Convenience Over Privacy: Balancing Privacy and Personalization Across Generations

Abstract

In today's data-driven environment, the collection and analysis of personal data has become easier than before, where consumers commonly face tradeoffs between information disclosure and the benefits it provides. One such benefit is the personalization of consumer experiences. Although consumers are starting to expect more personalization, individuals are becoming increasingly concerned about how their personal information is being used, making them hesitant to disclose personal information, creating the privacy-personalization paradox. By focusing on the elements impacting privacy-related decision-making and the attachment theory, this study aims at answering two research questions: “How does the privacy-personalization paradox present itself amongst Generation X and Generation Z?” and “How does customer-brand relationships play a role in the formation of the privacy-personalization paradox amongst Generation X and Generation Z?”. The thesis was conducted through an exploratory interview study with a qualitative approach. To concretize the privacy-personalization paradox Spotify was used as a mediator, where 20 interviews were conducted with Swedish Spotify users in the age groups Generation Z and Generation X. The findings suggest that the privacy-personalization paradox presents itself differently between the two generations, where Generation X has its foundation in privacy concerns, whereas Generation Z stems from a dislike of personalization. Further, it was found that customer-brand relationships do not play a role in the formation of the privacy-personalization paradox. However, it influences how consumers perceive privacy, where strong relationships potentially mitigate initial privacy concerns, but not necessarily leading to a preference for personalization. The managerial implications of this paper emphasize the importance of understanding that generational differences can help companies similar to Spotify effectively manage the privacy-personalization paradox and enhance customer-brand relationships. Further, as the privacy-personalization paradox is a somewhat unexplored phenomenon, this research contributes to existing literature by highlighting the complex dynamics between consumer behaviour and the privacy-personalization paradox. More specifically the interplay between generational differences and customer-brand relationships.