Unlocking Success: The Power of eCommerce Personalization Today
Fun fact: Did you know that the genesis of eCommerce dates back all the way to the 1960s? If you know that, kudos to you. If you didn’t, welcome to the club.
While its history goes all that way back, eCommerce took its first major steps in the 1990s and 2000s. This was the period where corporations like Amazon, eBay, and PayPal came onto the scene.
In the past 2 decades, eCommerce has blown up to unforeseeable proportions. In 2023, global retail eCommerce sales reached an estimated 5.8 trillion U.S. dollars. Further projections indicate a 39% growth in this figure over the coming years, with expectations to surpass 8 trillion dollars by 2027.
It is easy to see that eCommerce has completely taken off in recent years. This has made shopping as easy as a click of a button (literally), and will continue to be as or if not more convenient moving forward.
However, let’s go back about a decade or so before the explosion of eCommerce. Customers used to walk into stores to find a (friendly) clerk who could help them find what they wanted. If they needed something, if they had questions, or if they wanted to hear their thoughts on certain products, they could approach the store clerk.
In the eCommerce landscape now, while the convenience is undisputed, the shopping experience differs vastly. And to many, this is a major detractor for eCommerce and a reason why physical stores will forever remain popular.
This is where eCommerce personalization comes into play. While the physical experience can never be replicated, personalization has become increasingly popular for eCommerce brands to improve the shopping experience.
So what exactly does eCommerce personalization entail?
eCommerce personalization refers to any number of ways an online store customizes the browsing and buying experience to fit the user. It is the practice of using data to understand your customers so you can offer experiences that are so relevant and contextual, they feel like magic. Personalization can be based on data like past purchases, browsing history, personal demographics, and expressed preferences.
eCommerce personalization is cross-channel and is driven by real-time data. This data can include, but is not limited to, a customer’s previous purchases, browsing behavior, geographic location, language and other personal information. Personalization can encompass anonymous as well as known customers.
Personalization can be done across various touch points. That includes the likes of messages, content, site layouts, products, and more. What you wish to personalize is in the palm of your hand, it all depends on what you wish to achieve and what data you can procure.
How does personalization help your business?
Better customer experience
Personalization enables you to provide offerings that will make the digital shopping experience significantly better. This can be done through curated product recommendations, promotions and offers, and more. In doing so, not only are you helping customers see what they want to see and allow them to buy what they want.
It also serves to help narrow down their choices, helping them declutter the plethora of products. Nearly 40% of consumers have left a website because they were overwhelmed by excessive options.
As a business, particularly if you have a wide variety of products catering to different demographics, it is essential to provide a website experience that lets customers filter content and see curated recommendations. Having to manually sift through an entire catalog of options will only make the experience a negative one.
Increased customer loyalty
Consumer loyalty is vital. It’s one thing to try to bring in new customers, but it’s another to keep them coming back. Businesses can try to increase loyalty through loyalty cards, programs, improving your product, elite customer service, and more.
These methods are great, and personalization can lift them to a whole new level.
The best loyalty programs, such as rewards programs, offer personalized rewards rather than generic points redemption. For example, customers interested in a specific product line should receive rewards within that product category.
Another example could also be looking at the customer’s purchase information. Customers can also be rewarded for higher levels of loyalty (eg: X number of repeat purchases within 60 days or an order value of a certain amount).
These examples are but some of many use cases of personalization to drive loyalty.
Higher conversion rates
Take a look at some of these statistics.
According to McKinsey, 78% of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience.
Similarly, Epsilon stated that 80% of shoppers are more likely to buy from a company that offers personalized experiences.
These are some of the many statistics that showcase the fiscal benefits of implementing personalization. it not only helps your customers achieve their goals while engaging with your brand, but can also align with your business goals when the right strategy is in place. A personalized experience can lead directly to KPIs like increased conversions, average order values, and revenue growth.
The playbook: How can your business personalize to optimize
Prerequisites to eCommerce personalization
- Collect data
The very first thing is to collect data—begin to learn about your consumers, the very heart of eCommerce personalization. The more you know about your users, the better equipped you are to personalize content for them.
You can gather data from various touch points and sources, be it website interactions, post-purchase surveys, social media, and so on. This can come in the forms of zero and first-party data.
- Segment your audience
By organizing your audience into smaller segments, you can group customers with similar needs together. Segmentation can be performed based on demographics, purchase behavior, or whatever information your business deems important.
In doing so, you are able to execute personalization to the best degree. You can create targeted marketing campaigns or provide them with the specific experiences they’re looking for.
Planning out the personalization roadmap for your business
With the data collected, it’s now a matter of putting it into practice.
Collecting data may appear daunting to some, particularly to smaller businesses who perhaps don’t have much access to customer data. It is wise to first check what kind of data your business already has access to so as to not have to spend unnecessary resources.
Firstly, you need to establish your business goals when it comes to personalization. You can evaluate which touch points you can personalize, which you want to personalize, and so on. This will set the precedent for what data you would need to do so.
From analytics dashboards and tools inside your platform such as Shopify, to applications you currently use, these are the first data sources you should take a look at. Evaluate your business and what platforms you are currently using to see what kinds of data you have access to.
Should they be insufficient, it will then be important to consider the next steps to take to gather the data you need. You can consider a variety of options like CRM platforms, marketing automation platforms, post-purchase surveys, and more to collect the data.
Examples of personalization
- Personalized product recommendations
Improve your eCommerce personalization strategy by displaying recommended or similar products to the one your customers are looking for. By doing so, you’re providing your customers with easy-to-access information, improving their overall eCommerce customer experience.
