E-commerce Personalization: The Ultimate Guide

Personalization is a necessity for businesses and the prime driver of marketing success in the future. Especially for retail or e-commerce businesses, e-commerce personalization drives more product purchases, increases sales, and drives brand loyalty. It is not just nonsense. Twilio State of Personalization Report in 2021 stated that 60 percent of his 3,000 consumers surveyed said they would return after a personalized shopping experience. It increased from 44 percent in 2017. It accelerated the trend by lockdowns and changes in buying behavior over the past 18 months. 

When you provide a personalized experience, you can make each customer feel like the most important person in the world. You can offer a shopping experience tailored to their specific needs and desires. And let’s talk about the details personalization experience by reading this article. 

What is e-Commerce Personalization? 

E-commerce personalization is how online stores offer customized and unique website visitor experiences according to their desires and preferences. It can be based on a user’s demographic segment, browsing history, purchases history, browsing device, and other data to deliver dynamically, such as:

1. Personalized product recommendations
2. Content
3. Special or specific offers

The impact of successful personalization programs yields more engaged customers, which results in 20 percent higher customer-satisfaction rates and a 10 to 15 percent boost in sales conversion rates. And it could increase retention by 5 percent and see profit rise between 25 and 95 percent. 

The Benefits of e-Commerce Personalization

Personalization is becoming essential for online stores or e-commerce. In a recent Adobe research study on summer spending, 67% of respondents said they would like to receive personalized promotions or offers based on their spending habits when shopping in-store or online.

When you personalize your online store, your visitors will get easier and faster to find exactly what they’re looking for. Besides, these are the benefits of e-commerce personalization that you need to know.

Better Conversions

Showing customers precisely what they want before buying can increase conversion rates. And using product recommendations when a customer is about to checkout, brands can showcase products that specific groups of customers are more likely to buy. All of those are possible with e-commerce personalization. 

Improved Brand Engagement

Knowing where your customers want to shop and the products they are more likely to buy can improve engagement and how they interact with your brand. E-commerce personalization features inspire customers to interact with your brand because it presents the products they want to see the way they want.

Increased Customer Loyalty

E-commerce personalization increases customer loyalty. By showing your brand that you always know what is expected of you and how to deliver the desired experience, they will likely show loyalty and continue to buy from your brand compared to your competitors. 

Enhanced Customer Experience

Personalization improves the customer experience because it helps brands better respond to customer needs and makes shopping time with you more enjoyable. Personalization allows brands to remember their customers’ preferences and guide them exactly where they want to go from the first step into their store. Showcasing products your customers would love to see, storing payment information for quick access, and receive updates on upcoming promotions they care about most are all ways personalization improves the customer experience. 

Better Understanding of Customers

E-commerce personalization not only improves the customer experience but also helps you better understand the customer experience. Personalization requires brands to collect customer information in order to provide them with a better experience. If used correctly, brands could tell where their customers are, what types of products they like to buy, and which they don’t. You can use this information to decide which products to continue manufacturing and which ones to discontinue.

Competitive Advantage

If your competitors aren’t using e-commerce personalization, you’ll have the edge over them. Personalization allows your brand to stand out and become popular with your customers. Customers can change their minds on the spot. However,  they are more likely to stay with you and even become an advocate for your brand if you offer them a more personal experience not found elsewhere. And for B2B companies, personalization in e-commerce can be seen as an extra mile for valued customers.

Examples of e-Commerce Personalization 

Retailers in many different categories have successfully implemented personalization effectively at scale and have had notable successes in this endeavor. And these are examples of brands or companies that implement personalization on their online store.

Amazon

As a dominating large online-only retailer, Amazon has used sophisticated analytics to shape its personalization efforts. Amazon has a personalization program that shows customers products they often purchase together with the products they are viewing and products that can be bundled with products in their cart or additional products recommended in emails sent for transaction confirmation. 

Amazon continues to raise the bar on personalization by offering increasingly detailed and innovative offers for individual customers. For example, Amazon Prime Wardrobe recently launched a personal shopping service exclusively for Prime members. A customer fills out a survey about her style and fits preferences, and a team of stylists provides personalized recommendations from her over 500,000 items across all brands. Amazon will likely continue to lead innovation in personalization, but other smaller retailers with far less sophisticated systems are also setting new standards.

Sephora

Sephora, a global beauty retailer, delivers personalized experiences that are truly presented to consumers across multiple channels. The company’s digital channels, especially the mobile app, encourage customers to book in-store makeup and fashion consultations. The app’s in-store companion feature allows users to find stores, check product availability, and make reservations. When a customer chooses to have their makeup done in-store, they are given a login to the app, so makeup artists can enter the products they use into the customer’s profile. 

