of local brands. Playbooks are issued by HQ for local markets (and marketers) to obediently implement. No wonder marketing executives have difficulty developing their strategic muscle, or grasping the ‘why’ behind the ‘what’. 

Cross fertilization 

There is positive news. So powerful is hyper-personalization that even highly-regulated industries are flocking to it, supported by cross-fertilization between sectors. Banks are forming strategic partnerships with consumer and retail companies, linking systems in marketplaces and offering discounts. Ecosystems that began life in consumer and retail are now expanding rapidly into other sectors. 

Cross-fertilization, data use and hyper-personalization are also reflected in how people function within organizations: we’re seeing heightened demand for teameffectiveness workshops. Here, data about themselves - personality, team dynamics - enable leaders to adjust their style to colleagues who are not like them. Personalized leadership feels natural and intuitive. It, too, is informed by data. 

Hyper-personalization is also showing up in board composition. Control and guidance aside, Boards typically focus first on relationships and networks, then on functions - audit, investment, finance, people - and then committees. But today, the customer voice is of rising importance. We recently conducted a board selection for a client serving consumers across the CEE. Only one sitting board member had experience in the region. The firm had realized this needed to change - the board must mirror the customer base.  

Ethical questions 

Technically speaking, hyper-personalization is not unethical. Nor is it wrong to reposition brands to serve valid new niches. But is this morally legitimate, if it means fundamentally manipulating the consumer? Are people sufficiently educated to understand that corporates are using trending (and personal) data to push their purchases? The 2025 Edelman Trust Barometer reveals worryingly low trust in corporates: 68% of people (an all-time high) think business leaders knowingly emit falsehoods or gross exaggerations.  

How long will consumers be willing to continue using Machiavellian brands? The omnipresence of digital only emphasizes the need for ethical, purposeful and wise leadership. For deep strategy, rather than light-handed tactics.  

In the scramble to grow fast, respond and adapt, leaders must never lose their moral compass. Brand value can only be secured through the big values. Perhaps this is why Zabka Group’s corporate culture and operations have four watchwords: ambition, responsibility, openness and reliability.

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