Personalization guide for ecommerce: Techniques and examples

In 2020, retailers experienced the acceleration of a pivotal macroeconomic shift – arguably, one of the most significant in decades. Over 15,000 retail stores closed across the United States, which fanned the fears of many retail marketers. However, as with any disruptive event, 2020 came with an opportunity for retailers, as online consumption nearly doubled.

As consumers chose to shop online in droves, the shift to digital rose to the forefront of retail marketing strategies. Now, many retail marketers are pondering how to bring the same personal experience shoppers get in brick-and-mortar stores to their online stores. The most forward-thinking retailers are even exploring how bringing proactive and predictive marketing strategies to online shopping can help them surpass their in-store experience.

On the surface, it may not seem possible to deliver a more personal experience online versus in-store. The internet has a reputation for being impersonal. However, that reputation doesn’t live up to modern scrutiny. For example, Netflix curates the shows you’d like to watch using your previous viewing habits, while Spotify creates daily playlists based on your favorite musicians or podcasts. 

Time and time again, it’s been proven that with the right personalization strategy, you can connect with customers on an individual level. So, if you’re wondering how to become the next Netflix for online shopping, personalization is the key. Let’s take a closer look at exactly what personalization is, why you should do it and which elements should be included in your strategy.

What is ecommerce personalization?

When retailers create personalized interactions and experiences for their online stores, they engage in ecommerce personalization. This starts by engaging customers based on their individual shopping context and then delivering exactly the experience and recommendations they want at that particular moment in time — keeping in mind that their needs and desires could change at any time. All of this occurs through the use of elements like dynamic content, personalized product recommendations, personalized email outreach, and similar tactics.

A good ecommerce personalization strategy should incorporate the following traits:

• Personalized marketing – To engage in ecommerce personalization, it is absolutely essential to personalize as much of your marketing outreach as possible. This will make every engagement smarter and more effective. 
• Multichannel – No matter what channel a consumer interacts on, any outreach should be consistent with their current personal journey. This is essential to ensuring a seamless experience.
• Immediate – Marketers should have the ability to immediately send messages in a way that is integrated and context-specific after consumers take certain actions.
• Retention-centered – Personalization helps drive long-term revenue through repeat purchases. This will expand your average customer lifetime value.

These practices will help you turn reactive, promotion-driven shoppers into informed, proactive shoppers. While reactive shoppers only purchase products on a one-off or incentive-related basis, proactive shoppers are brand loyal, tend to buy more over time and are far more likely to become cross-category shoppers.

Focusing on winning proactive customers takes a more sophisticated marketing strategy, but that investment will pay dividends once shoppers become increasingly loyal to your store. This will create a path to growth and profitability, among other benefits.

The benefits behind ecommerce personalization

Now that we know why ecommerce personalization is important, let’s dive deeper into some key benefits. Here are three ways that personalizing your ecommerce marketing strategy will directly contribute to your brand’s bottom line.

• Repeat buyers — 80% of shoppers only buy once. While some retailers may offer special discounts or other promotions to convince them to return, this is a short-sighted way to encourage a second purchase – and likely won’t result in a third purchase. But if you base your outreach strategy on a customer’s unique preferences and take a relationship-building approach to marketing, they will start to view your store as a way to satisfy their ongoing needs. This approach will increase your customer lifetime value and improve overall ROI.
• Full-price buyers — When your strategy is heavily promotional, your brand equity fades – and so does your bottom line. With a personalized marketing strategy, you’ll win customers based on loyalty, relevance and merit. Instead of offering discounts, use personalized value-based incentives through your loyalty program, like how Madewell offers free hemming to their Insiders who purchase jeans. This will improve your margins in the short and long term.
• New customers — Customers want the same kind of personalization from you that they get from Netflix. Cater to your shopper’s every preference when it comes to sending marketing messages, whether that’s a specific timing, frequency, channel or affinity. Throughout the outreach process, highlight your most unique and core asset as a brand: your product. This will help you impress and acquire new customers.

These three benefits sound enticing – but how do they affect your bottom line by the numbers? Let’s refer to some interesting statistics that showcase the positive impact of eCommerce personalization. 

• You have less than 7 seconds to capture a shopper’s attention – and with personalization, you’ll be able to show consumers the most relevant products first.
• Markdowns cost the retail industry $300 billion in 2018, but personalization helps you selectively employ markdowns only when needed. This will help preserve your margins.
• Retailers saw a 142% increase in revenue when implementing email campaigns with personalized one-time sends.
• Over 21% of all U.S. sales took place online in 2020.
• 39% of all offline sales are influenced by digital channels. 

As these statistics suggest, ecommerce personalization can help you overcome common challenges and enjoy top-line benefits. However, keep in mind that enjoying the fruits of personalization hinges on your ability to properly design that experience.

Designing a personalized ecommerce experience

Here’s another telling statistic — did you know that while 39% of retail brands consider improving the customer experience to be an urgent priority, as few as 12% believe they are actually good at delivering a personalized experience?

