How personalized merchandising is changing the E-commerce world for both shoppers and retailers

Online retail is more competitive than ever before, which means retailers face an ongoing challenge to make their website stand out. The playing fields are leveling in many traditional differentiators such as price, delivery options and product choice, so e-commerce sites must find ever more innovative ways to entice customers and secure a sale.

Personalization is one such area of innovation that is assisting forward-thinking retailers retain customers. Tailoring shopping experiences to every individual consumer is an exciting way to separate yourself from your competition, boosting conversion rates, growing customer loyalty and increasing order value, helping you to make the most of your entire product inventory.

In this article, we will explore why ecommerce personalization resonates so strongly with shoppers and look at how you can use it to your advantage.

What is personalized merchandising?

Personalized merchandising is all about showing the right products, to the right people, at the right time. When done well, it allows you to give each shopper the impression that your store is built around their individual tastes and requirements. It also makes it as easy as possible for them to find what they want and complete a purchase easily and quickly at a time when their intent to buy is high. This reduces effort needed to complete a purchase. A vital ingredient to increasing conversion rate is undoubtedly making your website easy to use, so making the product discovery phase as simple and speedy as you can helps to remove a big pain point for many shoppers and paves the way to more sales.

Areas of a site where personalization can be used include homepages, category pages, product collections, related products or suggested add-ons. With the power of personalization, each buyer may view their own tailored recommendations, with the products displayed being chosen specifically to match their own profile, tastes or personal requirements. Sentient Aware is an AI-powered personalization platform that allows stores to make use of intelligent merchandising, where product listings on these key pages are curated in the moment, personalized to each person. It can use information from previous visits or the current shopping session to build up an instant understanding of buyer intent to ensure the products presented are relevant from when the customer lands on your site and at every step of the journey, intelligently learning more about what they are looking for as they continue to browse.

For an e-commerce site, these product listing pages represent valuable real estate in terms of where and how to showcase goods for sale. Merchandising allows a store to present the range of items they sell in a way that hooks a customer in, sparks their interest and encourages them to make a purchase. By personalizing the items shown prominently to each shopper, relevancy is increased, making it easier for each person to find what they want and making it more likely that they will make a purchase.

Despite the deeply complex technology behind it, for shoppers, this personalized approach to merchandising is a subtle experience – and a less ‘aggressive’ form of marketing compared to more traditional tactics. This softer approach appears to resonate with many customers, who respond in increasingly positive ways – nearly half will spend more if their experience is personalized.

 

Instead of forcing often-irrelevant products on them in an ‘interruptive’ way (think, for example, about interstitial ads that interrupt you by taking over an entire web page with a car you’ll never buy, while you’re trying to read a news article), this approach tailors the experience to them when they are in the right mentality to shop and are ready to be helped along their journey to purchase. But crucially, the speed with which AI-powered personalization can work means that they are essentially being given help before they even ask for it and often without even realizing it. It’s like walking into a brick and mortar store and all the shelves have been rearranged so that just the products that match your personal requirements are right there in front of you.

Of course, other marketing methods still have their place. You need to raise awareness and get people to your store, after all. And personalization has a role to play in improving pre-sale messaging across multiple platforms too, for examples, through retargeting or email personalization. But intelligently curating the products a customer sees when they do visit your site can provide a real boost to conversion rates, maximizing the return you get on the dollars you’ve spent to acquire site traffic in the first place.

A shopping experience built for speed

Modern shoppers have a world of choice at their fingertips. We live in a buyers’ market, they are increasingly impatient and web savvy, so if they don’t find what they want quickly on one site, they can easily bounce off and find it somewhere else.

Online stores that sell something so unique that customers have no choice but to buy from them are rare. The reality for most ecommerce site owners is that there are multiple competitors out there, spanning zip codes and international borders, each trying to compete on price or some other way of convincing a customer to buy from them. Combine the fact that consumers are so spoiled for choice, with the ever-decreasing attention spans of digital natives (just 8 seconds, according to studies), and you must do something special on your site in order to keep shoppers interested.

But while there may be no shortage of choice out there, finding what they want hidden among vast product inventories can still be something of a challenge. Current search models are not always the most intuitive, as they don’t cater for the visual process in which many people prefer to shop. Most people shop with their eyes. In a department store their eyes are drawn by impressive displays, large images and well-presented items that stand out if they match the color or style they are looking for, while there are shopping assistants on hand to help out if you have any specific requirements.

Many ecommerce sites, on the other hand, still rely heavily on text search or simplistic site navigation. But this means the customer must be able to accurately describe what they want in just a few simple words, something which is not quite as simple as it may seem. The language of search is limited and relies on all of your customers using the same small selection of words and ensuring that you have matched these same terms when tagging the products that you think they would be referring to.

But the machine learning technology behind Sentient Aware is solving these issues, by giving customers a more intuitive method of visual search and presented more accurate matches for related products. Instead of relying on tags and search terms, Aware analyzes the vectors of your product imagery, finding good matches in recommended products in the way a human might do, by matching how something looks, not how something is described.

