Unlocking the Power of eCommerce Personalization: 6 Actionable Tactics to Revolutionize Your Digital Strategy
From dynamic recommendations to personalized loyalty programs: Strategies to delight customers and drive revenue.
In ecommerce, personalization has become essential as customers expect retailers to understand their needs and expectations and offer relevant products. According to McKinsey, 71% of consumers want personalized interactions, and 76% get frustrated when they don’t get them.
To catch up with this trend, digital merchants are looking for new ways to update eCommerce strategies and modify their websites to deliver personalized shopping experiences. This article provides six actionable eCommerce personalization tactics and illustrates how brands successfully implement them in real-life eCommerce settings.
What is personalization in eCommerce?
ECommerce personalization is the practice of crafting unique shopping experiences for individual customers based on their needs and preferences. It relies on diverse customer data, such as demographics, location, browsing history, previous purchases and device type. There are several benefits of eCommerce personalization, including:
Enhanced customer experience
With personalization, customers receive product recommendations that match their unique needs. This drives a satisfying shopping experience, particularly when a retailer delivers personalization across all sales channels.
Moreover, businesses can remove friction points from buying journeys by optimizing the purchase experience and using convenience-oriented features, such as pre-filled credit card details and one-click checkout.
Personalization addresses customers’ individual needs, thus increasing the relevance of a brand’s offerings to shoppers and encouraging them to make a purchase. According to Netcore Cloud, retailers see an average increase in conversion rates by 45% from personalization.
Stronger customer engagement and brand loyalty
Customers feel understood and taken care of when they get tailored product offers from a brand. A survey by Segment shows that 60% of consumers are likely to become repeat buyers after a personalized shopping experience.
Businesses cultivating customer engagement and loyalty with personalization can significantly expand their customer base, cut acquisition costs and boost retention rates.
According to the previously mentioned research by McKinsey, companies that employ effective personalization techniques generate 40% more revenue from these activities than average players.
By incorporating personalization into their sales and marketing strategies, retailers can stand out among other brands that fail to meet customer expectations for tailored shopping.
5 effective eCommerce personalization tactics
With accumulated customer data and dedicated software, digital merchants can apply multiple eCommerce personalization methods.
Dynamic product recommendations
eCommerce companies can also recommend specific products based on customer demographics, location and purchase history.
The effective techniques of dynamic product recommendations include showing products similar to what a customer has viewed, cross-department suggestions of complementary products and prompting customers to continue shopping where they’ve left off.
- Example: Pura Vida Bracelets, an accessory business, introduced two recommendation categories on their product pages, “Products you recently viewed” and “Customers also like”, displaying similar popular products. Within the first year, product recommendations demonstrated an average conversion rate of 7.9%, with more than a 10% increase in overall revenue.
An effective way to engage customers and increase conversions is to send personalized emails and newsletters with discounts for products that customers have recently viewed. Emailing time-limited offers can add urgency and increase purchase intent.
- Example: Adidas sends personalized Birthday Style Ideas emails to customers with products they can like. This way, the brand values its customers by recognizing their special day and showing a deep understanding of their preferences.
eCommerce website search engines can be enhanced with semantic search capabilities to provide relevant search results to each different customer, with allowance for spelling mistakes and differences in how they can describe the same product.
- Example: Jenson USA, an online bicycle retailer, segmented its customers into different types of bikers to deliver web search results tailored to a particular user. For example, if a customer has bought a mountain bike, then suitable tires and gear will pop up at the top of their search results. As a result, the company increased its revenue per visitor by 8.5%.
Abandoning visitors retargeting
Cart abandonment is a pressing problem in eCommerce, and personalization can help bring customers back to complete their purchases. Ideally, companies should retarget customers at risk of abandoning the cart with personalized offers through email or messages on social media.
Experts advise limiting your retargeting period from 7 to 14 days to reach out to customers when they are most likely to complete the purchase.
- Example. Morvelo, a cycling clothing brand, sends customers an email reminding them of the products left in the cart and encouraging them to return and finish the purchase.
Personalized loyalty programs
Online retailers can personalize their reward and loyalty programs to build a stronger emotional bond with their audiences and increase customer satisfaction, ultimately leading to more conversions.
Best practices for loyalty program personalization include personalizing all communications, tracking loyalty points accumulated by program members and offering personalized deals to motivate customers to achieve reward goals by making more purchases.
- Example. Starbucks uses AI-powered real-time personalization with gamification features in their loyalty app to engage customers. The brand makes product recommendations and comes up with personalized games to reward loyalty program members and encourage them to try new products. The games tripled Starbucks’s marketing campaign results and spendings from customers who redeemed offers.
The bottom line
Modern consumers expect personalized interactions from brands and are likely to become loyal when their shopping experiences are tailored to their needs and preferences. By incorporating eCommerce personalization into marketing strategies, companies can better understand customers, predict their wishes and provide them with the most relevant offers.
eCommerce personalization is a rewarding practice that improves customer relationships, reduces churn rates and acquisition costs, sets your brand apart from others and drives revenue. Retailers that hesitate to adopt personalization today can miss business growth opportunities and lag behind competitors.
Alena Kuptsova is a Technology Research Analyst at Itransition, a software development company based in Denver, CO. She analyzes current digital transformation trends and explores the opportunities the emerging technologies bring to businesses across industries.