eCommerce Personalization: The Ultimate Guide
Customers literally have hundreds of choices when it comes to buying products. In the world of online retail, eCommerce personalization is key to standing apart from the competition. Nearly 50% of consumers say they’ll spend more money with a brand that personalises their eCommerce experience.
Big names like Amazon are leading the way and, in order to maintain loyal customers, other brands are following suit.
What is eCommerce personalization?
eCommerce personalization is when an online store delivers unique, customized content to its users in real-time. This means your store or promotional messages will look slightly different for each visitor.
What they see will depend on their past behavior, personal details, and which eCommerce personalization tactics are being used to target them. Brands use carefully crafted dynamic content to present different information to different segments of their audience.
When Amazon suggests products that complement what’s already in your shopping cart, that’s eCommerce personalization. When eBay asks if you want to buy something again, that’s personalization based on your previous behaviour. And when Target sends birthday discounts to its loyalty program members, that’s personalization using your personal details.
At its core, eCommerce personalization is all about presenting customers with the right information, deal or product at the right time. By personalizing the consumer journey and presenting relevant content, eCommerce merchants can engage with more shoppers and streamline their path to conversion.
Whether the objective is to nurture repeat purchases, encourage cross-selling or simply help customers find products faster, personalization in eCommerce should lead to more sales.
Ways to personalize eCommerce
eCommerce personalization comes in many forms. While any content can be changed, some of the most common customizations include:
1. Product recommendations – on a home page or at the bottom of product pages:
Some people assume we only talk about email when we speak about personalisation. But having your website content personalised too is a surefire way to success.
Think about your homepage, product pages and checkout. Are they personally curated for every visitor? They should be tailored around their buying habits and increase conversion rates by giving an end-to-end personalised experience from email to check out.
And, who does this better than the retail giant itself, Amazon. According to research by McKinsey, a mind-boggling 35% of Amazon’s sales come from recommendations. They group recommendations by:
- Frequently bought together
- Customers who bought this also bought
- Compare to similar items
- Recommended for you
2. Cart abandonment emails and other messages:
A good personalisation engine can turn your abandonment cart rate into positive conversions to influence the bottom line. As a shopper, wouldn’t you like to see a personalised email reminding you of what you considered purchasing in the first place, and why?
Email Recovery Campaign. It’s absolutely critical to understand that email re-marketing is one of the most effective practices to get customers to return to your site, in the hope to convince them to complete their original purchase. But, just like in any email campaign, you need to consider the content, timing, and yep, you guessed it: Personalisation!
Some other methods include
- Promotional offers and coupon alerts
- Customized pop-ups
- Suggested blog, videos or user-generated content
However, this is just the tip of the iceberg. Some leading brands are even creating custom showrooms and shopping experiences. So how do you manage to do this?
Before curating content, you need to segment your audiences. You can do this based on a variety of different traits, including:
- Browsing behaviour
- Previous actions and past purchases
- Quizzes and questionnaires
- Demographics – age, ethnicity, race, gender, sexuality, income, education, employment and marital status
- Psychographics – interests, opinions, habits and values
Crucially you’ll also need to know when a particular user is browsing your site, or have the ability to reach them with a message. To do this you must be able to capture their email address to add them to your database.
The benefits of eCommerce personalization
In the past, beloved brands had friendly staff who directed customers to products and shared their professional recommendations. In the case of luxury retailers, like Selfridges and Bloomingdale’s, personal shoppers even helped affluent customers find suitable buys.
Online, these kinds of streamlined and seamless experiences are being emulated to satisfy customers and drive conversions. Best of all, in the digital world, they can be made available to absolutely everyone.
Here are some other benefits that come from personalization in eCommerce:
1. Personalization pleases customers
The likes of Facebook, Google and Amazon established personalized content – and it’s proved popular. Their users stay entertained, engaged and waste less time scrolling through irrelevant information.
As a result, the public now expects this level of customization across the web. In fact, research indicates that 80% of consumers are more likely to shop with brands that offer personalized experiences. Another survey also suggests that shoppers spend more when they receive targeted recommendations. When they don’t, this leads to frustration for 71% of them.
