As generative AI continues its journey to becoming the number-one topic of discussion in business circles, it should come as no surprise that our 2025 CX trends report is heavily influenced by the technology. Its capabilities, especially its potential to level the playing field and enable small-to-mid-size enterprises to compete with the biggest brands in terms of customer service, cannot be ignored or overlooked.
Yet despite everything GenAI can already do and all the hype and hope about what it will be able to do next, the age of hyper-personalized CX is one trend you won’t find in this year’s report.
For over a decade, many in the industry and within the analyst community have heralded every year as the year of personalization or the year of personalization at scale. And while it’s true that organizations have never had more customer data and insights at their disposal and that even before GenAI’s explosive arrival, technological breakthroughs were moving the needle almost on a yearly basis. There are still a number of major challenges and technological limitations to address before hyper-personalization can happen.
1. The data dilemma: Personalization or privacy?
Any level of CX personalization is contingent on data. The more your organization has, the better it can serve its customers. But, just as with technological advances, each of the past years has seen an increase in awareness and concern over data collection and data privacy.
Consumers are less and less willing to share personal information. And, at the same time, governments are starting to enact stricter regulations regarding how organizations can collect and store data. It started with the GDPR and since those Europe-wide rules were established in 2018, similar rules and regulations have been adopted by a host of other countries, from Canada and New Zealand to South Africa and Brazil.
So, until organizations can hone an approach to data collection that balances personalization needs against privacy concerns, they will not be able to target and serve customers at the individual level.
2. Silos stifle insights
No matter how powerful an AI system, its ability to generate meaningful insights and recommendations is directly proportionate to the quality (not simply the quantity) of data at its disposal. And, of course, very few organizations can genuinely claim to be silo-free, to have no incomplete data sets and no issues regarding data consistency or format.
Hyper-personalization can only happen when data can flow through a company without silos or bottlenecks and when the organization can combine and analyze both structured and unstructured data formats from multiple sources, including those beyond the company’s internal systems.
3. The gap between vision and financial reality
Generative AI is advancing faster than any organization’s ability to build a business case for the technology’s use, integrate it into the business and measure the return on investment. And, in a moment in time when economic issues are making it harder to raise capital and investment, many companies do not have the available finances to adopt at scale or to commit to projects other than a proof of concept or a pilot study.
4. Moving customers from skepticism to confidence
For a product or service to obtain widespread approval, consumers need to trust and accept it. Many consumers are still skeptical about existing AI-powered recommendation engines that power e-commerce or streaming platforms. And with the growing use of generative AI, that skepticism can morph very quickly into suspicion and distrust.
There are understandable concerns that the technology can deliver biased results, is prone to hallucination, and requires ethical use and management. Any attempt to build a hyper-personalized CX will need to start with building trust and confidence with customers and being open and transparent about how AI is used, trained and managed.
5. Customers change quicker than algorithms
The only thing that’s changing faster than technology’s capabilities is consumer behavior. Even if there are observable patterns, no algorithm is currently able to accurately understand and always predict what every individual might want. Indeed, different emotional drivers, demographics, and cultural or geographical differences could mean that hyper-personalization will always be next year’s trend.
Generative AI holds immense immediate promise for organizations of all sizes that want to elevate the customer experience. And while we are indeed moving closer to creating more accurate and personalized experiences that better align with brands and customers, hyper-personalization is not one of our 2025 CX Trends.
But to discover how we do think gen AI will redefine customer experience over the next 12 months, read the report: “The 2025 CX trends report: From buzzword to business case.”