DNA holds information about a living organism. It carries genetic data, and all the instructions that a living organism needs to grow, reproduce and function. While the use of DNA has been widely applied by biological and forensic institutions; in recent years, new ways of using DNA have started to emerge.
Across several industries, DNA testing is being leveraged for consumer personalisation and data capture. By sending a saliva sample to a lab for analysis, consumers can learn how their DNA influences their health and wellness. They can then share these insights with different companies in exchange for personalised products and services.
Industry research estimates that 26 million direct-to-consumer (DTC) DNA tests were purchased in 2019, with some predicting that within the next two years the number could increase to 100 million. This growth has been fuelled by the success of two companies; AncestryDNA and 23andme. It may also be a direct result of their advertising investment which has helped to increase public awareness and acceptance of DTC-DNA testing. In 2016, AncestryDNA spent $109m on TV and other ads, and 23andMe invested $21m in media ads in the US.
Whether used alone or in combination with other digital technologies, several companies are using DTC DNA data to create value across three key areas:
1. Empowering healthcare and wellness
As the health and wellness industries continues to expand, DTC DNA-testing can increase consumers awareness of their health and well-being. For instance, they can identify predispositions to certain conditions, such as coeliac disease or lactose intolerance. It can also encourage consumers to be more proactive about their lifestyle choices, without relying on a healthcare provider.
Take, for example, Nestle’s Wellness Ambassador initiative. Launched in Japan in 2018, Nestle provides DNA-personalised products and wellness recommendations to help consumers live a better life. The programme offers personalised supplement capsules such as nutrient-rich teas, smoothies and vitamin-fortified snacks to improve longevity. Combining this solution with wearables technology such as Fitbit or Strava, presents new possibilities to redesign consumers’ ongoing healthcare plans.
2. Creating bio-personalised experiences
DTC DNA testing enables engaging experiences which are unparalleled against traditional means. This is because it reveals something new about consumers. Learning about genetic composition is one of the key reasons people take DTC DNA tests, and this curiosity has contributed to a rise in hyper-personalised experiences across many sectors.
Airbnb partnered with DTC DNA company 23andMe, to provide heritage travel recommendations based on the customer’s unique genetic code. The online home rental marketplace created dedicated pages that corresponded with 23andMe’s ancestry profiles. This allows travellers who visit the Airbnb site to plan a trip in context of their own roots. For example, someone with Mexican roots can find a page on Mexico highlighting key experiences such as places to visit, the history of the city/country and any culture experiences to take part in.
3. Simplifying the purchase-decision journey
Like traditional personalisation techniques, DTC DNA testing can make the purchase-decision journey more seamless and informed, by offering a niche list of suitable products. A strong, yet unique aspect of DNA data is that it delivers a stronger sense of reliability and compatibility, which goes beyond any circumstantial digital data, such as contextual and purchase history.
In 2019, L’Oréal announced a partnership with biotech company uBiome to provide personalised skincare product recommendations based on an assessment of a user’s skin health. This studies an ecosystem of microbes, bacteria, viruses, fungi, and other microorganisms.
When it comes to skincare, consumers typically spend from 45 minutes to 1.5h selecting a skincare product, and they often trial several products to determine what works for their skin. Here, DTC DNA-testing helps consumers not only move away from a one-size-fits-all approach, but also simplifies the consideration and conversion stages in a traditional purchase-decision journey.
Why should companies focus on DNA personalisation?
Companies that embrace DNA-based products and services have the opportunity to identify and create new consumer segments based on over 125 genetic data types that typically cannot be obtained through traditional and digital activities. This includes data, which is based on ethnicity composition, hair texture/thickness, taste sensitivity (e.g. salt, sweet and bitter), face shape and skin condition. The question is who will master in this next wave of bio data?
Offering products and services through DTC DNA-testing may require adapting cultural norms, business operations, and changing core processes such as marketing, manufacturing, and research and development. Capabilities in DNA-testing along with product development, and advanced analytics will be required. However, it is likely no one player will have the expertise in all off these areas.
DNA data- how can it be secured?
Broadly, we know that people like personalisation – and they are often willing to pay more for a personalised product or service. Nevertheless, delivering bio-personalised products will not be without its challenges.
Consumers can change passwords, cancel credit cards and delete online browsing behaviour to protect their private data, but it is near-on impossible to change their DNA. This means that consumers may feel uneasy about this imposition of personal data.
Although DNA data that consumers share with genetic testing companies is private for now, current protocols do not protect against several vulnerabilities. For example, users can download their personal reports and upload their private DNA data to public databases. As a consequence, this reveals the identity of relatives who may have not taken a genetic test.
In Capgemini’s internal peer-to-peer research and survey we learned that 58% of individuals would take a DTC DNA test to learn something new about their health, wellness or heritage profile, but only 26% would be willing to provide this type of personal data to healthcare or insurance companies. This reinforces the concerns around data sharing via the exploitation of legal loopholes.
To ensure compliance in processing and sharing genetic data, and to address privacy concerns, companies will need to proactively involve both the consumers and the regulators at every touchpoint from R&D to Marketing.
Most companies believe in the power of digital innovation to change the nature of the customer experience. DTC DNA testing can be one of these potentially transformative capabilities when applied to the right use cases. Questions about market risks, scalability, speed-to-market, and the pace of adoption mean that there are still years’ worth of work and research to be done. In joining the DTC DNA testing debate, we can contribute to shaping the future of personalisation and customer experience.
Rita Batalha, senior consultant, Capgemini
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