Demandware says 30 of its clients booked more than $100 million in online sales in 2015, up from 22 a year earlier.
When personalization is done right, shoppers find products aligned to their tastes and needs and, more often than not, the e-retailer garners the sale.
Increasingly, consumers expect this level of service from e-retailers they frequent, says Meyar Sheik, CEO and co-founder of personalization software provider Certona. The vendor's software generates product recommendations based on a shopper's current and past on-site browsing, as well as past purchase history.
"Retailers need to think of personalization as a customer engagement strategy, not just a feature for their web site," Sheik says. "The more holistic the personalization strategy, the more engaging the shopping experience and the more consumers will gravitate to the retailer's site. The less personalized the shopping experience, the less it inspires consumers."
Personalization can be applied even when the e-retailer may not have a lot of data about a particular shopper. For a first-time visitor, merchants can initially apply data culled from the actions of other first-time customers to personalize the shopping experience. For example, the e-retailer can show a new visitor the most popular products or brands among other first-time visitors. Then, as the consumer clicks around the site, Certona's personalization software builds that customer's profile and begins showing personalized recommendations, offers and related content. Certona's personalization engine builds a customer profile after the customer makes just three to five clicks.
The more data the personalization software gathers, the more personalized and targeted the shopping experience can become. The optimal personalization implementation involves more than just tracking what pages a shopper views as she moves about a retail site and keeping a record of past behavior for a repeat customer to determine what products or promotions to show her. Retailers should also pay attention to all customer clicks to determine what information and additional content a shopper needs to not only find the right product, but decide to buy it.
"Consumers clicking on product videos or reading customer reviews should be directed to these sources of information along with targeted product recommendations, because they give the shopper the additional information they need to make a purchasing decision," Sheik says. "Personalization is like a jigsaw puzzle and making it work effectively depends on a retailer's ability to fit all the pieces together."
Sheik also recommends that retailers tie their personalization strategy to a specific action or outcome, such as increasing the average dollar amount of orders, increasing content consumption or boosting conversion rates. That makes it easier to determine a return on investment.
The mobile consumer
A retailer's ability to communicate with customers through a mobile phone is becoming a key piece of the personalization puzzle as more consumers use their smartphones in stores to comparison shop. When a consumer allows a retailer to track his movements using his smartphone's built-in location technology, a retailer can know when that consumer enters the store. It can then send a personalized offer to his phone to encourage him to make a purchase, such as 10% off on any purchase today.
Depending on how a retailer is set up, the consumer can then have the choice to purchase the product on his phone or show the offer code at the point of sale in a physical store. However, such a strategy only works for a consumer who has provided his mobile phone number to the retailer and opted in to receive such messaging. "Connecting with a consumer in a store through his phone is a great way to engage them on a personal level and generate a sale because if the customer is using the phone in the store, chances are he is comparison shopping," Sheik adds. "Mobile is the bridge between the physical and virtual shopping worlds."
Retailers should be sure to provide curated and personalized experiences to consumers no matter which channel they are shopping in, Sheik says. "Personalization is the glue for a comprehensive strategy to reach consumers on a deeper level through multiple touch points," he says, "whether they are shopping in a store or online."