- Dynamic content creation
With the data you’ve collected, customize website content based on user preferences and behavior.
Let’s say you collected data using a post-purchase survey. You asked the question “Who is this purchase for?”, and found out that a lot of your customers are buying your products as a gift. With this data, you have a greater understanding of your customers. This could signal to you to perform more festive promotions, or to target that segment of customers with gift-specific messaging.
This can be done in the form of ad campaigns, or even personalized banners, messaging, and offers to different segments of customers.
- Email personalization
Another form of personalization could be through the use of emails. Having understood your consumers better, craft personalized email campaigns based on customer data and behavior. This could be done to promote certain products and campaigns, providing specific offers and discounts, and more.
Similar to the point above, use dynamic content to tailor email content to individual segments of recipients.
Drawbacks to eCommerce personalization
As with all things in life, eCommerce personalization is not without its drawbacks.
The first would be the problem of privacy. Personalization involves collecting and using personal data about website users in order to tailor the content and experience to their individual preferences.
While this can be helpful and improve the user's experience, it can also potentially invade the user's privacy if not implemented carefully. This is because collecting and using personal data can reveal sensitive information about a user, such as their location, browsing history, and purchasing habits.
It's important for companies to be transparent about their data collection practices and to obtain the user's consent before collecting and using their personal data. They should also implement measures to protect the security of this data and to ensure that it is only used for the purposes for which it was collected.
This can be avoided by using trusted sources of data. An example of this would be with zero-party data. This is data that is willingly provided by your consumers themselves, which thus implies that there is no invasion of privacy.
Another issue would be the unintended alienation of segments of the audience. As mentioned earlier, one of the key prerequisites of personalization is creating segments. While personalized content can be beneficial for some users, it can also potentially alienate segments of the audience if it is not broadly applicable.
For example, if a website only shows content to users that is relevant to a specific age group or geographic location, it may exclude users outside of that group and make them feel like they are not being considered.
Also, by alienating certain users, it has the potential to reduce the number of respondents. This means that not only is the quality of your data impacted, but the quantity of it as well. This leads to lower response rates and thus lesser data for your business to utilize.
To avoid alienating segments of the audience, companies should be mindful of the potential limitations of their personalization strategies and consider how they may be excluding certain users. They should also strive to create a diverse range of content that is broadly applicable to as many users as possible, and not hyper fixating on a specific group.
One more issue would be with decreased authenticity. Ironically, we set out on this journey of personalization to try to mimic the customer experience of shopping in-stores. But in this journey, it’s easy to fall into the trap of digitalization and the unintended lack of authenticity.
This is because personalized content is often created or chosen for the user based on algorithms and data, rather than being selected by a human editor who has a personal stake in the content. This can make the content feel less genuine and human, and it can also make the website feel less personal and less connected to the user.
To avoid this issue, companies should consider incorporating elements of authenticity into their personalized content. This can include featuring real people in their content, using a personal tone in their writing, and highlighting the human effort that goes into creating and curating the content. By doing this, companies can create a personalized experience that feels more genuine and human.
eCommerce personalization in application: Examples done by big businesses
Take a look at what some familiar brands are doing to personalize their customer engagement and help drive their business.
- Amazon
Amazon offers personalized product recommendations even if a consumer is a first-time visitor or has been shopping with Amazon for years. For new website visitors, Amazon has sections like “Products you’ll like” and “Most people bought” to show popular location-based products, new products, and products on sale.
Meanwhile, returning shoppers will see sections like “Pick up where you left off” or “Gift ideas inspired by your shopping history” to handle browser abandonment within the website. Amazon analyzed their data and found that a customer will be far more likely to make a purchase when the platform recommends these products a customer has already browsed (especially if they have viewed more than 4 products in one category).
- Tortuga
Tortuga has a variety of products for their customers to choose from, inclusive of various backpacks and accessories. Their products can cater to daily or travel needs, and can be used in numerous ways.
They released a ‘Bag Finder Quiz’ aimed at helping customers discover what products are suited to their needs and interests. This is an excellent alternative for customers who are usually only afforded pictures of the products. The usual journey is reliant on customers making their choices off photos and simple descriptions, which lacks any personalization whatsoever.
This allows customers to also interact with and find products that fit their specific needs or desires. By embedding an interactive quiz as a prominent feature on the homepage, this is a dynamic approach to eCommerce personalization. By asking targeted questions and collecting valuable insights, Tortuga is able to better understand their customers' preferences and recommend products or services that meet their unique requirements.
One of their ways to gather data to perform personalization, Tortuga uses Fairing to collect key zero-party data for consumer insights. They have also used this data for their business to get a clearer understanding of their customers, which helped drive their marketing and business efforts. Learn more about this here.
- Old Navy
When a shopper visits Old Navy’s website, Old Navy uses data about their product page views and any products that were abandoned at checkout to put together a personalized “wish list” of products.
They retarget via emails with personalized product recommendations so as to try and win some of those shoppers back.
- Dick’s Sporting Goods
Dick’s Sporting Goods uses its website visitor’s locations to feature product recommendations that are tailored to their specific interests. This adds a layer of social proof – the recommendations get personalized by showing products within a range of categories the customer has viewed – note how they use “Hot in your area” and “Top-selling products.”
eCommerce personalization can be the key to unlocking your business. It is heavily used by many brands all around the world, even if you didn’t realize it. Use the steps and tactics mentioned above to implement it for your business today.
Interested to collect zero-party data for your business to perform personalization with Fairing? Click here to learn how you can set up your post-purchase survey!
