When you go to a traditional, brick-and-mortar store, you are typically greeted by an employee who can answer your questions and direct you to the specific product or service you need.
This type of interaction not only alleviates the headache of searching aisle by aisle for the items you need to buy, but it also helps you feel valued as a customer. Thanks to this personalized, one-on-one service, you will probably be more likely to visit that store again.
This is the sort of positive experience that you want to offer to your customers, even if you do not have a physical store for them to visit or employees to welcome them at the door.
While you cannot provide this exact in-person experience with your online customers, you can accomplish the same positive results by using personalization for your ecommerce website.
This guide will help you learn more about using personalization to help connect with your audience, increase your profitability, and develop lifelong customers.
What is ecommerce personalization?
Ecommerce personalization is a tool that ecommerce business owners can use to organize their websites so that website visitors see the most relevant and helpful products they will need right away. This helps shoppers save time, and it introduces them to new, useful products and services.
Just like a traditional brick-and-mortar store employee can immediately direct customers to a product so that customers do not have to search all over the store to find what they need, personalization provides potential customers with the best possible products that suit their unique preferences and needs from the moment they click on your ecommerce website.
This is accomplished in a few ways:
Personalized product recommendations
One of the most beneficial ways to include personalization on your ecommerce site is through personalized product recommendations on your homepage and product pages.
When members of your target audience click on your website, they should be able to see product recommendations that are relevant and useful without looking too hard.
Say you have an online pet store, for example. An avid mini dachshund lover is more likely to be interested in making a purchase from your ecommerce website if there are product recommendations like toys and treats for small dogs on your homepage than they would be if you only had cat-related product recommendations or they saw cat-related products first.
When customers buy a product, you can also use personalization to recommend other products they might like. If someone buys a pair of leather boots from your ecommerce site, they would probably benefit from recommendations like leather boot conditioner.
Personalized product recommendations help shoppers save time and energy, which will in turn be profitable for your business.
Sending personalized discounts is another way business owners use ecommerce personalization to grow their business.
This entails offering discounts to customers based on their interests, previous purchases, and customer profiles, which will help them feel heard, appreciated, and valued.
For instance, a customer who just recently bought a baby crib from your website would probably not like to receive a pop-up featuring a discount on cribs. Using personalization AI, ecommerce businesses would know to offer this customer a discount on other baby-related items instead.
Furthermore, personalization can be used to offer a discount to a first time website visitor, who is likely less willing to spend a lot of money right away, increasing the chances that they will convert when given the opportunity to do so.
Many ecommerce business owners use personalization for their call-to-action buttons in order to to help increase their conversion rate and avoid wasting time trying to gain a conversion from someone who has already completed a desired action.
A new shopper who is interested in buying a new clothing accessory and has never visited your website before might be enticed to sign up for your email newsletter if you offer a coupon for accessories in exchange for their subscription; however, this offer would be confusing for someone who has already subscribed to your email list.
Using personalization for call-to-action buttons prevents these mix-ups from happening and significantly increases the chances that a new customer will click the button and convert.
Why should you use personalization for your ecommerce website?
While there are countless reasons why ecommerce personalization is a must for your ecommerce website, there are three benefits that you should make sure you consider:
- Ecommerce personalization helps retain existing customers
- Ecommerce personalization helps turn new customers into lifelong customers
- Ecommerce personalization helps boost conversion rates
The number one way for you to grow your business is to foster lifelong customers. According to Invesp, it cost 5x as much money to acquire a new customer as it does to keep an existing one. Furthermore, existing customers spend 31% more than new customers, and are far more likely to make a purchase from your website. The data is abundantly clear- retaining customers is essential.
In order to retain your existing customers and turn new customers into loyal, repeat customers, you need to make sure you are providing your website visitors with the best possible shopping experience when they visit your website.
That’s where personalization comes into play.
When returning website visitors see products displayed that align with their interests, or they see relevant product recommendations based on their previous searches or the items they currently have in their cart, they are more likely to view their shopping experience with your brand as a positive one instead of an experience that is negative or frustrating.
