Ecommerce personalization was once a unique way to stand out from the competition and earn customer loyalty. Now, it’s a customer expectation. In fact, 77% of customers demand a personalized customer experience according to a Netcore report.
What’s more, personalization works. McKinsey & Company research shows that companies that skillfully execute personalization generate 40% more revenue from these activities than average businesses. Clearly, it’s important not only to understand personalization but to also excel if you want to boost earnings. Here’s what you need to know to get started.
What Is Personalization in Ecommerce?
Ecommerce personalization is the practice of creating an individualized shopping experience for your online customers. It involves using a customer’s unique data to display dynamic content, which provides personalized interactions and experiences.
Some of the data you can use to personalize the shopping experience for your customer includes:
- Browsing behavior
- Previous purchases
- Geographic location
- Browsing device
Why Is Personalization Important in Ecommerce?
Rather than serving the same generic content to every customer, personalization allows you to display relevant offers to each individual shopper. It gives you the opportunity to give every person a VIP experience, offering personalized search results, product recommendations, push notifications, dynamic pricing, and more.
Put simply, personalization improves the customer experience which ultimately boosts sales. For example, McKinsey & Company research shows that personalization leads to 10% to 15% higher conversion rates.
Data shows a 20% higher customer satisfaction rate when customers interact with personalization programs. If you can increase customer satisfaction, you’re more likely to grow customer loyalty and therefore increase profit.
Plus, customers are demanding personalization. Research from Epsilon and GBH Insights found that 80% of customers want retailers to personalize their experience.
The Benefits of Ecommerce Personalization
Personalization reduces friction. It allows you to remove distractions and show customers the products they’re searching for. This increases the chances of converting shoppers into paying customers, which means more profit.
For example, your homepage can adjust based on each shopper’s IP address. This automatically ensures they’re viewing your website in the proper language and currency. Likewise, you can provide product recommendations based on browsing history, leading your customers to the items they’re likely interested in.
Improves Customer Experience
A personalized experience makes shopping more enjoyable for customers. Through personalization tactics, you can cater to each customer’s unique needs. This allows your website to remember a customer’s preferences, showing them the products they’ve expressed interest in, and making checkout fast and easy with stored payment information.
Increases Customer Loyalty
Personalization can help you repeatedly engage with customers and drive loyalty. By consistently offering an excellent, frictionless shopping experience, you build rapport. Plus, the more interactions between a customer and your brand, the more data you can collect. You can use that data to design better, more relevant experiences, which drives loyalty even higher.
Provides Customer Insights
The more data and analytics you gather from customers via personalization, the more you can understand your audience. Those customer insights are invaluable. They allow you to learn about your customers’ transactional, behavioral, and engagement trends. You can use that information to make informed business decisions about product offerings and marketing.
Helps Your Brand Stand Out
Personalization is becoming more common, but not every brand is doing it. Even amongst brands that are exploring this practice, some do it better than others. By putting together a strong personalization program, you can stand out and encourage shoppers to choose your brand over the competition.
The Challenges of Ecommerce Personalization
Adobe data shows that 68% of customers will stop buying from a brand that they feel disrespects consumer data. You can build trust with customers by allowing them to opt-in to personalization campaigns.
As a business owner, you’ll also interact with some customers who just don’t want to share their data. In a survey from Smart Insights, 81% to 90% of participants said they’d share their data for various benefits, like quicker product searches or exclusive discounts. That leaves 10% to 20% of the population that isn’t interested in sharing.
Knowing where to draw the line with personalization is also critical. Customers sometimes think marketing campaigns take it too far.
For example, 41% of shoppers report that they think receiving personalized texts from a brand when they walk by their store is creepy. Likewise, 35% of customers feel uncomfortable when they see ads on social media for items they looked at on a brand’s website. Despite these numbers, it’s important to point out that 72% of customers say they’ll only engage with personalized messaging. It’s a fine line to walk.
Ecommerce Personalization Examples
With continuous shopping, your website can remember what items a shopper looked at during previous visits. Then, it shows them a list of those items, making it easy for them to pick up where they left off. Here’s an example on the Target website:
Think about your favorite streaming services - they show you a “continue watching” list. Likewise, Spotify displays your “recently played” at the top of the app:
These tactics get you to jump back in fast, which lowers friction and keeps you on their platform for longer. In the same way, continuous shopping makes it easy for shoppers to spend more time and money on your site.