This is why it’s crucial your brand takes the time to plan your personalization strategy and find technology to support those efforts. With that said, designing a comprehensive personalization strategy requires the right guidance. To help you get started, let’s break down the design of a personalization strategy into a few simple steps.

Assess market sentiments

When designing a strategy to enable personalized experiences, it’s important to first look at your target market and your offerings broadly. Think about the general attitudes of your customers and what needs your products tend to fulfill. Considering the four dimensions below will give you a healthy start:

• What is their purpose for buying?
• How urgently do they need your products?
• When do they purchase your products?
• What channels are they active on?

Next, move on to assess the typical lifecycle of your customers. Common stages include exploration, evaluation, purchase, replenishment and review, but this can differ depending on how much decisioning goes into a typical purchase. A retailer that sells cosmetics might expect a quick buying cycle with product replenishment as an inevitability, but a brand that sells high-value power tools might expect a longer exploration and evaluation stage with no foreseeable replenishment.

Using data to help you through this process will enable you to create a precise outline of who your customers are and why they choose your products.

Uncover shopper insights

Once you’ve collected data to gain visibility among various data blind spots, it’s time to put them into a data model that will provide 1:1 personalization. However, for retailers, a generic data model is missing one big factor — the product catalog.

This is where the retail data model steps in. This data model, designed specifically to enable personalization in a retail setting, unifies customer, behavior, and product data. Let’s take a closer look:

• Customer data — Customer data describes who takes an action. For instance, what device are they using? Where are they using it? What is their customer lifetime value?
• Behavior data — Behavioral elements help retailers understand a customer’s typical browsing process, which products/assets they like to interact with and when they tend to engage.
• Product data — This describes what the customer acted on. Personalization sounds like it’s all about the customers — but in retail it’s just as much about what you can offer them and the different attributes of those products.

Using this data model, you can begin to determine each customer’s preferences and affinities. For example, you can identify if individual customers are more likely to purchase a certain product by analyzing their past and current behaviors. Then, you can determine which channels they’re most receptive to, the best time to reach them based on behavioral patterns, which products they like and even the typical price they like to pay for products. This will help you deliver highly relevant outreach that will boost sales. 

We know what you’re thinking — collecting and analyzing all of this data sounds like a lot of work. And the truth is, if you’re doing this manually or with outdated technology, it is. 

It’s best to use a retail-specific personalization solution that can collect a large volume of ever-growing customer, behavior and product data automatically, then analyze that data to understand shopper preferences.

Gain Intelligence Through Technology

Finally, tie everything together by curating the customer experience using different personalized elements. Here’s a small sampling of different personalized elements with which you can start:

• Personalized channel targeting — This helps you send marketing messages on the channels where consumers are most active and gives you the ability to follow them across channels with consistent messaging. Additionally, it helps you avoid contacting customers on channels they do not like. For example, you can use a predictive audience to find customers who tend to unsubscribe from emails and contact them using Facebook from the outset.
• Personalized product recommendations — These personalized recommendations take into account customer, behavior and product data to show customers the products they’re most likely to be interested in. This will help you improve your marketing relevance and increase sales.
• Personalized email content — By personalizing the copy within your emails, you can better curate your email outreach. For example, you can use a formal or a casual tone, or you can promote a product you know your customers will be interested in. This will increase the probability that they will open the email, click through and buy.
• Personalized offers and discounts — Not every customer needs a discount to buy, while other customers need an enticement like free shipping to submit their purchase. Personalizing your offers and discounts will help you preserve your margins while preventing damage to your brand equity.

When you begin creating curated experiences, it’s important to start small and scale up. Try choosing just one item from the list above, and only expanding to other elements once you’re confident in your strategy.

6 techniques to help personalize online commerce

There’s no single set of best practices for personalization. This is because personalization is extremely subjective by nature — and it’s subjective to both the retailer employing it and the consumer receiving it. However, there are some common techniques that your brand can employ to optimize your strategy. Let’s take a closer look.

1. Use 1:1 personalization

Although some guides may use segmentation (or hyper-segmentation) interchangeably with personalization, segmentation and personalization are two distinct practices. While segmentation divides customers by broad factors like location or product interest, personalization creates a unique experience for a single, individual customer.

In practice, segmentation and hyper-segmentation attempt to ensure your emails go to relevant groups – however, this doesn’t entirely prevent you from sending a poorly targeted message. Personalization, on the other hand, all but guarantees your outreach will be relevant since it examines each customer individually.

2. Integrate your entire product catalog

Retailers need a solution that can assess their entire product catalog quickly and with minimal human intervention, then keep an up-to-date list when products are newly stocked or removed from the catalog. 

Don’t settle for a simple data feed — if your product catalog undergoes any changes (as is common in retail), your ESP will need time to catch up, lowering your agility. At the same time, it will give your marketing technologists a serious headache when it comes to setting up and repairing these data feeds.

Instead, you need an email service provider that builds your catalog into its very foundation. This will help your campaigns react to changes in your product catalog faster and with more accuracy. 

For instance, you can ensure you only send product recommendations for what’s actually in stock or immediately send outreach using triggered emails when products are new to your catalog, back-in-stock or experiencing a new markdown.