Personalization helps customers find the products they want and need faster, and it lets them know that your business values their time and cares about their shopping experience and overall satisfaction. This helps build loyalty and encourages the people who visit your website or make purchases from your ecommerce business to buy from you again.
Another benefit of ecommerce personalization is that it will directly lead to a higher conversion rate. When customers see product recommendations that they find relevant, they are more likely to add the products to their online shopping cart.
If your website visitors see coupons for the products they need or other perks that add value, they are more likely to subscribe to your email newsletter or convert in other ways.
You should use personalization for your ecommerce website because it will pay off with greater customer retention, an increase in lifelong customers, and a decrease in the amount of money you have to spend to make sales in the future.
Collecting data for ecommerce personalization
There are two main ways for you to gather the information you need in order to use personalization in these ways:
- Surveys: Surveys are an explicit way to garner this important information. These tools allow your website visitors and email subscribers to answer specific questions so that you can segment them and provide them with relevant product recommendations and offers.
- Data collection: If you do not want to ask your website visitors for this information explicitly, there are other forms of data collection:
- Using software or other paid data collection and personalization companies
- Tracking website interactions (product page visits, products abandoned in the cart, pages clicked)
- Tracking customer searches
- Tracking customer purchases
- Tracking the source of your traffic (referrals, ads, returning customers, etc.)
- Location data using customer IP addresses
Businesses and ecommerce personalization
Ecommerce personalization has increased the conversion rate and customer retention of several ecommerce businesses spanning a variety of industries.
Amazon, the king of using personalization, uses tools like dynamic pricing, on-site product recommendations, and targeted email ads to provide a unique shopping experience tailored to each individual Amazon shopper.
First, Amazon encourages visitors to sign in to their Amazon accounts in order to use their Amazon search and purchase history to make recommendations.
Once shoppers are signed in to their Amazon accounts, Amazon provides personalized product recommendations on the homepage, allowing them to tailor recommendations to each individual shopper.
Below, you will find four product categories that Amazon is recommending to a shopper inspired by their shopping trends and previous purchases. Because of this shopper’s interest in electronics, phone accessories, and apps & games, they will see product recommendations from these categories.
In addition to providing broader categories like the ones shown above, Amazon also offers niche recommendations based on previous reading history, order history, and search history. Below, you can see where Amazon recommends different car accessories based on a shopper’s previous shopping habits (where odds are they browsed for similar accessories).
Amazon also asks customers to answer questions in order to show them better product recommendations. This helps ensure that they are not suggesting products that will not pique their customer’s interest.
In the example above, Amazon uses a shopper’s search history to determine that they are likely a fan of the Seattle Sounders. Then, they ask a question to confirm so that they know whether or not that shopper would be interested in Seattle Sounders products and product recommendations. If the customer only looked at Seattle Sounders products in order to buy a gift for a friend, for instance, they would probably not respond well to similar recommendations in the future. This brief survey allows Amazon to truly understand the desires of their customers so that they can provide helpful, accurate, personalized recommendations for every single Amazon shopper.
Thanks to Amazon’s recommendation algorithm, they are able to offer one of the most personalized shopping experiences of any online retailers. This use of personalization on their website is responsible for roughly 35% of their sales and their high conversion rate. Ecommerce personalization is a priority for Amazon because it has drastically improved their ability to make sales and convert website visitors.
These benefits are not limited to major ecommerce retailers like Amazon. Smaller businesses can also see the advantages of using ecommerce personalization when they use this tool for their ecommerce websites.
Superior Lighting, which offers residential, decorative, and wholesale lighting goods, saw a 35% higher site-wide conversion rate after making conversion rate optimization changes including delivering personalized emails to customers.
Likewise, Rockflowpaper, a company that specializes in products designed by and for women, saw a 23% increase in conversions when they made changes including deploying 1:1 personalization across their ecommerce website.
Starbucks, saw an uptick in online orders when they incorporated the chatbot “My Starbucks Barista,” which is able to collect preferences and other data from orders and searches to provide more personalized order recommendations, into their mobile app.
Businesses, both small and large, are able to use ecommerce personalization in order to raise their conversion rates and increase their bottom line.3