The app also allows customers to virtually try on products and get recommendations based on their beauty characteristics. When customers visit a Sephora store, they can use the app to discover virtually sampled products. All Sephora customer communications, regardless of platform, show customer loyalty points. Sales reps can also see these point totals and access the customer’s profile in the store. The profile includes data about the customer’s in-store purchases, her online browsing and buying patterns, and her interactions with in-store salespeople. 

Sephora’s program is noteworthy for another reason. It demonstrates the effectiveness of targeting your most loyal customers. The company’s tiered loyalty program, Beauty Insider, offers top members early access to new products, invitations to exclusive events, complimentary one-on-one beauty services, and more. All members receive customized recommendations based on the profile they fill out online. Profile details (name, buying habits,  quiz answers, etc.) are shared across channels. Store associates can access customer profiles in stores and track sampled items so customers can easily find and purchase them on the website or app. 

All brand communications across all platforms show customer loyalty points, and offers are synced across platforms. The results of Sephora’s personalization efforts are impressive. The loyalty program currently has approximately 25 million members. In 2018, the member accounted for 80% of all his Sephora transactions. Not only that, Sephora ranked #1 on the Sailthru Retail Personalization Index with 79 out of 100 three years in a row.

Nike

Nike, one of the world’s largest sports footwear and athleisure companies, has pushed personalization to the point of individual products, allowing customers to configure their own clothing and shoes. The company recently launched a 3D sneaker personalization platform that enables shoppers to create and share real-time snapshots of finished shoes. 

Personalization also extends to Nike’s physical locations. Nike’s flagship store in New York City offers an engaging omnichannel shopping experience enhanced by membership in NikePlus, the company’s personalized loyalty program. Members receive  exclusive personalized benefits, including access to the Nike Speed ​​Shop, which offers a data-driven, locally customized selection of “NYC Favorites.” Members can also reserve items stored in a pickup locker and retrieve items by scanning their NikePlus Membership Pass. 

With Nike Shop the Look, members can use their QR code scan to check the availability of their preferred size and color and request delivery to a pick-up location or locker room of their choice. Instant Checkout allows members to skip the checkout line and check out directly from their saved payment device. Other benefits include access to Nike Expert Studio, where members can meet and book directly with Nike experts, and  Nike by You, where members can view a selection of silhouettes uniquely tailored to their specifications.

E-commerce Personalization Challenges

According to McKinsey, there are four main challenges retailers will face in getting personalization off the ground. And here are the details. 

• Data management

More than 67 percent of survey respondents say their biggest personalization challenge is collecting, integrating, and synthesizing customer data. 

• Data analytics

48 percent of retailers recognize that acquiring and maintaining in-house analytics and data science expertise are the key concerns.

• The tools and technology

67 percent of the survey respondents admitted they didn’t have the right tools to carry out the personalization at scale. Meanwhile, 41 percent of survey participants say finding the right solution partner was a struggle.

4. The alignment of retail organizations across functions

Siloed processes and organizational models are two kinds of obstacles that prevent the efficient and prompt sharing of customer data and promotion decisions. The fact is 43 percent of respondents say the silos processes “make the job difficult,” and 25 percent report that such silos make it difficult to get vendor funding—as well as buy-in—from suppliers for personalized offerings. Not only that, in many cases, these sorts of changes require a significant shift in employees’ mindsets so that they become comfortable with the test-and-learn and fast-fail experiments that personalization requires.

E-commerce Personalization Best Practices

You might know to understand how personalization builds loyal customers and drive high conversion rates for your online store. But how can this personalization be implemented in your online store? Here are e-commerce personalization strategies that hopefully inspire you and your business.

Build Personalized Homepage

If you realize that the homepage is the gateway to your online shop. The prospect is already on your doorstep, so it’s your chance to greet them in the best possible way with personalization. And this is the benefit of online shops where you can get to know your visitors even after visiting, thanks to cookies. You already know much about your prospective customers if you collect cookies on your e-commerce website. And how about using this information to improve your customers’ shopping experience?

Personalizing your home page is an easy way to make your customers’ navigation easier each time they visit. Besides, it allows visitors to focus on categories of interest and shop without distractions. It means a better shopping experience and higher conversions.

Product Detail Page Recommendations

Product detail page (PDP) recommendations show products that are similar or complementary to products that shoppers are interested in. It is possible with dynamic upselling by recommending items that cost more but are similar in style and brand. These are proven to be profitable and have the highest conversion rates. Cross-selling at PDP makes recommending complementary items easy and encourages online shoppers to expand their shopping carts.

Create personalized bestseller lists to increase the click-through rate 

People are attracted to popular products. Think of the magic of bestseller lists in the chart-based economy of books, music, and more. We prefer to show bestsellers with a twist by adding a time dimension. Depending on the amount of traffic, we can show top sellers in the last 24 hours or zoom in on the last hour. 

