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Personalization can make the difference between a customer choosing to buy from you or somewhere else. The main benefit of personalization is that it lowers friction; if your personalization algorithm is able to determine what your customers are searching for, they will be able to find it more quickly.
Other advantages of e-commerce personalization include the following:
Better conversions
Because you are assisting customers in sorting through the clutter and finding exactly what they're looking for, personalization increases the likelihood of a sale. Because the content on a personalized homepage is selected based on the visitor's IP address, the language, currency, and shipping charges are appropriate for their location, resulting in a lower bounce rate.
By providing product recommendations that are in line with their browsing preferences, you can encourage customers who are window shopping or aren't sure what they want to buy to make a purchase. The goal of personalized recommendations is to move consumers from awareness to repeat business.
In order to win back customers, you can also set up triggers for cart abandonment. Personalized offers with a time limit instill a sense of urgency.
Increased customer loyalty.
Increased customer loyalty
Personalized rewards are a better feature of the best loyalty programs than the standard point redemption. For instance, rewards within that product category should be given to customers who show interest in a particular product line.
Higher levels of customer loyalty (e.g., X number of repeat purchases within 60 days or an order value of a certain amount) should also be rewarded. Referral programs encourage customer retention and engagement by rewarding users in proportion to the quantity of successful referrals they make.
Enhanced customer experience
Customers can reduce their options with the aid of carefully curated product recommendations, promotions, and offers. Because there were too many options on a website, almost 40% of users have abandoned it.
Offering a broad range of products that appeal to various demographics means that your website needs to give users the ability to filter content and view recommendations that have been carefully chosen.
Competitive advantage.
There is intense competition among e-commerce brands, and many of them set themselves apart through price. Personalized shopping allows you to present your customers with offers that are relevant to their intent to buy.
A better understanding of your customers
First-party data, or information gathered by the company, offers a multitude of insights into the kinds of goods that consumers prefer, how they shop, and why they buy. These insights can help you refine your personalization tactics and choose which product lines to expand or phase out.
How to Start With Ecommerce Personalization
Data collection is the first step in personalization. Utilizing a combination of CRM data and website analytics, you must create a comprehensive picture of your website visitors at every stage of the customer journey.
The following data points are crucial to monitor:
First-time site visitors.
Pages viewed.
Time on site.Items wishlisted.
Items added to cart.
Exit page (the last page a visitor views before they leave your website).
Returning customers.Past purchases.
Average order value.The time interval between purchases.
Customer lifetime value.
Interactions via email or social media.
Although the aim of personalization is to tailor the experience for each individual, it is essential to develop distinct customer cohorts and personalized strategies for each group. The experience can then be further tailored for valuable clients.
Let your customers “opt in” to personalization.
Retailers have responded to customers' growing mistrust of how businesses store and use their data by offering them the option to opt-in to personalization by providing personal information and creating their own "living profile."
Customers may be asked to choose their gender and age group when subscribing to a newsletter, for instance, in exchange for customized offers. This profile includes information that the customer has specifically shared as well as information from other sources, like social media analytics or your CRM tool.
Allowing customers to self-identify their needs builds trust. It also makes it easier for organizations to be transparent about how they use customer data and comply with consumer data privacy laws including Europe’s GDPR and the California Consumer Privacy Act (CCPA).
Ecommerce Personalization Examples
By personalizing your e-commerce site, you can use marketing automation to create a unique journey for every customer that spans several touchpoints.
Serving dynamic content to traffic segments
Segments must be created by businesses with a large customer base and product catalog in order to target various demographics. For instance, you should offer each user a customized shopping experience depending on their purpose if you cater to both children in Japan and middle-aged men in the United States.
The most crucial element of your e-commerce personalization strategy is audience segmentation. The majority of e-commerce platforms and Conversion Rate Optimization (CRO) tools provide options for traffic segmentation.
The following are some ideas for traffic segmentation:
Geolocation/IP address
ITo provide individualized search results and product listings, you can identify users based on their location, state, country, and area. As examples, consider:
Displaying shipping information, appropriate languages, and currencies according to the customer's location.
Show pertinent products based on the local weather in that city, especially if you sell clothing.
Device used
Identify clients based on their operating system, device (mobile vs. web), and source channel.
Comparing PC vs. mobile: When customers shop from a desktop computer, their average order value is typically higher. Businesses that use "price steering," in which customers are presented with fewer and more expensive products when they shop on a mobile device, such as Home Depot, take advantage of this.
Traffic source: Divide website visitors into groups according to the channels they came from, such as social media, email marketing, Pay Per Click (PPC), referral URLs, and special offers.
Operating system: Depending on the OS users are using, online retailers may employ dynamic pricing.
Demographics
Age: Adapt product suggestions, graphics, and messaging to the user's age range.
Gender: When it comes to clothing and jewelry in particular, gender is a significant segmentation factor.
Job title and income: You can estimate the kinds of experiences and products that users are looking for by using their job title and income. You can tell, for instance, if someone is looking for high quality or a good deal.
Behaviors
New clients: Assist new clients in settling in, particularly if they are not familiar with your brand or website's user interface. They might require greeting messages or particular experiences to inform them about your product categories, various membership levels, free trials, etc.
