Facebook ads’ return on ad spend rose 33% year over year, while purchase rates jumped 68%.
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Once that data is captured at checkout, along with the product code for the item being purchased, it is sent to the retailer’s personalization engine and cross-matched to the customer’s profile. That profile may reveal, for instance, that the consumer has viewed certain items online. The retailer can then send the store sales associate a message pointing out that one of those items is now on sale. That can lead to an immediate add-on to the consumer’s planned purchase.
Retailers also can reverse the process, updating the customer’s profile with information about products she bought in-store, making it possible to offer more relevant recommendations the next time she comes to the retailer’s web site. “Cross-channel personalization is about creating a holistic view of the customer to avoid making recommendations that are irrelevant in any sales channel,” says ChoiceStream’s Johnson.
The mobile challenge
One burgeoning sales channel that retailers are trying to get their arms around is mobile commerce, and personalization can play a number of important roles in this new arena. Millions of consumers are accessing the web through their increasingly sophisticated smartphones. But consumers using their mobile devices to shop or research a product often discover the web store they log on to is not formatted to the size of their phone’s screen.
Instead, what they often see is a web store formatted for a personal computer. The result is that pages cannot be fully displayed or are compressed so that it’s hard to view much of the site’s content.
“Personalization in the mobile channel starts with serving up a web store that is formatted to the mobile device,” says Znode’s Vishwanathan. “A properly formatted store is going to remove the page clutter by limiting the product catalog so it shows fewer items per page and has shorter, simpler navigation paths that make it easy for the consumer to manage the shopping experience.”
The type of mobile device being used by the shopper can be identified by the signal its operating system sends to the retailer’s server. “An iPhone and a Blackberry will format the display of the web store differently, so retailers need to instruct their servers to identify which type of mobile device it is connecting to so it serves up the store in the right format,” says Coremetrics’ Squire.
The limited viewing area of a mobile phone’s display makes it even more imperative to present the products a particular consumer is most interested in and not a broad assortment.
“Mobile devices are not suited for browsing a retailer’s store, and the more personalized retailers can make the mobile experience the better the chance they have of the mobile shopper making a purchase through the device or finding an item they like enough to purchase through another channel,” says ChoiceStream’s Johnson.
Repeat mobile shoppers can be identified from the tracking cookie from a previous visit, which allows the retailer to recognize the customer’s profile and initiate a personalized shopping experience. Customers that have previously purchased from the e-commerce site but that are logging on for the first time from a mobile device may be asked to register so the retailer’s personalization engine can link that information to their profile.
“Retailers need to identify mobile shoppers and their preferences so they can deliver a rich, personalized shopping experience that will appeal to the mobile shopper,” adds Squire.
An apparel retailer, for example, will want to help a mobile shopper find items of interest by suggesting brands, products, styles and colors the consumer likes and that complement items she purchased in the past.
“Personalization in mobile commerce is about creating a store that showcases the items consumers want and allowing them to check down their preferences until they get to the specific item they want and then proceed to checkout,” says Vishwanathan.
With any personalization strategy, Vishwanathan recommends that retailers subject it to A/B testing, pitting alternatives against each other, to create the most effective program possible. “Personalization allows for a lot of different strategies, and testing two strategies head to head in the same channel will tell retailers which strategy works and which doesn’t.”
Once retailers hit on a personalization strategy that works, they can use it to dig deeper into understanding a shopper’s product preferences, how she shops by channel and what type of marketing campaigns she responds to, and apply that knowledge across each customer interaction point.
“Consumers can tell when a retail site has the intelligence to make relevant product recommendations,” says MyBuy’s Cell. “Retailers can no longer afford not to create personalization strategies because consumers that receive relevant product recommendations are not only apt to convert at a higher rate, they are likely to generate higher tickets. With retailers facing stiffer competition that makes personalization a must-have.”