Groupon says its focus is on the bottom line, rather than top-line growth.
Personalize before, during and after the sale
Consumers today don’t view the Internet simply as a library or a store, where they can find information or make a purchase. They view it more like their favorite coffee shop, a place where they can catch up with family and friends, and where the barista knows their favorite beverage.
The same kind of personal experience consumers have come to expect on online social networks and the blogs they frequent, the web equivalent of the local Starbucks, is also what they want when they visit retail web sites. They expect e-retailers to know them on a personal level from prior visits and to respond accordingly.
To achieve this goal, retailers must consider upgrading key parts of their e-commerce technology portfolios. Beyond adding dynamic personalization engines that suggest products consumers are likely to want, retailers can apply personalization strategies to online advertising, customer service and e-mail marketing. Those personalized strategies must be applied pre-sale and post-sale, as well as during the purchasing process.
By expanding personalization strategies to more consumer touch points, e-retailers can create an online store consumers want to visit and that delivers a shopping experience that makes them want to stay, return and recommend to friends.
“Even though we’re living in a virtual world, shoppers don’t want to be just an order number to e-retailers,” says Bernardine Wu, CEO and founder of FitForCommerce, a best practices e-commerce consultancy that helps e-retailers define requirements and select e-commerce technologies. “As demonstrated by the boom of social media, consumers instead want to be able to interact on a deeper, more personal level. With e-retailers facing stiffer competition for acquiring new customers, we stress to our clients that retailers need to apply personalization strategies across their entire business, across all points of contact.”
The heart of any online personalization strategy begins with data. The more the retailer knows about the shopper, such as her needs, her likes and dislikes, the better the odds of suggesting products she will buy, crafting marketing and advertising campaigns she will respond to, and providing the service she needs to make a purchasing decision.
A fast start
Data gathering begins as a consumer logs onto an e-retailer’s web site. That means retailers can make use of the available information immediately to establish a personal connection with the consumer, for instance, by showing her products likely to be of interest.
Even if the shopper is a first-time visitor to the site the retailer can still determine products likely to be of interest based on her IP address. Armed with that information, a retailer, for example, can create a unique shopping experience for consumers with IP addresses from Boston.
Alexander Interactive, an e-commerce design and engineering firm, has done just that for Steinersports.com, a retailer of sports merchandise and memorabilia. Consumers with a Boston-based IP-address arriving at the site will see only merchandise and memorabilia related to Boston’s professional sports teams.
“Personalization technology has become so advanced, retailers can be more nimble in managing the hierarchy of their content and product mix on the fly, even if they don’t have much of a profile built on the consumer,” says Alex Schmelkin, president and co-founder of Alexander Interactive (Ai). “Dynamic personalization teaches retailers how to interact with consumers in new and different ways.”
Indeed, suggesting products consumer are likely to purchase represents only a portion of how retailers can apply personalization strategies. Retailers can also extend personalization to online banner and display ads on sites their customers frequently visit, such as news, entertainment and sports sites, to drive traffic back to the retailer’s site.
Customized online display and banner ads enable retailers to cut through the ad clutter by personalizing the marketing message to an individual consumer.
Online display ads can be customized to each consumer, using the same tracking cookies that help retailers present personalized recommendations on their e-commerce sites. For instance, a consumer who has just viewed women’s summer wear on a retailer’s site, but did not make a purchase, can be shown an ad from the retailer for “Summer-Ready Outfits at Great Prices” when she is visiting a non-retail site.
To place a personalized ad, retailers work with vendors that operate, or work in conjunction with, online ad networks, which draw information from cookies placed in consumers’ browsers by web sites in the network. When a consumer that previously visited an advertiser’s site moves on to another web site in the ad network, the network can show that consumer an ad customized using information from the consumer’s profile.
“Personalized ads are a way to target consumers with offers for items they want using greater precision, because the ad message is a one-on-one message, as opposed to a broad message seen by millions of consumers,” says Pedro Santos, chief strategist, e-commerce, for Akamai Technologies Inc., provider of content and application delivery services.
Akamai operates and owns an ad network that provides quality reach to 100% of online shoppers. Akamai also operates and owns the unique data co-op that comprises more than 6.3 million anonymous shopping data points from across more than 550 consumer retail websites—from virtually every shopping category. Participating retailers can place ads on third-party sites in the network, such as information and entertainment sites. The network uses anonymous shopping data to determine when to show a specific ad to a consumer. “Serving up more relevant ads increases conversions,” adds Santos. “This provides retailers with efficient, transaction-generating advertising at scale, along with pay-for-performance pricing that helps them increase online sales.”
Showing an ad featuring summer dresses to a consumer who has browsed the summer wear section of a retailer’s site makes sense, as does showing a consumer an ad featuring the items she left abandoned in a shopping cart. Retailers also are anxious to turn passive browsers to active purchasers. All of these scenarios seem well suited for target online ads.
Unfortunately, it’s not always easy for retailers to reach consumers like this. Why? Many advertisers are using a less personalized approach to retargeting efforts because they lack the right technology and data to do so.