When you want to give a differentiated experience to your customers in your store, you need to understand what every unique customer needs or might need. In the physical stores, it can be achieved up to a small scale. You can learn the names of your loyal customers, remember their choices and show them the highly relevant product of their choices. But e-commerce stores are big, widespread and lack a personal touch to a customer. This is where e-commerce personalization comes into the picture and technology can be used to provide a personalized experience to each customer.
In this post, we will talk about types of personalization and the ways personalization is currently being used in e-commerce.
What is Personalization
Personalization as a term is not new, we all have heard about this many times. To put it formally:
E-commerce personalization is crafting unique and customized experiences for customers using their individual behavioural data to ensure relevancy, brand engagement, and revenue generation.
Few Stats on E-commerce Personalization
Here are some key statistics showing the importance of personalization:
- O2’s study “The Rise of Me-tail” shows that adding personalization experience to your e-commerce store could lift sales by 7.8%.
- 56% of consumers say they would be more inclined to use a retailer if it offered a good personalised experience.
- 94% of companies agree that personalisation “is critical to current and future success.”
- Nearly three-fourths (74%) of online consumers get frustrated with websites when content (e.g. offers, ads, promotions) appears that has nothing to do with their interests.
Personalization in E-commerce:
Personalization in e-commerce is a broader term and there are a variety of ways and events where you can implement it. It can be as simple as showing “Hello Sam” instead of “Hello User” on your welcome page. And it can be an advanced feature like styling your clothes predicting your preferences and shipping them to the user like Stitchfix does.
We have collected 5 key ways to implement e-commerce personalization in your e-store for a good start.
1. Navigational Personalization
In navigational personalization, you can customize how a user navigates in your store to maximize the chances of purchase. The most frequently used part to customize here is your landing page and navigation categories. Based on the navigational structure of your products and categories, you can take the right decision about the navigational personalization.
Use Case: Person A comes to your store in a session and browses white collar shirts but did not buy one. In this event you clearly see, the user wanted to buy a product but did not buy one. In such a case, when person A visits your store in the next session, you can move the shirt category in the top section, place a banner ad for white collar shirts on the landing page or maybe offer him a discount on white collar shirts.
User Interaction Items Used: Browsing history and purchase history.
Best Used at: Navigation, prioritized categories, placement of banner ads, recommendation section on the landing page.
Takeaway: Navigational personalization should be very subtle. It should not drastically affect the overall UX of your store.
2. Predictive Recommendations
In predictive recommendations, you provide personalization based on the behaviour of other similar users. This system considers the historical and combinatorial data of a large number of users. Amazon uses this personalization effectively while showing “customers who bought this item also bought these”. This personalization triggers a feeling of social proof to the users in their purchase journey.
Use Case: If a set of user bought item A and then bought item B, it’s likely that a new user who is viewing item A will also buy item B.
User Interaction Items Used: purchase history
Best Used at: Cross product recommendations, email campaigns.
Takeaway: Predictive recommendation works well only in big stores as you have enough historical and user behaviour data to fuel the relevance of these recommendations.
3. Third party data
For personalization, apart from internal user behavioural data you collect inside your store, you can also use some third-party data from external resources. This data may be weather information, shopper’s location, device type, information from user’s social networks etc. You can also buy third-party data from outside vendors.
Use Case: When your store is in a country with different types of weather in different locations, you can customize the landing page banner ad image showing clothes most relevant to user’s location. So, if person A is browsing from a city where it is snowing, the landing page will show an ad for a woolen overcoat, whereas person B who is browsing from a where it is raining, the landing page will show an ad for rain boots.
Third Party Data Used: User’s location and weather information.
Best Used at: Landing page offers and messaging, coupons in personalized emails, product recommendations section on the landing page.
Takeaway: Make sure integrating with third party data does not hamper the performance of your site.
4. Database segmentation
Every store maintains the database of its users. When it comes to personalization, segmentations plays a key role. The answer is clear, all users in your database are not same and it’s very difficult for a business to craft unique offers and messaging for an individual user. On the other hand, it’s irrelevant to send out the same message or offer to the entire database. But, you can always make different chunks in your database based on some similar attributes of users inside that chunk. It’s like grouping.
You can also create sub-segments from your segments. It helps you to mix and match sub-segments on need basis for your campaigns and loyalty programs. Proper segmentation also helps you to re-engage with users through various mediums.
Use Case: You want to craft a special offer for 30% discount on a total purchase of above 400$. Now, this offer might not be relevant to all the users. So, with the pre-segmented lists based on the average order value from past 6 months, you can easily target the users who might use this discount on their next purchase.
Segmentation Used: Users who have an average order value of 500 $ in last 6 purchases.
Best Used at: Email subject lines, mailing lists, personalized messages, loyalty programs, personalized offers and coupons.
Takeaway: Identify the parameters for segmentation in the first place according to your strategy and business goals to effectively use them later.
5. From Customer Specific Data
This type of personalization is the most effective and supports the ‘segment of one’. This is derived from tracking individual user behaviour inside your store. The list of attributes in tracking user behaviour can be huge and still not fully discovered and leveraged in the industry. Some of the most used attributes are; browsing history, purchase history, wishlist/likes, the number of orders, average order value, days since the last transaction, days since the last visit, products added to the cart, viewed items, cart abandonment etc.
You might have faced problems in bringing back the users to your store. For example, person A last visited your store 15 days ago and he added 2 items in his cart but never bought them. Now, using person A’s behaviour data, you can send him a personalized email/app notification reminding him about the products added to his cart. Here, you can add similar products in the email or may be some offers related to these products.
User behaviour items used: Days since the last visit, products added to cart.
Best Used at: App notifications, personalized emails, cart abandonment emails.
Takeaway: The key here is to use different combinations of user behaviour data intelligently for a variety of use cases.
The possibilities of using personalization in creative ways are endless. You can mix and match the user interaction items, third party data, and segmentations to solve for your unique use cases. You can also figure out and try new mediums.
We are sure you might be using it in some way or other. But to get most out of personalization is the key and your can always rely on the power of automation and technology to ensure relevancy and conversions.
Just keep in mind the 2 tips to get success in personalization:
- Understand each user
- Be useful to user
Hope you find this post useful. Please let us know what personalization strategies you use in the comments below.
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