The most successful brands capture customer attention, keeping them engaged, and coming back for more. One of the most effective ways to maintain a steady stream of interactions is through ecommerce personalization.
But scaling personalization isn't always easy when your product SKUs and customer base grow into the thousands. So how can online retailers choose the right ecommerce personalization tools, implement a compelling strategy, and plan for growth? Keep reading to find out.
But first, let's start with the basics.
What is ecommerce personalization?
Ecommerce personalization is a marketing tactic that involves delivering customized experiences on ecommerce platforms through the use of dynamic content based on a user's browsing behavior, purchase history, demographics, previous interactions, and other data.
The dynamically served content can take many different forms, from tailored product recommendations to targeted promotions as just two examples. Ecommerce personalization ensures your content and offers remain relevant and attractive to shoppers.
Benefits of personalization in ecommerce
What are the most salient benefits of ecommerce personalization?
Increased sales and conversions
Offering a personalized shopping experience drives shopper engagement, decreases cart abandonment, and ultimately results in more sales and higher revenue.
On average, LimeSpot customers who use AI-driven personalization see a 20% or greater increase in revenue and a 2-5x higher conversion rate. And personalization also positively impacts average order value (AOV). In fact, eco-friendly personal care brand Spongellé implemented LimeSpot to roll out a comprehensive personalization plan resulting in a 21% increase in AOV.
Improved retention & loyalty
Personalization also enhances the shopper experience, fostering customer loyalty that translates into repeat sales and helps marketers maintain the continuous closed-loop demand circuit.
While the benefits are clear-cut, the road to personalization is not. In a survey conducted by Forrester, 77% of consumers said they chose, recommended, or paid more for a brand that provides a personalized service or experience. In contrast, another Forrester survey revealed that 53% of digital experience delivery professionals said they lack the right technology to personalize those experiences.
So how can digital professionals more easily design and execute an ecommerce personalization strategy?
Designing customer-centric experiences
While a majority of ecommerce businesses favor personalization, even those that have deployed it are still in the process of understanding how to best use it. In a way, AI-driven personalization is still in its infancy.
But as with any new marketing concept, one guiding principle holds true. It never fails (in this case) to take a page from Amazon and be, "Customer obsessed."
Yes, at the heart of personalization is a business goal. But customer-centric company goals have the best chance at achieving success because personalization is not just about increasing profit. It's about helping visitors consume content at their own pace to help them achieve their goals at each stage of the buying cycle. The best personalization strikes a harmonious balance between the buyer's and brand's goals.
Truly powerful personalization goes beyond demographic information (who you are) to what you are trying to achieve in the moment. Each site visitor's interactions — a search query, browsing data, form fill, product recommendation — map together to build a complete customer journey and persona than has ever been possible.
The role of AI in ecommerce personalization
When referring to ecommerce personalization, it's impossible not to mention the role of Artificial Intelligence (AI) or machine learning.
More effective product recommendations
Because neural networks can process algorithms and data much faster than human brains, AI has made it possible for companies to collect user preferences and behavior, process that data, and use the findings to recommend personalized products to every customer in real-time.
Real-time reactions mean AI can sense user exit-intent and offer instant assistance in a way that isn't possible manually. Or, through natural language processing, AI can help prioritize items in a vast content catalog to serve the products customers are most interested in. The point is really that AI can serve users personalized content at the moment when they are most likely to consume, and even better, convert on it. Timing really is everything.
Better audience insights & segmentation
Traditionally, audience segmentation has fallen along the lines of semi-arbitrary categories like age, gender, and other external demographic parameters. Now, AI can recognize behavior patterns humans might miss and identify buyer segments based on less obvious characteristic similarities. It can even help identify new buyer segments that have never previously existed, and it can uncover upcoming market trends. Using AI for segmentation brings data patterns to the forefront of customer segmentation and helps remove human biases.
Next-level email personalization
According to stats recently published by Forbes:
- Marketers witness a massive 760% increase in email revenue from personalized and segmented email campaigns.
- Personalized email calls to action (CTAs) convert up to 202% better than static ones.
- 55% of consumers believe that targeted promotional messages create a more enjoyable shopping experience.
According to ClickZ, 70% of retailers that used advanced AI-driven personalization achieved an ROI increase of 200% or more. When AI is integrated with as many touch points as possible, ROI increases yet again to 300%.
As advances in machine learning continue, so do the possibilities for personalization.
Ecommerce personalization tactics
Now let's get into specific personalization tactics rooted in marketing and user experience (UX) best practices.
Targeting & profiling
By using data to profile new visitors, you can use AI to process the information and match their behavior and intent to your product catalog inventory in real-time.
Recommending product categories based on browsing behavior
If a retailer knows that shoppers will soon begin searching for Mother's Day gifts, the company can create a landing page that curates a selection of chosen items for which they think buyers will be looking.
AI can then step in, aligning with the customers' preferences and boost the bestsellers or similar products that may have higher stock availability or higher margins.
When you have rich data about your customers, you can use 1:1 personalization to show highly personalized products to a single individual. Because of the depth of this personalization, 1:1 personalization poses several challenges. To do it properly requires high-speed data aggregation and analysis, machine learning optimization, and an infrastructure that supports cross-channel deployment.
Personalize search results
Brands use AI and 1:1 personalization to deliver better search results to their customers over time. For example, a shoe retailer can use a customer's past behavior and browsing history to conclude that a customer only searches for flat shoes. When the customer arrives on the website to search for boots, machine learning can serve them flat boots.