Returning customers: Let them continue where they left off by displaying the items they last saw, wishlisted, or added to their cart. Offer them new items that have been added to the website since their last visit to entice them.
Subscribers to your newsletter should receive special discount codes as a bonus.
Cart abandoners:
Retargeted ads and follow-up emails are sent, and pop-up site notifications are programmed based on the intention of the user to leave and finish their purchase.
Dynamic pricing.
The pricing can be customized based on the user's demographic details, purchase history, browsing history, and overall buyer profile (e.g., whether they are a deal-seeker or quality-seeker). Other variables, such as the time of day, the prices of competitors, and inventory levels, may affect pricing.
Only one in five ecommerce companies in North America and Europe used dynamic pricing in 2021, while 17% planned to start doing so.
Pricing algorithms control prices by taking into account market demand, historical sales data, and rival price points. Slow-moving products can be priced more aggressively to increase turnover. These products can be identified by the last time they were sold, the number of visitors to the product page, and the percentage of conversion rates.
On-site targeting: dynamic content block.
A dynamic content block is an editable widget that shows various content types based on the visitor segment on a landing page or email.
The content block could show details about the most recent order, related products, last viewed products, or last viewed categories, for instance.
Dynamic content block
Product relatedness, recently viewed products, recently viewed categories, and order details are all displayed in dynamic content blocks. They are also excellent venues for announcing VIP-only sales events, customer loyalty discount codes, and calls to action to fill out surveys and questionnaires.
Moreover, you can make picture carousels or banners with regional announcements and updates. For instance, you can show pertinent content in accordance with a sale or particular event taking place in someone's city (like a music festival).4
Overlays
A website overlay is a graphical content box that covers the background content of a page by appearing in the center of it. Usually, overlays ask for an email address in exchange for a coupon, discount, or free trial, which increases conversion rates. When using overlays, timing is crucial.
The following are the best times to show an overlay:
Welcome new visitors with a quick tour of your website, a special discount for first-time customers, or an invitation to subscribe to your newsletter.
When a visitor is about to bounce, use exit-intent triggers to display an offer through an overlay that appears when the mouse is moved up to the browser toolbar.
Customers who appear to be having trouble: If a visitor appears to be having trouble completing a task—for example, they might be stuck at checkout or idling on a landing page—offer assistance through live chat or a form where they can provide their email address or phone number to get more help.
Header, footer and sliders
Use header and footer banners if users aren't reacting to modal pop-ups (the majority of users just click the "X" button to close them without viewing them). For instance, you can include other CTAs in the header or footer of your website, countdown timers for sales events, and social proof (like star ratings).
Modal pop-ups
Activate pop-up offers based on each visitor's actions during the session. For instance, you could provide first-time visitors with special offers in return for their email addresses. You can increase the average order value by providing free shipping or tier discounts when a customer adds items to their cart.
Based on variables like cart value, time spent on the website, quantity of products viewed, and others, pop-ups can be customized. For this to function, timing and action-based triggers are crucial.
Dynamic on-site personalized product recommendations.
Suggestions for "continuous shopping" let guests resume where they left off. This method, which takes inspiration from Netflix's "Continue watching" feature, tailors the homepage based on the items and preferences that users have chosen and have previously viewed.
You can also create personalized bestseller lists (eg: ‘Top 10 products in your area’).
Segmenting and extrapolating your top VIP customers.
VIP clients are the highest value in terms of average order value, frequency of purchases, and lifetime value. Customers who pay full price are the most valuable to retailers with fast-moving inventory (some customers will only buy during a sale). To find these treasures, utilize your CRM data.
The Pareto Principle states that 20% of your customers account for 80% of your sales. Pay them what they deserve. If you define a VIP segment in your CRM system without a time limit, you run the risk of capturing inactive customers. You can show them your appreciation with gifts of appreciation, loyalty programs, subscription plans, and access to special online events and previews.
Product recommendations on checkout pages.
It is necessary to set up checkout recommendations to increase average order value. Upselling and cross-selling strategies encourage customers to add more items to their cart rather than displaying variations of the item they already have.
For instance, you can display more expensive or less expensive options to fit the shopper's budget by including a "You May Also Like" widget. Along with the chosen item, you can also display related goods or accessories, like headphones that work with the tablet the customer has in their cart.
Include RFM scoring in your strategy for addressing shopping cart abandonment.
Abandoned carts cost e-commerce businesses $18 billion in lost sales revenue every year. Retargeting ads and sending out personalized reminder emails are good strategies to get cart abandoners to return. But segmenting your customer base makes it easier to pinpoint the most crucial ones, since you can't make up for every lost sale.
RFM scoring is the process of segmenting potential customers based on their behavior by analyzing CRM data. Recency, frequency, and monetary value are all mentioned in RFM analysis.
RFM analysis measures the following:
When was their last purchase?
How often did they purchase in the past?
The amount spent on each transaction.
Marketers utilize the RFM model to assign a score to each customer based on the date of their most recent purchase, the frequency of their purchases, and the total order value over a predetermined duration.
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