The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
Web shoppers speak with their clicks, and retailers can profit by listening well.
Online retailers have many opportunities to learn about a consumer's shopping habits. They can track not only what she buys, but the e-mails she opens, her actions on social networks and her participation in loyalty programs. And popular e-retailers like Amazon.com Inc. and Netflix Inc. have built their reputations largely by delivering highly personalized offers to their customers.
But most retailers don't deliver that type of personalization, and fewer can deliver it in all their interactions with shoppers. Instead, most retailers limit their personalization efforts to a single customer touch point, such as e-mail, effectively locking their personalization strategy in a silo.
"Most retailers are taking baby steps when it comes to personalization," says Bob Cell, CEO of MyBuys Inc., a provider of personalized product recommendation services. "Consumer expectations of cross-channel personalization are growing, which means retailers have to be connecting all consumer transactions and clicks across all touch points so they can interact with them in the same way regardless of the channel."
A true cross-channel personalization strategy extends across the web store, e-mail, online banner ads, social networks, smartphones and tablet computers. "When it doesn't happen," Cell says, "it turns consumers off."
Gaining a deeper understanding of consumer behavior begins with tracking all customer click data, not just clicks that result in a purchase. Tracking what pages, items or links consumers click on provides clues to their intent, the items that interest them and how they shop.
"There are more clicks than purchases and each click provides clues about what interests a consumer," Cell says. "Retailers can learn how to improve the relevancy of their product recommendations by paying attention to each click made by a consumer."
Retailers especially have to be thinking about personalization in relation to mobile devices, which are rapidly proliferating. Nearly half of U.S. consumers now own a smartphone, says The Nielsen Co., a market research firm, and consumers are also snapping up tablet computers. More and more consumers are using their smartphones and tablet computers to compare prices, locate the nearest store, find bargains or check on available inventory.
While these actions do not necessarily result in a sale through the mobile device, they nevertheless represent opportunities for retailers to engage consumers on a personal level, which can prompt a sale through a mobile site or another sales channel.
By formatting their mobile sites to display properly on popular mobile devices such as Android and iPhone smartphones and iPad tablet computers, retailers form the foundation to create the same personalized experience they deliver shoppers through their web site. And giving the shopper what she's looking for quickly is especially important on mobile phones.
"The key to mobile for retailers is to personalize every page with products and information a consumer is interested in, because reducing the number of clicks she has to make on a mobile device to find what she wants is huge," Cell says. "It's about remembering the consumer and her preferences and delivering a consistent, personalized shopping experience, regardless of the device she uses."
MyBuys also makes it possible for the 400 retailers in its MyBuys network to track the signal emitted by a mobile shopper's web browser and link it to a specific device. Once the device is linked to a consumer, MyBuys can follow her as she shops at any of its merchant clients and serve up web pages that are personalized based on her actions across all MyBuys client retailers.
Just as retailers need to be rethinking their approach to personalization through the mobile channel, they should be doing likewise when it comes to retargeting. Many retailers approach retargeting as a way to close a sale with a consumer who viewed items on a site or placed them in the shopping cart, only to leave without making a purchase.
Typically, the retailer sends the consumer an e-mail or shows her a display ad when she visits other sites within an ad network, highlighting items of interest along with an incentive to purchase, such as a discount for buying in the next 30 minutes.
While effective, the strategy does not make full use of the retailer's knowledge about the consumer's product preferences. Showing the consumer items likely to appeal to her based on her behavior, even though she did not view them on her last visit, can increase the chance of a sale.
"Retailers should think about retargeting as an opportunity to convert the shopper into a buyer by offering her more items of interest to consider, rather than what she just looked at," Cell says. "Personalization is all about one-to-one marketing and one-to-one marketing is about intelligently speaking to the consumer about her preferences, regardless of the channel."