Impact of Personalization on Buying Behavior: An Empirical Study

Author

S. Lohith Kumar and K. Krishna Rao

Abstract

 Personalized marketing is characterized by targeting advertising and product recommendations based on customer data to maximize e-commerce purchases. This study examines the link between perceived personalization and buying behavior and compares the effect with brand trust and privacy concern, while controlling for age and gender. Online consumers (n = 171) participated in a convenience sample survey that used five-point Likert scales (Cronbach’s α = .82–.86) to measure the variables of interest. Data were analyzed using chi-square tests of independence, one-way ANOVA with Tukey post hoc comparisons and simple and multiple linear regression. Purchase frequency through personalized advertising was associated with age group (χ²(4) = 19.24, p < .001, Cramér’s V = .24), but purchasing after a personalized advertisement was not associated with gender (χ²(1) = 1.04, p = .307). Buying behavior differed across age groups (F(2, 168) = 6.86, p = .001, η² = .076) and purchase-frequency groups (F(2, 168) = 6.76, p = .002, η² = .075); post hoc follow-ups showed that 18–25-year-olds scored higher than older respondents and that infrequent buyers scored lower than the other groups. Perceived personalization alone explained 45.9% of the variance in buying behavior; adding brand trust and privacy concern explained 55.6% (adjusted R² = .548), with personalization (β = .54) and trust (β = .32) as positive and privacy concern (β = −.13) as a small negative predictor. The findings suggest that businesses should employ relevant personalization and transparent data practices.

Keywords

personalized marketing; digital marketing; buying behavior; brand trust; privacy concern; personalization–privacy paradox; regression analysis

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