What is Personalization in Ecommerce

In the past, companies common practices were mass production, consumption, and marketing. Nowadays, companies focus on niche markets, customization, and personalization.

Catering to individual’s needs has become so common that customers expect companies to meet their specific needs and get frustrated if they don’t.

The Personalization tool satisfies this rising need of individualization.

Personalization in eCommerce is the real-time tailoring of online customer experience to each specific shopper.

An eCommerce software generates personalization automatically and in real-time. Personalization in eCommerce has many applications, including the website, product recommendations, social proof notifications, and emails.

 

Why should you personalize?

Personalization creates a sense of individuality and uniqueness. Customers feel special and important, as though the company is paying particular attention to them. Moreover, by segmenting and targeting different shoppers, personalization answers each customer’s different needs, thereby optimizing customer experiences rather the same average experience to all.

Shopper value personalization. According to a study by Invesp, 53% of shoppers believe that e-tailers who personalize the shopping experience provide a valuable service.

Aberdeen found that 75% of shoppers favor brands who personalize their messages and offers. According to Smart Insights, 48% of consumers spend more when their experience is personalized. Janrain found that 74% become frustrated when brands provide irrelevant content to them.

E-marketers enjoy personalization’s benefits. Invesp found that 59% of marketers experiencing good ROI after personalizing their online store. According to Marketing Week, providing a personalized experience can improve conversions by nearly 8%.

 

How does the software personalize?

Which data is collected and used?

  1. General data about the user – their demographics, geo-location, the number of visits, etc.
  2. The intent of the customer – data collected about the visitor’s recent activity, overall shopping behaviors, past purchases and browsing history. This information indicates on the shopper’s preferences, affinities, and price-sensitivity.
  3. The wisdom of the crowd – aggregated data that makes correlations between people who bought similar items and the individual shopper, to create predictions based on big data.
  4. Customized set of variables – rules the company manually sets. For example, preferable categories to present, such as top sellers, items with a good click-through-rate and manually selected items.

 

What are the bases for segmenting?

  1. Demographics.
  2. Geo-location (country, weather, holidays).
  3. Time (of the month, week, day of browsing).
  4. Browsing device.
  5. New vs. Returning visitor.
  6. Social media attributes.
  7. Real-time shopper engagement (behavior onsite, preferences, viewed/put in cart/purchased in terms of brand, style, type, size, etc.).

 

Personalization Applications:

1. Website Personalization

What is it? Website personalization is the tailoring of a website’s dynamic content, message, visuals and offers to each individual shopper.

Where is it done?

Promotions and offers: personalize the offer itself, the amount of discount, the time limit if there is one, etc.

Modified content: personalize the copy, visuals, product recommendations and social proof notifications. Personalize the order of items displayed in categories when sorted by a general statement such as “best match”.

Add/eliminate content: such as auto-applying coupons and auto-filling some elements in the checkout form.

Why is it effective? A more personalized website creates a more relevant customer experience.

A higher relevancy results in higher visit duration, product views, site visits, average order value and revenue as well as reduce shopping cart abandonment. According to Barilliance, website personalization can increase conversions by as much as 30%.

 

2. Personalized Product Recommendations

What is it? Personalized product recommendations are items suggestions that are specifically relevant to each individual shopper.

The recommendations display the item’s name, image, price, colors and sizes available, social proof notifications (e.g. “2 more items left in stock”, “best seller”) and more.

The recommendations’ personalization is relevant to the shopper’s data and to the time it is viewed. On-site recommendations are generated in real-time engagement and email recommendations are generated when the email is opened. This way the recommendations are the most accurate as they match the dynamic shoppers’ preferences and items’ availability.

The types of recommendations:

Personalized general recommendations: new arrivals, best sellers, top rated, etc.

Similar items (upselling): items that are a better match to the visitor’s preferences and needs than items they’ve viewed, to increase the likelihood of a purchase.

Complementary items (cross-selling): items that are different to items they’ve viewed, to increase the average order value.

Recently viewed items.

Where is it done? On any page and any triggered email. You may also display more than one set on one page.

Why is it effective? Personalized product recommendations provide a shortcut to the most relevant items to the individual visitor at the right time.

Personalization is crucial, as Barilliance found that personalized “top seller” recommendations is twice as effective as the non-personalized “top seller” recommendations.

The easy and quick direction to relevant items enhances customer experience, customer engagement and loyalty as well as reduces shopping cart abandonment. It also increases impulse purchases and the average order value.

Consequently, it increases the revenues and profit margin. Barilliance study has found that the conversion rate of visitors clicking the on-site product recommendations is 5.5 times higher than those who do not click it.

 

3. Personalized Social Proof Notifications

What is it? Personalized social proof notifications are real-time updates about product inventory (i.e. how many are left in stock) and other shoppers’ behavior (i.e. what they are viewing or purchasing).

The notifications’ location on page, timing, frequency, and number varies depending on the company.

The types of notifications:

Statements about the company, e.g. “x people are shopping now”.

Statements about the item’s popularity, e.g. “x shoppers have this item in their shopping cart”.

Statements about the item’s availability, e.g. “only two items left in stock!”.

Why is it effective? These notifications provide –

Transparency: providing complete knowledge of external factors, to create better and favorable decision making.

Urgency: creating a sense of pressing, high priority matter because of time limit or competition. So, customers will act quickly and automatically rather than analyze the decision, to entice a decision of purchasing.

Social proof: changing or strengthening the shopper’s perception of the value of the company or an item, by displaying other shoppers’ activity. Shoppers will trust an unbiased shopper and will trust more a group of shoppers.

All of these factors combined help finalize a purchase. They increase the perceived value, trust, customer confidence, engagement and conversions by as much as 8%.

 

4. Personalized Triggered Emails

What is it? Personalized triggered emails are cart abandonment emails and other triggered emails that have real-time personalized content.

Where is it done?

The subject line: personalize by using the shopper’s name, an item viewed, etc. to create a personal connection and increase the email’s open rate and conversions.

The email’s main message: for cart abandonment emails, personalize the main message depending mostly on the reason for abandonment. For example, for abandoners because of shipping cost offer an incentive, while for those left because of confusion offer customer service.

The email’s content: personalize the email’s copy and visuals. For example, in cart abandonment emails, personalize the cart content displayed, social proof (notifications, ratings, and reviews) about the abandoned items, and the incentive (different percentage or discount on different items, categories or brand.

The product recommendations: help customers find better match items if they left due to hesitation about the item or increase their average order value with cross-selling. Personalized product recommendations in emails can lead to 35% increase in click-throughs and 30% increase in sales conversion rates.

Why is it effective? Emails engage and build a relationship with your customers.

Personalized emails optimize the engagement by sending out the most relevant and effective emails to each customer.

 

Apply personalization in these four areas to create a highly relevant online customer experience and you’ll be able to increase the customer engagement, satisfaction, loyalty and retention as well as your conversion.

Tweet about this on TwitterShare on Google+Share on LinkedInShare on Facebook