Automate personalized emails or SMS

When online shoppers share their email address or mobile phone number with you, it means the opportunity to reach them directly with personalized messages and get converted. Using these two mediums to re-engage with your customers can help you reach them wherever they are and make your business memorable. Let’s look closely at three messaging techniques to get customer attention.

• Abandoned cart message 

Optimizing the checkout experience is necessary to reduce cart abandonment, but it cannot eliminate it entirely. For example, many shoppers leave an e-commerce site with an item in their cart because of a distraction. If this happens, you can refresh them with the abandoned cart email to encourage them to return and complete their purchase.

• “We miss you” message 

This kind of message is used for churn customers. Or you can also use this message when customers forget their cart, and you can remind them with friendly emails. Besides, you can also send this message to customers who are not visiting your website or app for a certain period. 

• Follow-up order message

Checkout is just the beginning of your relationship with a customer. You can send emails to customers after purchase and provide customized product recommendations based on previous orders. 

Show continuous shopping for customers

Continuous viewing is one of the most powerful features Netflix has developed. And the good news is you could apply this tactic to your e-commerce experience. All you have to do is add the continue shopping recommendations on the website because it is one of the most recommended tactics for high-growth retailers.

Special offers to first-time visitors 

First impressions are everything, and it also works for the business! You can build good first impressions by engaging customers with 10% off, buy one get one, or special seasonal offers at the beginning of the customer journey. It is a great way to introduce your customers to your brand and make it easier for them to say yes to their first purchase. 

Complementary Product Suggestions 

Complementary products are a great personalization strategy for upselling when customers visit a product page or add something to their shopping cart. It is similar to suggesting items that go well with the product the customer is considering or intends to purchase, but instead of focusing on the look or completing the collection, the complementary products are the current product. It helps enhance the experience. 

For example, people who buy shoes need socks, and people who buy tables need floor protection to keep their hardwood floors from scratching. This personalization focuses on the customer’s next steps and moves them there based on their current activity and previous purchase data.

How to Implement E-Commerce Personalization Strategy

If you think building an e-commerce personalization strategy is hard, you can try this step to help you create personalization programs from conception to implementation.  

Step 1: People (Customer Selection) 

The first step in creating a personalization strategy should focus on identifying the customers you want to serve. You need to analyze your segmentation and targeting data to identify your most valuable customers and their preferences. Then, create dynamic profiles based on demographics, browser settings, social media activity, and other signals. And once the profiles are created, customers’ shopping experiences can be matched to individual expectations across multiple touchpoints and channels.

Step 2: Goals (Determine Goal Metrics for Personalization) 

Defining goals for your personalization initiative allows you to measure success and is a vital part that helps shape your organization’s unique personalization strategy. The common metrics for this stage are average page views, add-to-cart rate, cart-abandon rate, and revenue per session. These metrics are tied to end goals that can optimize revenue, conversion rate, bounce rate, and engagement. 

Step 3: Strategy (Set a Strategy to Achieve Goals) 

An e-commerce personalization strategy lays the groundwork for actionable next steps. When developing a plan, you should: 

• Creating an interdepartmental project committee 
• Creating a budget specifically for personalization 
• Building a personalization team and assigning specific responsibilities 
• Establishing a process for continuous improvements – testing and experimentation 

Dedicating a team, a budget, and an established process to your e-commerce personalization strategy ensures that it`s prioritized, comprehensive, and addresses your organization`s overall business goals. 

Step 4: Technology or Tool 

Technology is the foundation of e-commerce personalization capabilities, so choosing the right tool is critical to the success of your strategy. When evaluating tools, look for an AI-driven platform that supports an omnichannel infrastructure, is marketer-friendly, and can process real-time data. 

The Takeaways

These are the complete guide to e-commerce personalization in your online shopping experience. Not only drive revenue, but personalization also sets your brand from competitors and builds a solid relationship with your customers. 

To implement a personalization strategy for your online business, you need an AI to understand what a shopper wants and how to deliver it in real time. This AI will use and utilize data from search queries, viewing history, past purchases, and social media recommendations to determine a shopper’s intention and then act on those intentions.

Adobe Commerce will make your e-commerce personalization strategy come true with its  Adobe Experience Platform and other Adobe Experience Cloud solutions to build rich customer profiles and personalize marketing campaigns and commerce experiences. 

You can build the e-commerce personalization experience with Lime Commerce, a full-service e-commerce agency specializing in Magento and mobile app development. Our team is an official Bronze Partner of the Adobe Solution Partner Program. We deliver the best solution to help our clients to grow their business in the digital landscape with personalized solutions based on your business and needs. Contact us, and we’ll help you create the best solutions for your business.