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What Are The Benefits Of Personalization In Ecommerce: 6 Effective Strategies & Examples

QUICK SUMMARY

Customers increasingly expect retailers to understand their needs and expectations. In this article. I'll explore the key benefits of personalization in ecommerce and provide some examples to illustrate how to use them for your online business.

TABLE OF CONTENTS What is personalization in ecommerce? Benefits of ecommerce personalization 6 effective personalization strategies

The benefits of personalization in ecommerce have become obvious as customers expect retailers to understand their needs and expectations and offer relevant products. According to McKinsey, 71% of consumers want personalized interactions, and 76% get frustrated when they don’t get them.

To catch up with this trend, digital merchants are looking for new ways to update ecommerce strategies and modify their websites to deliver personalized shopping experiences.

In this article, I'll provide six actionable ecommerce personalization strategies and examples to illustrate how brands successfully implement them in real-life ecommerce settings.

What Is Personalization In Ecommerce?

Ecommerce personalization is crafting unique shopping experiences for individual customers based on their needs and preferences. It relies on diverse customer data, such as demographics, location, browsing history, previous purchases, and device type.

Benefits Of Ecommerce Personalization

Offering personalized experiences across the buying cycle brings many remarkable benefits to retailers.

Enhanced customer experience

With personalization, customers receive product recommendations that match their unique needs. This drives a satisfying ecommerce experience, particularly when a retailer delivers personalization across all sales channels.

Moreover, businesses can remove friction points from customer journeys by optimizing the purchase experience and using convenience-oriented features, such as pre-filled credit card details and one-click checkout.

Improved conversions

Personalization addresses customer needs, thus increasing the relevance of a brand’s offerings to shoppers and encouraging them to make a purchase. According to Netcore Cloud, retailers see an average increase in conversion rates by 45% from their personalization efforts.

Stronger customer engagement and brand loyalty

Customers feel understood and taken care of when they get tailored product offers from a brand. A survey by Segment shows that 60% of consumers are likely to make repeat purchases after a personalized user experience.

Ecommerce businesses cultivating customer engagement and loyalty with personalization can significantly expand their customer base, cut acquisition costs, and boost retention rates.

Increased revenue

According to the previously mentioned research by McKinsey, companies that employ effective personalization techniques generate 40% more revenue from these activities than average players.

Competitive advantage

By incorporating personalization into their sales and marketing strategies, retailers can stand out among other brands that fail to meet customer expectations for tailored shopping.

6 Effective Ecommerce Personalization Strategies

With accumulated personal data from customers and dedicated software, digital merchants can apply multiple ecommerce personalization methods.

1. Dynamic content and product recommendations

Retailers can recommend specific products based on customer demographics, location, and purchase history on their ecommerce sites.

The effective techniques of dynamic product recommendations include tracking customers’ browsing behavior on-site and showing products similar to what they have viewed, cross-department suggestions of complementary products, and prompting customers to continue shopping where they’ve left off.

Example. Pura Vida Bracelets, an accessory business, introduced two recommendation categories on their product pages, “Products you recently viewed” and “Customers also like,” displaying similar popular products. Within the first year, product recommendations demonstrated an average conversion rate of 7.9%, with more than a 10% increase in overall revenue.

2. Personalized email marketing

An effective way to engage customers and increase conversions is to send personalized emails and newsletters with discounts for products that customers have recently viewed. Emailing time-limited offers can add urgency and increase purchase intent.

Example. Adidas sends personalized Birthday Style Ideas emails to customers with products they can like. This way, the brand values its customers by recognizing their special day and showing a deep understanding of their preferences, increasing the lifetime value of their customers in the long run.

3. Search personalization

Ecommerce website search engines can be enhanced with semantic search capabilities to provide relevant search results to each different customer, with allowance for spelling mistakes and differences in how they can describe the same product.

Example. Jenson USA, an online bicycle retailer, segmented its customers into different types of bikers to deliver web search results tailored to a particular user. For example, if a customer’s past purchase has been a mountain bike, suitable tires and gear will pop up at the top of their search results. As a result, the company increased its revenue per visitor by 8.5%.

4. Personalized upsell pitches at checkout

Another powerful personalization tactic for online stores involves targeting customers with personalized upselling, cross-selling, or downselling offers at checkout. At this point, the purchase intent is the highest, so customers are likely to buy products complementing or similar to those in their shopping cart, increasing average order value.

Example. Dominos Pizza extensively uses the downselling technique to increase average order volume. When users place an order on the website or through the app, they are offered several products priced lower than those in the cart. This is effective because buying cheaper items is tempting for most customers.

5. Abandoning visitors retargeting

Cart abandonment is a pressing problem in ecommerce, and personalization can help bring customers back to complete their purchases. For example, companies can retarget customers at risk of abandoning the cart with personalized notifications through various touchpoints, like email or messages on social media. Many shopping cart solutions offer this feature, so be sure to pick one that does.

Experts advise limiting your retargeting period from 7 to 14 days to reach out to customers when they are most likely to complete the purchase.

Example. Morvelo, a cycling clothing brand, sends customers an email reminding them of the products left in the cart and encouraging them to return and finish the purchase.

6. Personalized loyalty programs

Online retailers can personalize reward and loyalty programs to build a stronger emotional bond with their audiences and increase customer satisfaction, leading to more conversions.

Best practices for customer loyalty program personalization include personalized content and communications, tracking loyalty points accumulated by program members, and offering personalized deals to motivate customers to achieve reward goals by making more purchases.

Example. Starbucks uses machine learning-powered real-time personalization with gamification features in their loyalty app to engage customers. The algorithm makes product recommendations and comes up with personalized games to reward loyalty program members and encourage them to try new products. The games tripled Starbucks’s marketing campaign results and spendings from loyal customers who redeemed offers.

The Benefits Of Personalization In Ecommerce Speak For Themselves

Modern consumers expect personalized interactions from brands and are likely to become loyal when their online shopping experiences are tailored to their needs and preferences. By incorporating personalization into their marketing strategies and ecommerce platforms, companies can better understand customers, predict their wishes, and provide the most relevant content and offers.

The benefits of personalization in ecommerce personalization can improve customer relationships, reduce churn rates and acquisition costs, set your brand apart from others, and boost sales and profitability. Retailers that hesitate to adopt personalization today can miss business growth opportunities and fail to retain existing and new customers.

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