A shopper comes to your website and you (as a business) have 500 Christmas mugs you need to get rid of on Black Friday. If you featured the mugs to all of your visitors, it wouldn’t be targeting nor personalization because you’re hoping anyone will buy the mugs, instead of selecting an audience who would be more likely to. If you segment or ‘target” your website to feature the mugs toward a specific category of visitors, you are effectively trying to increase the likelihood that you will sell the mugs while striving to minimize a negative impact on other sales.
With personalization, you are curating the experience specifically to the shopper and trying to solve their need with your products. It’s reverse match-making. They are obviously browsing for mugs on your site. What can you offer them that relates to that? If they click on dishes, will you feature the plates you have on sale? Or would you feature mugs with other items shoppers who bought mugs also purchased. Likely you would opt for the latter and display a broader selection of your catalog and of course, those lovely mugs!
Targeting is different because it is focused on solving your business need instead of solving a customer need.
True personalization is customer centered – driven by customer needs – and aims to find the best fit for his or her individual needs. In contrast, targeting is business centered – driven.by business needs such as reducing inventory of some products. As such, targeting approaches matchmaking primarily from the business side, segmenting customers and seeking to reach those who are most likely to accept a specific product or offer.