Personalization Maturity in Ecommerce
Personalization is a key component of any modern ecommerce strategy and is going to continue to grow in relevance as we move through 2022 and beyond.
Many customers today expect brands to tailor marketing and product recommendations to their personal browsing and previous shopping habits and we know from a growing body of research that those people are happy for companies to gather their data – so long as that data is treated with care and respect and is used to create personalized experiences for them.
In short – customers will accept data harvesting by ecommerce brands if they get some kind of benefit from it.
Data
To properly personalize the shopping experience for your customers, you first need to understand every step of the buyer journey, from discovery and consideration to purchase and after-sale.
To achieve this, you need to track several critical data collection points relating to the customer journey, including traffic, on-site interactions, email, personal data, social and search paid media pixels, previous purchases, search, and pricing.
If that sounds like a lot, that’s because it is. This is why all ecommerce brands taking personalization seriously deploy artificial intelligence and machine learning software to crunch the numbers for them. With these powerful algorithms able to process and analyze vast swaths of data in a fraction of the time a human brain could, on-site and customer data points can be tracked in real time and then converted into bespoke personalized experiences tailored to each customer.
Once you’ve got your data collection and analysis operation up and running, you can actually get down to the business of developing your personalization strategy based around each segment of your ecommerce business and the overall size and scope of your enterprise.
Personalization
The phrase "don’t run before you can walk" should be kept in mind when developing your personalization strategy. It’s better to start small and master a few elements of personalization, than to try and implement everything at once and fail to develop each segment effectively.
For example, in the preliminary stages of personalization implementation you could focus on delivering customized content or pricing to your customers based on traffic segmentation.
Imagine a coffee shop – some visitors [traffic] will be regulars and the person behind the counter may pre-empt them ordering by asking if they want their usual beverage. However, a new customer [differently segmented traffic] will be greeted completely differently. This is what we mean by creating a personalized experience based on traffic segmentation.
Meeting the expectations of distinct types of visitors is a key step in creating engaging and personalized experiences for your customers.
Once you have reached a certain level of maturity when it comes to personalization, you’ll likely want to explore more complex application such as on-site product recommendations tailored to each guest’s browsing history or previous purchases – in the case of a returning customer. Social media targeted advertising is another channel to explore at this stage of maturity.
Emails are a fabulous way to check in with a customer post-purchase and ask if they are enjoying the product and were happy with the service. This channel of communication is also terrific for recommending additional products to the customer and encouraging them to leave a review for your brand.
At the top level of personalization, you will want to be identifying high-value customers and potential influencers to become potential advocates for your brand. This can be achieved by employing RFM [recency/frequency/monetary] analysis to score customers based on their interactions with your business.
Recency refers to identifying each customers most recent purchases, frequency is the number of repeat purchases, and monetary combines average order value analysis and total spend analysis over a set period.
These figures can then be used to identify the highest value customers who can be targeted with additional product recommendations – as they are more likely to take advantage of them – or approach with the potential of becoming social media influencers and advocates for your brand. You can send these influencers free products to promote on their accounts with unboxing and other brand advocacy content.
Final Thoughts
You can see how, at each stage, we are adding layers of personalization which can feed into one another and reach your desired audience when they are at various stages of their purchasing decision and beyond.
Personalization isn’t a gold standard for ecommerce any longer, but rather an expected feature. However, this doesn’t mean there isn’t a gold standard of personalization within the concept itself and those brands which take their time and master each step, will be the most likely to reach those higher levels of maturity described above.
Personalization is set to be a hot topic at eTail Boston 2022, taking place in August at The Sheraton, Boston.
Download the agenda today for more information and insights.