Managing the personalization-privacy paradox: A systematic literature review

Effective utilization of personal data contributes to greater customer satisfaction and provides a better fit between the offer and the customer needs, which can be leveraged as competitive advantage. However, consumers may be reluctant to share their personal information due to privacy concerns. This is referred to as the personalization-privacy paradox, and firms need to deal with the paradox to gain benefit of personalization. The purpose of this study is to provide further understanding of how to manage the personalization-privacy paradox of digital services. This study reviews privacy and personalization literature using a systematic literature review methodology. This study examines various theories and empirical findings to deconstruct the personalization privacy paradox and develops a conceptual framework of privacy decisions. This study also provides suggestions to manage the personalization-privacy paradox of digital services. The key to manage the paradox is to increase the value of personalized services and to lower privacy concerns, which are affected by the presentation of privacy policy, emotions and contexts.