Navigating the Personalization Paradox: Pathways to Consumer Engagement Through Loyalty and Avoidance in the Digital Era

Abstract This study investigates the dual dynamics of personalized marketing -personalized brand loyalty (PBL) and non-personalized brand avoidance (NPBA) – and their influence on customer brand engagement (CBE). It addresses the “personalization paradox,” where strategies aimed at improving engagement may provoke resistance. Furthermore to testing direct relationships, it is evaluated the mediating roles of PBL and NPBA in shaping consumer engagement. Data was collected via an online survey involving 406 respondents, analyzed using a PLS-SEM model. Constructs such as privacy concerns, personalization benefits, proactive avoidance, brand-created annoyance were modeled as antecedents of PBL and NPBA, which in turn were hypothesized to mediate their effects on CBE. The results reveal that personalization benefits positively impact both NPBA and PBL, while brand-created annoyance increases NPBA but does not influence PBL. Proactive avoidance drives NPBA without reducing PBL. Notably, PBL significantly enhances CBE, mediating the effect of personalization benefits, whereas NPBA shows no direct effect on CBE but partially mediates the impact of annoyance and avoidance. Some hypothesized paths (e.g. from privacy concerns to NPBA/PBL) were not supported, highlighting consumers’ growing tolerance toward data tracking when personalization benefits are evident.This study advances the understanding of the personalization paradox by theorizing and empirically validating the mediating roles of loyalty and avoidance in consumer-brand relationships It bridges theoretical frameworks and practical applications, offering guidance for brands to maximize engagement and loyalty while addressing privacy concerns and reducing avoidance behaviors.