Beyond the Buzzword: How Companies are Attempting Ecommerce Personalization

"[FIRSTNAME], you don’t want to miss this offer!"

You’ve probably seen some form of this message in your inbox before. But is it truly effective? While emails that leverage personalized references may drive clicks, that doesn’t necessarily mean they drive conversions.

For years, brands and retailers selling online have been trying to figure out the optimal marketing mix to increase sales as budgets shift focus from print to digital. At the same time, consumers are receiving more emails than ever before as more and more companies implement aggressive email campaigns and send schedules with software and management tools.

In light of this, email personalization has become an extremely popular choice for brands. At its core, personalization leverages what a retailer knows, or can predict, about a customer and their shopping habits to create targeted messaging. Personalization is based on behaviors and attributes, and there are a number of different types.

The most basic form of personalization is based on behavior and activities of the consumer, such as browsing and purchase history. This is a relatively reliable form of targeting, but must become more intelligent once a purchase occurs. For instance, if a customer extensively researches and buys a larger ticket item, such as a sofa or high-end coffee maker, that same customer is highly unlikely to buy the same or a similar item again. In those cases, the retailer should use order data to sell matching pillows, throws or coffee cups.

CoH email personalizationCitizens of Humanity sends registered users email reminders if items are left behind in shopping carts.

There are a number of things a company can do to target customers based on behavior, including:

  • Highlighting products or areas of the site that may be of interest to the customer through a dedicated homepage ‘hero’ or a ‘recommended for you’ global category
  • Offering a real-time deal or discount based on activity using dynamic pricing
  • Re-marketing a product that the customer has looked at but hasn’t purchased through an ‘Are you still considering…’ email after the shopper has left the site

SJK wear with thisSt John Knits shares “Wear This With” suggestions for most of their products, helping customers assemble a stylish, coordinated outfit quickly and easily.

Another form of personalization leverages collectible demographics of the customer, based on a combination of first- and third-party data (from social sites like Facebook and Twitter) and what the user has already shared.

Targeting customers in this way could involve:

  • Leveraging contextual messages and items based on geography, age, gender, etc. In some cases, sites could even display an entirely different homepage with information specific to the user
  • Emailing personalized messages using first name or other identifiers
  • Leveraging a third party tool or data management platform to target an audience

tipsy elves collegiateTipsy Elves promotes their collegiate line using Facebook Ads targeting alma maters listed on Facebook profiles.

An alternate form of personalization involves using the behavior and demographics of other consumers to predict how the target customer might behave.

Predictive personalization might involve:

  • 'You might also like...' product suggestions based on what others users have bought
  • Retargeting based on shared interests and demographic qualifiers with regular site buyers on social media

hall winesHall Wines showcases wines that are both similar and different to the one a consumer is viewing.

There are a number of benefits to including personalization tactics in your ecommerce strategy. It’s often a straightforward way of increasing engagement as customers are more likely to pay attention to messages that seem specific to their interests, or mention them by name. Personalization offers retailers a chance to develop and strengthen bonds with customers. By demonstrating that they care about their shopping experiences being worthwhile and relevant through targeted content, retailers are able to build trust and satisfaction. Finally, on the business- and revenue-generating side, personalization will ideally encourage conversion and increase the likelihood of repeat purchases.

While personalization can be a worthwhile means of building and maintaining customer relationships, it also raises a number of concerns. For one, nearly every online shopper is aware of the serious threat posed by hackers and cybercriminals. Privacy and transparency concerns could lead to serious user discomfort with a high level of specific targeting using identifiers. Further, people are receiving more emails than ever before. With too many touch points, brands risk seeing opt-outs and unsubscribes. Along those lines, unsolicited recommendations and ads can be a nuisance, even if they are targeted. Finally, the customer doesn’t always want what demographic and behavioral data says that they want. Relying on personalization too heavily can close the door to discovering new things about the buyer. For instance, showing a 30-year-old man living in Florida swimsuits makes sense, but he could be shopping for a younger sister, or planning a trip to Alaska.

As brands and retailers continue to calibrate their marketing mixes, personalization remains an effective tool towards driving engagement and sales, as long as companies remain aware of major risks, such as cyber security and email marketing oversaturation.