If the customer has browsed through shoes from the brand Stuart Weitzman, as another example, machine learning can even suggest a Dynamic Category, "Stuart Weitzman," or perhaps, "Boots by Stuart Weitzman," to display shoes matching or similar to those categories.
Adjust navigation to visitors' interests
Another popular example of personalization is changing a user's homepage navigation based on their interests or profile. If, for example, we know someone has browsed through women's clothing, we can automatically redirect the shopper to an experience tailored to the women's clothing section.
Send personalized emails based on user behavior
Even though email has been widely available since the 1980s, email marketing still remains one of the best channels through which you can reach your customers. Using personalization and marketing automation, you can trigger customized emails to customers based on their interests, marketing to them even after leaving your site.
Amazon is known for doing this type of personalized email particularly well, sending personalized newsletters with deals on items through which customers have previously browsed.
Show category-specific discount coupons
You can increase the efficacy of your discount promotional codes by using personalization to target specific offers, testing product-specific messaging as users browse correlating product categories.
Sort recent products by interest level
Another popular AI application is using it to sort a collection’s products based on a buyer’s interest. Retailers can order products based on the user's browsing history so that each buyer will see a different product sort order, placing more relevant products higher up to increase the likelihood of conversion.
Suggest complementary products
If you are starting out with personalization, an easy tactic to implement is showing related or similar products to your shopper.
Clothing retailers, in particular, see boosts in sales when using personalization to show clothing items that can be styled together. But the practice can go well beyond clothing. For example, you could sell refillable gels for a tooth whitening kit, or a tripod that works well with a particular camera.
Pitch an upsell at checkout and after purchase
Another tactic Amazon successfully employs can be replicated by a range of ecommerce brands. You may have noticed that they offer recommended products both during the checkout process and immediately after.
This strategy is particularly effective when bundling an offer with a free shipping cart minimum threshold. By showing shoppers items AI knows they are interested in at the time of checkout when their shopping cart minimum dollar amount has not yet been met, customers can easily be persuaded to add the additional item to their cart before completing their order.
Preemptively handle exit-intent
As alluded to earlier, AI can prevent visitors from abandoning a site by deploying personalized offers before leaving the site. Often taking the form of exit-intent popups, this tactic is also easy to deploy for personalization rookies.
Use geo-location tagging
Another easy personalization win is to serve custom content based on a visitor's location. Geo-location tagging makes it easy to segment your shoppers and offer location-specific promotions. Combining AI and geo-location tagging also allows you to give shoppers real-time store inventory and shipping availability.
Deliver weather-based personalization
Geo-location tagging also allows retailers to offer landing page content based on weather patterns. For example, clothing retailers will offer warm-weather outfits styled together on sunny days or vice versa. The same principle can be applied to year-round seasonal considerations, suggesting appropriate clothing for regional climates.
Integrate user-generated content across your funnel
In the US, 54% of consumers say they learn about new products from friends and personal acquaintances. In light of the sway behind peer-based recommendations, it's simple to see why the integration of user-generated content (UGC) can increase conversions. While many companies show UGC on product pages, most businesses stop short of integrating it across the entire demand funnel, missing out on easy wins.
Timed social retargeting
Social media retargeting isn't a new concept, but the use of AI allows for more advanced granulated retargeting. Because a site visitor's value declines as their time away from the site increases, timing retargeted product recommendations correctly is vital. AI allows you to specify the retargeting period better to serve ads when shoppers are most likely to buy.
AI can also save ad spend by matching retargeting efforts to the shopper's declining value, so you aren't wasting dollars on shoppers who are unlikely to convert.
Give a continuous shopping experience
Continuous shopping is a personalization tactic recommended by Shopify Plus that employs a simple algorithm to add immense value to the shopping experience. The concept revolves around keeping a shopper's experience consistent — or continuous — across different shopping sessions — even across devices. By remembering visitor browsing history, preferences, and shopping carts across previous sessions, you can offer a seamless shopping experience that makes it easier for customers to browse and buy products on their own time.
How LimeSpot improves personalization
LimeSpot is an ecommerce personalization software that delivers real-time personalization at scale across web, mobile, and email.
Provide unique website experiences — tailored static images, copy, offers, and recommendations — that reduce drop-off rates, foster customer loyalty, and ultimately increase sales. Advanced A/B testing lets you create, run, and monitor results from multiple experiences, and unlimited segmentation prioritizes 1:1 personalization.
Populate emails with personalized and dynamic content to show relevant products, boost click-through rates, and drive sales. Deliver 1:1 personalized campaigns and newsletters to drive customers back to your site, and then easily measure campaign and recommendation effectiveness.
Google Shopping Ads automation
LimeSpot Ads enriches Google Shopping Ads for more impressions, higher ROAS, and better rankings with less effort. LimeSpot also layers on additional product attributes such as gender, descriptions, and product details for richer search listings, while behavioral data and more granular audience segmentation allow for better targeting. By improving what data gets passed to Google, LimeSpot Ads can improve discoverability and performance by 10x.
Start personalizing today
By defining both a long-term personalization strategy and optimization process, you can begin offering ecommerce personalization to increase engagement, improve your customer shopping experience, and boost overall sales.
Although some personalization tactics require more complex cross-channel deployment, there are several easy personalization wins to execute upfront to reap quick results while simultaneously designing more sophisticated plans.
With the right ecommerce personalization software, you can serve visitors personalized dynamic content at the right time to turn shoppers into buyers.
Need help getting off the ground? Request a demo to get started on your personalization journey.