How ecommerce personalization is shaping the future of online shopping

We live in a world where attention spans are shortening and digitally-savvy shoppers want to find what they want, when they want it, with the minimum of effort. That means ecommerce must continually evolve to satisfy this increasingly demanding audience.

Personalization is at the heart of this evolution. It’s helping to present content and products that are relevant and engaging to each individual user. Personalization places the customer at the center of the online shopping experience, rather than expecting them to find their way through a tangle of loosely connected product inventories and search results, in the hope of stumbling upon something that suits their tastes. At it’s best, personalization combines the knowledge of an experienced real-life salesperson with the ease and accessibility of the online experience.

But most current approaches to personalization haven’t yet managed to become truly personal. It’s often not quite a 1-to-1 experience as it works by developing cohorts of shoppers based on common behavioural trends – essentially making recommendations to one person based on the preferences displayed by another.

There is also still a reliance on the shopper being able to describe what they’re looking for in the first place, often using vague search terms that can’t accurately paint the picture they have in their head, or perhaps having to first navigate through generic menu titles, links and tags. But most people shop with their eyes; they don’t want to have to describe what they’re looking for, they just want to find it, quickly and easily. Ecommerce personalization is a way to make this journey smoother for both shopper and retailer, taking into account each person’s own tastes.

But only now, through combining the power and speed of artificial intelligence with the persuasive principles of personalization, are online stores starting to harness the potential of truly individual shopping experiences. By intelligently learning what each user likes and wants, and personalizing the experience to match, online shopping platforms are becoming more user-friendly than ever before – leading to increasing sales, improving customer retention and growing revenue.

What is ecommerce personalization?

Let’s start off with the basics: what exactly is ecommerce personalization? The clue is very much in the name with this one: it’s all about delivering personalized experiences – an experience that speaks directly to each individual customer, aligned to their tastes and preferences, satisfying their immediate wants and needs. It’s about delivering the right content, targeted at the right people, at the right time.

The modern shopper is impatient and spoiled for choice. If they don’t find what they want almost immediately on one site, then they’ll quickly jump off and try another vendor. Personalization is the perfect way to address these needs, by delivering exactly what a user wants, without them having to do very much, and often without them even realizing they needed something.

Personalization in one form or another has been around on the web for years. For example, have you ever received a marketing email from a big brand that has your name in the subject line? That is a simple example of personalization at work. Many email marketers have seen increased open rates from this quick trick of adding the recipient’s first name in the subject line.

Some other ‘quick and easy’ email personalization tactics you’ve probably come across: getting a free coupon for a local restaurant on your birthday; being sent offers from voucher sites for things happening near to where you live; receiving discount codes for items similar to ones you’ve bought recently.

Email represents one of the most common places to see personalization in action. But advances in AI and machine learning have opened up a whole world of possibilities for creating personalized experiences for shoppers at pretty much every touchpoint of their journey, from research, to purchase and beyond. Ecommerce stores can now use real-time personalization, learning what a customer wants in just a click or two and delivering a uniquely tailored version of the website based on the traits identified in that particular person. For the user, the experience is seamless – they see what they want much quicker once they arrive at the online store.

The result? Happier, more engaged customers who are quick to spend more – which leads to happier retailers who see their sales go up and customer retention skyrocket. Ecommerce personalization is not just the future of online shopping; it’s happening right now and retailers of all sizes are reaping the benefits of these improved customer experiences.

How personalization is improving the ecommerce experience

Personalization is a relatively simple concept, but with some very complex workings behind it. Delivering a truly tailored online shopping experience relies on the ongoing analysis of an almost countless number of data points and interactions, using a sophistication that is simply not possible in brick and mortar stores. Imagine a shop assistant trying to frantically rearrange the promotional displays every time a different shopper walked in. That’s effectively what’s happening with ecommerce personalization, with each user getting their own version of the store, tailored to their tastes – but it’s happening smoothly and seamlessly.

In many ways, personalisation is not just evolution, it’s a revolution for ecommerce. Retail websites have relied on the same structures, information architecture, taxonomies and methods for organising and displaying products for the past 10 years or more. And conversion rates have stagnated in that time.

The UX mantra of ‘Don’t’ Make Me Think’ is often stated as an aim, but can you really say it’s been achieved in the world of ecommerce? On large inventory stores, users still have to do an awful lot of thinking, lots of non-intuitive searching and scrolling, tapping or clicking to try and find what they are looking for. As a result, they often give up or settle for something that isn’t quite what they had in mind. A successful shopping experience relies on sites having properly tagged their products, labeled their categories and organized their inventory. It also relies on the language of the customer matching the language that the retail site thinks they will use and depends on a one-size-fits-all style algorithm for recommending related products. Then the shopper still needs to use filters, checkboxes, top navigation, sidebar navigation, page navigation clicks, all while trying to avoid distracting pop-ups and irrelevant messages. Far from a perfect solution when you break it down – and also pretty far from removing the need for the user to think.