3. Deliver personalized product recommendations

Personalized product recommendations help boost sales by showing customers highly relevant products. While there are many tools and solutions that say they offer personalized recommendations, not all recommendations are created equal.

These recommendations should be automatically curated using predictive analytics to enable better personalization. A high-quality solution should be able to send products with a certain category – or no category — in mind and deliver these recommendations onsite, in emails or among the customer’s preferred social channels.

4. Optimize your email send time strategy

A good email marketing strategy is essential for most consumer-facing businesses, and this is doubly true for ecommerce. For that reason, retailers need to pay special attention to all facets of email marketing — and this includes send time optimization.

Many retailers already know good timing is essential to the message’s success. However, despite this, they might get send time advice from general surveys that make claims like “consumers are most likely to open emails at 12pm and again at 6pm.” While this may be true for a majority, ambitious retailers should tackle this from a more precise, individual basis.

AI-driven email marketing technology will help you accomplish this automatically. By tracking an individual customer’s behavior, you can optimize send times based on what your solution learns about their habits. Then, these emails can be scheduled on an individual basis to maximize engagement. For example, while one customer who checks their inbox each morning may receive an email at 9 am, you can send the same series to a customer that will check their inbox at 7 pm.

You can get these times down to the minute and adjust based on individual preferences, too. For instance, if a customer tends to open their emails shortly after 9 am, you could schedule your sends for 9:08 am. These few minutes may not seem too important at first, but it could make all the difference when it comes to your position in their inbox.

5. Find discount affinity

Frequently handing out discounts to make a sale will often end up harming your business in the long run. This is because constant discounts and offers can give customers the impression that you’re a discount brand, which diminishes your margins and makes your customers less willing to buy at full price. To combat this, only send discounts to customers who need them to make a purchase.

This process should be driven by AI through predictive analytics. The algorithm will analyze a customer’s responsiveness to discounts over time and predict if it’s essential to close a sale or not.

6. Ensure Consistency Across Channels with Landing Pages

If a customer visits a certain page through a marketing channel such as email, social media or display ads, make sure you’re sending them to a personalized landing page that directly corresponds with what they clicked on. This can include personalized copy, personalized images, personalized recommendations on the page or a personalized offer – just to name a few.

Taking this customer-focused approach will ensure the customer experience flows and matches their current standing in the customer journey across channels.

Examples of brands with great personalization strategies

Now that we’ve explored how to develop an ecommerce personalization strategy and provided a few techniques to help you along the way, let’s examine how successful retailers used personalization to their advantage.

Lane Bryant optimizes multichannel personalization

Multichannel strategies are known for helping businesses make the most of marketing communications. For instance, research reveals that multichannel helps businesses retain 91% more customers year-over-year and that multichannel shoppers tend to have a 30% higher lifetime value than single-channel shoppers.

Lane Bryant, a women’s fashion retailer, is a notable example of a brand that uses multichannel strategies to maximize the success of their campaigns. In a discussion with Eric Gohs, VP of Performance Marketing at Ascena Retail Group, he had the following to say about their multichannel strategy:

“If we think about how shoppers engage with the brand, they do so while moving across multiple channels — they don’t just engage on email or with display media or on the ecommerce site. It’s all one shopper’s behavior and it feels fluid to her, so it should feel fluid to us too. We need to have a cohesive view so we can surface recommendations and engagement opportunities consistently for each shopper as she moves across those channels. For example, if we’re firing a modal off her propensity to purchase in a specific product category, that should be consistently available wherever she wants to interact with us.”

By stepping back and taking a focus that tracked the customer’s journey – not their campaigns – Lane Bryant can dynamically personalize assets across channels. Employing this strategy on their site netted a 72% lift in revenue.

Evo Enacts Personalization at Scale

Evo is a retailer of outdoor and fashion apparel, with a focus on activities like skiing, biking, surfing, hiking and more. In the past, they relied on an impersonal batch-and-blast email strategy. However, over time they determined personalization would be more effective at acquiring and retaining customers. After all, their products appealed to a broad range of customers, including many different types of athletes as well as fashion-conscious consumers. There was no one-size-fits-all message for a group that diverse.

By employing 1:1 personalization and automating their email campaigns, they were able to slowly build their ecommerce personalization strategy. Initially, evo had no personalization or automation capabilities. Over time, by using a retail-specific email marketing solution, they were able to create their first campaigns that sent outreach based on certain customer actions or changes in their product catalog.

Then, using that same email marketing solution, they expanded their strategy to include 15 different personalized campaigns in just a short period of time. Additionally, since they employed automation, there was no need to acquire any additional staff — and they enjoyed a 15-20% increase in revenue from their new personalized campaigns.

Conclusion: eCommerce personalization is inevitable

To compete in a digital first world, retailers need to move from the current, transactional nature of commerce into something far more personal. Adopting a personalization strategy is one of the best ways to do this for retailers. However, taking up a personalization strategy requires a partner who can provide the technology you need to get your campaigns off the ground, ensure their initial growth and give the insight needed to continuously optimize your campaigns. 

This will help you ensure that you stay ahead of not only consumer needs, but the competition as well.