Personalization in e-commerce

#Personalization

Personalization is used in many fields of online marketing, but the underlying idea is the same: collect as much information about a potential customer as possible, and use this knowledge to create content that is tailored to him or her. From publishers to travel agencies, many firms increase the efficiency of their online activities with this tactic, but for e-commerce sites with a large number of products, personalization is a must-have.

In most cases, personalized webshops can show more relevant and persuasive content to their visitors than their competitors can. By utilizing data about each user’s affinities, interests and personal or financial attributes, they can help visitors find what they are looking for, and call their attention to products that they are most likely to buy.

One of the first websites to apply personalization was Amazon. The American company built its algorithm to battle with the familiarity of brick-and-mortar stores. They used behavioral data, and compared each visitor’s search and purchase history to other similar users’ decisions to come up with the perfect recommendations for their customers.

Personalization has become widespread among e-commerce sites since Amazon started to apply this method, and now much smaller enterprises can also enjoy the benefits of employing it. In this post, we will show you what kind of data you can use to enhance your visitor’s experience, which areas of your webshop are the most suitable for personalization, and try to forecast what you can expect from this technique. We will also show you several use cases of effective personalization on e-commerce sites.

If you’re new to this field, it could help you decide how much your site could benefit from applying this method, and you might find some useful ideas, too, if you are already using personalization to some extent.

Personalization in e-commerce

Shoppers expect personalized experiences  

Several studies have been made about the American internet users’ attitudes toward personalization in the last few years, and their results are quite similar. The majority of the users like the personalized shopping experiences and believe it is easier to find interesting products on e-commerce sites that use some kind of personalized recommendations.

Moreover, according to Janrain, a leading customer identity management firm in the U.S.,  74 percent of U.S. web users feel frustrated when content or an advertisement presented to them is not related to their interest. (For example, half of the respondents said they would leave a site that recommends they purchase underwear that is for the opposite gender.)

At the same, users are not comfortable with some of the methods e-commerce sites employ. The majority said they are against sharing their browsing history or current location with retailers and would like to have the option to control how their data is used.

As users in general prefer personalized experiences, it’s not surprising that more and more companies plan to use this method. Evergage, a U.S.-based personalized-data tracking firm, asked 242 marketers working at larger corporations around the word about their attitude toward real-time personalization, and 78 percent of those who don’t use it told the company that they plan to start within the next 12 months.

The popularity of personalization among marketers is not surprising. The average conversion rate for e-commerce sites is between 2 percent and 4 percent globally. For most site owners, even a small uplift in sales could justify the efforts needed to personalize certain areas of their sites.

The vast majority of webshops’ visitors arrive at product or category pages, and they leave immediately if they can’t find what they are looking for. Capturing their attention at this point could be game changing.

Personalization in e-commerce

Personalization in e-commerce

Of course, no matter how much data you collect about your visitors, you won’t always be able to predict what they would like to find at the exact moment they arrive at your site. Even if visitors land on the subpage of a product that they searched for in Google, it is possible that they want to know more about your company or see some unrelated products before ordering from you.

In other words, personalization is not a substitute for logical navigation or good site architecture, and you should always leave some choices to your visitors. These options will help you increase the effects of personalization, too. For example, if you study the terms users search for on your site, you can learn more about their interests or problems with your recommendation system.

It’s also worth noting that the effect this technique is going to have on your webshop depends on many factors, and some product categories are better suited for it than others.

But apart from sensitive services or products, a more personalized experience is very likely to increase conversions on your site. And the more precisely you are able to define the segments of your audience, and the context in which they meet with your messages, the better results you can expect.

You can always test how the changes affect your site, and many applications, that help you personalize your website have built in A/B or multivariate testing capabilities, too. As you will see from the examples we collected for this post, if you are able to show the right messages at the right time to your visitors, you can expect a heavy impact on your conversions.

It doesn’t take a large investment to use some forms of personalization. For example, you can segment your subscriber lists and create emails that are triggered by a visitor’s actions, or set up effective retargeting campaigns without the help of developers.

Although some of the website personalization methods we are going to introduce in this post require technical expertise, there are hundreds of companies offering personalization applications, and many of them are specialized in e-commerce sites. We collected several of them in this post, and I’m sure with a little research you can find solutions that suit your company’s needs, and make a reasonable ROI.

 

This post continues! Click here to read the second part of our article, with practical tips on personalization for e-commerce sites.

#sharingiscaring 😉

by Péter Szántó
on Tuesday, July 5, 2016

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