This is not far off from how a good salesperson might approach a problem. If a shopper approaches with a dress she likes that isn’t available in her size, the assistant would use her knowledge of the inventory to find similar looking items that would suit the customer. Sentient Aware works in a similar way, but uses artificial intelligence to quickly and efficiently find the most accurate related items for online stores based on visual clues from the shopper.

Sunglass Hut is one such store that faced the issue of limitations of search language. Have you ever tried describing the difference between two different pairs of similar-coloured sunglasses? It can be tricky. Instead, the online eyewear store uses Aware’s visual search technology to power its My Frame Finder tool. This interactive feature asks the customer to select some of their favorite styles from a small selection of images, then intelligently curates further recommendations that are personalized to the visual tastes of each shopper.

It’s faster, more enjoyable and ultimately a more personalized experience than trying to type what you want into a search bar, helping the customer reach the preferred end goal quicker.

Creating positive customer experiences through personalization

As described, personalized product suggestions create a more intimate shopping experience, not dissimilar to having your own personal shopper laying out a selection of products all picked just for you.

This intimate experience helps to boost engagement, with three-quarters of consumers saying that they like it when content is personalized to them. And it makes sense too, as the products are more relevant. But being presented with images of items that you like also provides a dopamine hit. Dopamine is a neurotransmitter, releasing chemicals in the brain that control pleasure and gratification. In simple terms, shopping for things that you like the look of makes you feel excited and happy – even Stanford scientists say so. It’s a logical step, in that case, to suggest that presenting customers with exciting images that are exactly tailored to their tastes will provide even more of this instant gratification and excitement.

By learning their visual tastes, the platform can find options that are most appealing to them, quicker than any personal shopper can. But it goes a step further, being able to search the entire store catalog much faster than any human shop assistant, using intelligent algorithms rather than instinct to find the best matches. Give you customers a huge choice, and the ability to find what’s right for them easily and quickly, and they’ll buy more, more often.

Their journey to purchase will be quicker and smoother, they’ll discover products they may not otherwise have found using traditional online search techniques, plus the experience will mean they are more likely to come back to shop with you again and again, increasing the lifetime value of your customers. It can also help you attract new buyers faster through the power of positive referrals, as those who had had a good experience are three times more likely to recommend you to friends.

Recreating real-life shopping in a digital world

Personalized recommendations act like a super-charged personal shopper service. But one area where online shopping has often struggled to compete with brick and mortar stores is the ability to see items up close, to touch, feel and try on the goods that you’re most interested in.

But having a visual conversation with your customers allows you to make the most of your most important visual assets. Sentient Aware’s Shop the Look feature gives shoppers the freedom to customize popular looks from editorial images, personalizing trends and recommending complementary items to help people create a complete outfit that suits their tastes.

The image-powered recommendation engine and visual search options put images front and center of the shopping experience, just as if you were in a physical store. As a visual experience, it is also optimized for mobile and makes the most of the screen. Boosting mobile conversion rates is a huge area of potential growth for ecommerce sites, as smartphones and tablets make up nearly 60% of traffic, yet only 38% of revenue, according to a study of €230 million of online purchases last year. That leaves a lot of ground to make up in the mobile shopping experience.

Aware can help make up that gap, by delivering three times the conversion rate on mobile. This is partly down to doing away with the need for endless scrolling or clicking on non-intuitive filters and menu options to find what you need. Instead, image-led product recommendations are presented to you in mobile-friendly format using fast and intelligent analysis. It’s an experience that is seamless across every device, giving customers what they want, when they want it.

How personalized merchandising can help you reach your ecommerce sales objectives

While e-commerce revenues have grown hugely in recent years, conversion rates have stagnated for many online retailers, hovering between 2 and 3% for most. But personalization is one area of genuine innovation that has helped leading stores make their online experiences more persuasive and enticing than ever before.

Personalized product recommendations give customers what they want and get them to the products they love quickly and efficiently. They’re less likely to lose interest and go elsewhere and more likely to stick around and buy from you. The numbers speak for themselves, with Sentient Aware customers on average doubling their desktop and tripling their mobile conversion rates. Think about how that can impact your revenue and profit margins and the cumulative impact on your bottom line can be huge.

 

Intelligent product discovery also makes the most of your entire inventory, with products that you perhaps have not spent money promoting now being presented to the customers who would be most interested in seeing them. On average, stores using Aware’s AI-powered product discovery platform get eyeballs on 75% of their entire inventory every week.

 

We’ve also seen a 16% higher order value for Aware customers. Intelligent recommendations and add-on products mean your customers are seeing more of the items that interest them, image-led recommendations are building entire outfit recommendations in one visit and every item presented is more likely to excite, inspire and resonate. Showing consumers more of what they want at the most relevant time is a simple principle but and incredibly effective approach, which is helping ecommerce stores to grow the value of their orders. The personalized experience and after-sales marketing is also enticing more people to keep returning to your store, increasing their lifetime value.

 

Altogether, personalized merchandising helps to deliver more return on investment for your entire marketing mix. Visitors that come to your online store are more likely to find what they’re looking for. Those users are consequently more likely to buy, so the investment you’ve put into acquiring those users stretches further. Personalizing the experience makes the journey smoother for shoppers and more cost-effective for store owners, meaning it’s win-win for consumers and retailers alike.