2. It increases conversions
According to a survey by Econsultancy, companies who personalize the online experience see online sales increase by an average of 19%. Similarly, figures from McKinsey say personalization at scale lifts revenue by 10-30% – all while cutting marketing costs.
While the exact figures vary, there is no doubt that personalization in eCommerce has the potential to significantly boost your bottom line.
3. It drives word-of-mouth marketing
A study by research company Forrester suggests that 77% of consumers are more likely to recommend brands that offer personalized services and experiences. The same people said they’re willing to pay extra for them too!
This means eCommerce personalization will give your customers the confidence they need to recommend your brand to a friend.
eCommerce personalization examples
While it may be a struggle, personalization technology is coming on in leaps and bounds – especially since attention turned to online experiences during the pandemic. To inspire your strategy, here are some top eCommerce personalization examples from big brands.
In 2018, Walmart redesigned its website with eCommerce personalization in mind. Since then, it’s online sales have skyrocketed and this is partly thanks to the changes it made.
First of all, its store takes into account where a shopper is located and presents them with what’s trending in their area. This makes sense because when sunscreen is selling fast in Florida, it might not be needed in Minnesota.
Walmart also provides product recommendations based on device type. Shoppers on mobile are presented with extra product recommendations and a simple, one-page checkout. This is the brand’s way of combating the reduced product discovery that comes with small screen sizes.
Finally, Walmart’s new store also personalizes product suggestions based on individual behavior. It takes into account searches, purchases and what other shoppers tend to buy with the product they’re looking at.
Walmart’s loyalty program also gives it an edge when it comes to eCommerce personalization. This personal data provides them with everything they need to create a highly bespoke customer experience.
Online fashion retailer Asos is a master of eCommerce personalization. The infobar on its homepage changes to match the behavior of each visitor. For example, newcomers to the site are offered an introductory discount code.
When you click to leave the site, an exit intent pop-up also appears suggesting that you sign up for email updates about the brand you just viewed. It’s an enticing offer and pretty convenient too!
3. Stitch Fix
Stitch Fix’s whole business model is based around personalization. It asks shoppers to answer a bunch of questions in return for curated fashion suggestions.
It asks for details like gender, age, zip code, measurements, style and favorite fashion brands. Then, it uses AI technology to present you with a selection of curated clothing. Other retailers like Mercado Libre and El Corte Inglés also use similar technology.
4. The REI Co-op
On its home page, this outdoor brand presents returning visitors with products based on their past browsing behavior.
Newcomers to the site see generic ‘Top sellers’ and ‘Crowd favorites’. Whereas, someone who has clicked through to view cycling shoes will see similar and complementary products, which aim to help them find exactly what they’re looking for.
Other brands, like Forever 21, take a similar approach to eCommerce personalization. This is a very simple technique but it means that repeat visitors to your store see many more relevant products. And this means they’re much more likely to convert.
Ultimately, eCommerce personalisation leads to better relationships with customers, enhancing your customers lifetime value. CLV is one of the most important eCommerce KPIs companies often forget. Yet, marketers have been talking about how important knowing CLV is for years! A 2018 UK study found that only 34% of marketers they surveyed were “completely aware of the term and its connotations”.
By measuring customer lifetime value in relation to the cost of customer acquisition (CAC), companies can see how long it takes to recoup the investment required to earn a new customer.
How exactly do you measure it?
- Identify the touchpoints where the customer creates the value
- Integrate records to create the customer journey
- Measure revenue at each touchpoint
- Add together over the lifetime of that customer.
It’s clear that a whole range of factors impacts the CLV. But one thing that holds them all together is a great personalised experience. If you can ensure your customers have a great experience from the moment they land on your site to the moment they receive your product to their door, you stand a very good chance of ticking all the CLV boxes.
eCommerce personalization doesn’t have to be complicated but, to get it right, you really need to know your audience. So make sure to conduct interviews, run surveys and develop accurate customer personas. Then, you can carefully implement personalized content in a way that fits with your eCommerce conversion funnel.