eCommerce personalization trends, stats and best practices
Smart eCommerce personalization begins with this checklist of must-haves to learn its benefits, create a fitting strategy, and see real brand examples.
Successful eCommerce brands know that there is no better way to make an online customer feel special than through a personalized shopping experience. This understanding is not limited to luxury brand marketers — most online merchandisers try to make their web visitors feel like royalty, and it works.
When a customer feels a connection to a brand, sales and loyalty both increase. eCommerce personalization can offer a slew of benefits that energize an existing customer base and increase profitability far more efficiently than trying to acquire new customers.
Almost 90% of consumers say that they are influenced by eCommerce personalization, and almost 90% of marketers say that eCommerce personalization has boosted revenues (source). Real-time eCommerce personalization obviously offers plenty of benefits.
Web personalization is key to eCommerce success, but remains a challenge
Despite all the benefits of personalization, more than half of online companies have yet to implement an eCommerce personalization platform. Why? Because real-time eCommerce personalization can get tricky, and there are many factors which require consideration:
- Data issues – limited data on new customers and an overwhelming amount of data for established customers.
- Results must be available fast – but must still be high quality. The system must respond to new input in real time.
- Effective personalization is mathematically complex – Determining statistical significance at scale and on a one-to-one level is a huge mathematical challenge.
- Legacy CMS and back office systems – represent a major roadblock for some businesses.
The bare necessities
Enterprise-grade eCommerce personalization involves several moving parts, requiring brands to connect, consolidate, analyze, and activate their data in real time. Though, this can only happen when the following technological components are present at the core.
Unified dataset. Information from every touchpoint along the customer journey must be made available to create a single source of truth from which to take instant action. Therefore, businesses employing several point solutions in the marketing stack should consider replacement with that of a holistic personalization platform, as essential data from these tools often get stuck in silos, making it nearly impossible to leverage.
Open architecture. Integration with various tools from the marketing technology stack, no matter what the vendor, should happen seamlessly to enable powerful personalization use cases. A high level of flexibility can reduce engineering time and generate a significant amount of value in new profit by accelerating a business’ rate of deployment.
Decision logic. Automation of analysis and delivery are necessary to increase efficiencies, scale operations, and ensure each customer receives the optimal experience. As the number of tests, variations, and segments increase along an experimentation roadmap, assessing the impact becomes an incredibly data-heavy task, a feat which can only be scaled with machine learning.
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How to win with eCommerce personalization
What are the primary things a business needs to consider before deciding on the right eCommerce personalization solution? Personalization technology selection means knowing what to look for and how it’s going to deliver on business goals. With so many possible implementations and a great deal of variation between the capabilities each can provide, getting answers to the questions below is absolutely critical to moving forward in conversations with a vendor.
Once the full extent of their capabilities are known, a proper evaluation can be conducted with all relevant stakeholders involved, including marketing, engineering, product, and analytics. After which, suitable options should be strongly considered and weaker ones eliminated.
Bonus 1: Use our practical vendor comparison table to easily reference the right questions and track answers during the evaluation process.
Choosing an eCommerce personalization platform
Here are some key considerations when choosing an eCommerce personalization platform:
Ability to act upon anonymous users
Software that facilitates website personalization for a first-time visitor to a site can partially compensate for the not-enough-data problem that new customers represent. The referring website is often a big clue as to the preferences of a first-time visitor. Third-party data from data aggregators can be used to round out the picture and help provide a new visitor with a welcoming experience.
Automated segmentation capabilities
A business that wants to target specific segments needs to think about what segments need to be defined and how to best appeal to those segments. Automated segment discovery tools are available that help identify segments and their attributes.
In a multi-channel world, any omnichannel personalization solution should be able to target the complete customer journey, across devices and channels. Desktop-only personalization ignores the ever-growing importance of mobile devices. The personalization system needs to be integrated in such a way that the brand has a unified view of its customer and can analyze customer behavior, irrespective of the channels it is active on. The customer also needs a unified and seamless experience when it accesses the site through different devices.
Holistic data-driven approach
A business needs to consider what kind of data is going to be most useful. What we think of first when we think of personalization is probably historical customer data. Third-party data can be just as valuable, however. ZIP codes, weather, and relational geography can be tremendously important. Shipping policies tailored for the shoppers’ specific location provides transparency while making shoppers feel welcome.
The ability to reconstruct site layout and structure, tailored for individual preferences, is one of the fundamental requirements of quality eCommerce personalization. What the shopper sees on each page should be based on cumulative knowledge about the shopper and the new information presented by current behavior; in other words, layout personalization should ideally serve the current needs of the shopper while taking into consideration historical preferences.
Automation capabilities, powered by manual control
An ideal eCommerce personalization software should have the ability to utilize both manual and automated algorithmic decisions. A/B testing‚ product recommendations, personalized offers – can all be done effectively when there is a great deal of flexibility in determining the strategy. Merchandisers should be able to utilize their vast knowledge through manual control, while automated algorithms can optimize marketing campaigns at scale.
An agile approach brings as much value to an eCommerce project as it does to any other project. Possibly more. Building a really effective eCommerce site involves a lot of testing and experimentation. No assumptions should be made and the site should be flexible enough to adjust as data is interpreted. Personalized shopping experiences translate into constantly adjusting customers’ eCommerce journeys as brands learn more about their customers and how to give them what they really want.
eCommerce personalization platforms need to allow brands to isolate individual customer behaviors in as much detail as needed. The more brands can micro target their audience, the more they can shape offerings to appeal to niche segments of their customer base. The ideal – though difficult to achieve – is one-on-one targeting, a eCommerce personalization software that can see customers as well-rounded individuals.
Flexibility at scale
Scalability is critical. A good eCommerce personalization tool needs to allow a business to take advantage of growing customer experience. The ideal personalization and conversion rate optimization solution should enable brands to present their content in whatever manner is going to be visually appealing to their target audience.
Your CX is only as good as the personalization partner you keep
While the right fit is heavily dependent on a vendor’s capabilities, many other important factors impact the decision to ultimately opt for one provider over another. Like whether or not the same vision for personalization is shared, a company’s future needs align well with the current product roadmap, proven use cases are available to demonstrate expertise in a given industry, and that the resources and infrastructure exists to support a growing program.
Technology is merely a vehicle through which customer experiences are formed. A true partner in personalization has the power to transform entire digital strategies, augmenting efforts in the development of new ideas and implementations, establishment of workflows and processes, analysis and refinement of campaigns, as well as the advancement of innovative initiatives.
The more informed about a vendor and how it operates, the greater the potential an original investment in personalization will be returned, and more importantly, produce dividends.
The importance of personalization in ecommerce
eCommerce personalization tools increase sales, customer engagement, and customer loyalty. 45% of consumers say they are more likely to shop on an eCommerce site that offers personalization. Setting up a truly effective personalized eCommerce experience may be seen as a complex proposition involving lots of moving parts, but with the right set of tools at hand, it is much easier to achieve.
Overall, eCommerce personalization is simply the only way to stay competitive in today’s fast-paced eCommerce environment, and luckily, it is always possible to start small.