Product-Detail Page Recommendations
Product-detail page (PDP) recommendations appear at the bottom or to the side of a product page. They can include complementary products, which would ideally increase the number of products a customer buys. PDP recommendations can also be a means of upselling the customer to a similar but more expensive item.
Here’s an example from the Anthropologie website:
You can personalize PDP recommendations based on browsing and purchase history. While they increase sales, they also improve the customer shopping experience, making them a win-win.
Personalized Best Sellers
People depend on social proof to make purchase decisions. Your best sellers are the most popular ones - giving them immediate social proof. You can personalize this section of your site by showcasing the most viewed or sold in the user’s geographic location.
See how Public Goods uses this tactic:
Why does this matter? Someone shopping in the midwest likely has different food preferences than someone living in Los Angeles. Likewise, someone shopping in Canada probably needs warmer clothing than someone browsing your site in Florida. With personalized best sellers, you showcase hyper-relevant products, which can boost sales.
Once a customer is on your site, you want to keep them there. One way to do this is by in-session retargeting. You can set a rule so that certain actions or time spent on a page triggers a popup that matches a shopper’s in-session behavior, like Voluspa does:
For example, you might offer a 10% discount when a shopper’s cart value reaches a certain level. Or, you could offer free shipping to customers who visit your site three times or more.
You can regain a shopper’s attention through social retargeting. However, this approach can sometimes come across as creepy, so it’s important to be strategic.
Remind shoppers of your brand’s unique value or a previous search they completed on your website. You may gain trust by showcasing social proof, like UGC (user-generated content) or a review. Or, make a purchase irresistible by offering a discount. Be sure to retarget within seven to 14 days, as this is when customers are most likely to convert.
You can also get a visitor to return to your site via SMS and email if they’ve shared that contact information with you. As you might expect, the key to being successful with these tactics is to personalize. A few ways to do that include:
- Ask for a review on a recent purchase and include personalized product recommendations
- Tell the customer about new arrivals since their last visit
- Remind them about items they left in their cart
- Offer a discount and remind them of recently viewed products
Ecommerce Elements You Can Personalize
Most marketing teams are already under various constraints, whether time-related or financial, which may make it difficult to execute a personalization program. However, understanding the different elements that you can personalize can make it easier to create a plan and get the technology necessary to put it in place.
Here are the key elements to personalize in ecommerce:
- Demographics: Serve each customer content that makes sense for their demographics, including their location, language, and interest. For example, adjust banner content or website currency according to demographics.
- Products: Suggest products that align with your customer’s browsing or purchase history. Show items that are similar or complementary.
- Pricing: Offer targeted discounts that align with a customer’s browsing and purchasing history. For example, offer a “returning customer” discount on certain products to encourage repeat sales.
- UGC: UGC shows real, everyday people enjoying your product, which makes customers feel confident in shopping with you. Show relevant UGC on your product pages to boost sales.
- Navigation: After enough visits, your system can recognize what a customer is looking for when they visit your site. This allows your navigation to automatically adjust based on prior purchases.
What's the Best Way for an Ecommerce Business to Accept Payments?
Along with personalizing your shopping experience, you can also boost sales by upgrading your payment system. With Pay.com, you can provide your customers with a smooth, seamless, and secure checkout experience.
You can use Pay.com’s APIs to add hosted payment fields directly into your app or website, keeping your customers on your website for their entire purchase.
You can also add a variety of payment methods to your site, giving your customers the freedom of choice that they want. Add Apple Pay, PayPal, Google Pay, ACH transfers, and more. Plus, give your customers the option to save their payment details for future purchases to offer a personalized, speedy checkout experience every time.
Pay.com has Level 1 PCI DSS compliance and has the most advanced security measures in place to protect your business and your customers. We tokenize credit card details and even support 3DS2 (3D Secure 2.0). This allows us to add two-layer authentication, making sure that every customer who makes a purchase is legitimate.
The Bottom Line
Ecommerce personalization is a critical practice for standing out amongst ever-growing online competition. Customers are not only used to a personalized shopping experience - now they require it. Plus, it’s proven to work, as brands that do it well experience an increase in revenue. As long as you personalize without being intrusive, this tactic could drive sales and customer loyalty.