Customers are impatient. There’s little room for error when they shop, or you’ll lose them in a flash. With the average conversion rate for ecommerce typically being around 2-3%, that means more than 97% of your visitors are leaving your store without buying anything. If you can nudge your conversion rate up above 3.6%, then that would put you in the top bracket of ecommerce performers, according to some industry stats – and more importantly, could mean a huge uplift in revenue.

So how do you stop so many users leaving your site without buying? Deliver them a fast, easy-to-use and relevant shopping experience, which presents products they’re interested in with minimal effort required on their part. The numbers show it’s a worthwhile approach too, as while nearly three-quarters of consumers get frustrated when content is not relevant to them, nearly half will spend more if their experience is personalized.

An introduction to some of the most effective types of ecommerce personalization

You’ve probably encountered personalization in some form or another when browsing the web or shopping online. It can include fashion stores showing gender-specific items on the homepage depending on whether you are male or female, related items displayed next to an item you’re viewing, emails from a retailer trying to hook you back in with items similar to something you bought recently, or pop-up messages appearing with your name on as you try to leave a site. You’ve probably also enjoyed a personalized experience in more subtle ways on various sites you’ve been on recently, often without even realizing it.

Personalization is all about making a consumer’s experience more relevant – helping them achieve the desired result quicker. Let’s look at some of the common ways that personalization can do this for online retailers.

1. Product Discovery

Personal shoppers may seem like the province of the rich and famous, but you’ve almost certainly seen the ecommerce equivalent of this across a great many online stores.

For example, Amazon presents items ‘Inspired by your Wish List’, as well as using a peer-based recommendation model when showing you items that are ‘Frequently bought together’ or ‘Customers who viewed this also viewed’. Almost every modern ecommerce store uses similar tactics, displaying ‘related items’, ‘people also bought’ or ‘other items by Brand X’.

These recommendations are a form of personalization, but traditionally they are done in a way that depends on users sharing behavioral traits. For example, your website CMS might allow you to ‘tag’ your products, allowing you to group related items together, so when a customer adds one item to their basket, it will automatically display other items that the website owners have predetermined might also be relevant. Or a more sophisticated method might use preset algorithms that will show related items to one user based on them browsing the same items as another previous customer, in the hope that the shared behaviors mean they both want to buy the same things. But the predetermination involved means you could argue that it isn’t actually personalization at all; it uses algorithms that don’t account for the fact that no two users are the same. It’s dependent on grouping shoppers into buckets, deciding in advance what related items would be relevant to them – every shopper who clicks on the same hiking tent, would then be showed the same set of recommended camping lanterns, for example. So you could call this ‘fake personalization’.

AI-powered personalization engines, such as Sentient Aware, understand products at a much deeper level than tags or the shopping habits of others. This allows for real-time personalization, learning what a customer wants and making recommendations in tune with their own personal tastes. This means the recommended items are unique to each shopper, not based on pre-ordained personas. Aware learns about the user’s tastes based on each item they view, so the recommendations are more likely to resonate and appeal and more likely to lead to a purchase.

2. Visual Search

The language of search is limited. That means relying on a user to describe what they want in a search box is flawed. What are you wearing right now? Grey shirt, blue jeans, black boots. Sounds a pretty accurate description, right? Now try searching for those items in a large ecommerce store and you’re likely to be presented with an overwhelming amount of options, including many which are mistagged or simply irrelevant.

Trying to whittle down these options with filters can be equally frustrating; finding what you’re actually looking for can be a long and arduous battle of scrolling and clicking.

But with AI, that’s changing. AI-powered solutions like Sentient Aware can actually analyze the images–not just the tagged metadata of the product–to get shoppers to the products they really want to buy. Aware recognizes and combats these limitations with image-based searching technology. The unique vector analysis actually studies the product image itself, finding good matches in recommended products in the same way a salesperson would – searching by how something looks, not through a limited list of tags or vaguely descriptive words.

Each click contributes to the story too: the more a user interacts, the more Aware can understand about their tastes and what they’re actually looking for, so the results and recommendations become more and more accurate and personalized.

Big brands and large-scale ecommerce stores are already embracing this new method of merchandising. For example, leading eyewear retailer Sunglass Hut uses it to power ‘My Frame Finder’, an interactive and mobile-friendly search function that makes AI-curated recommendations by searching the inventory for visual matches based on the user’s initial chosen preferences.

See the real-time recommendation engine in action:

3. Alternative products

At some point most shoppers have suffered the disappointment of finding that perfect outfit, only to discover that their size isn’t available. It’s equally disappointing for retailers, as it means they’ve missed out on a sale.

But this doesn’t have to be the case. In a brick and mortar store, the assistant will do their best to stop you leaving by trying to find alternative similar items – and this is a tactic that can be deployed ever quicker and more effectively online.

Sentient Aware’s ‘Save the Sale’ feature learns from the shopper’s behavior and preferences, including knowing size from previous selections, to instantly scan the product inventory and present the best matches if the first choice product is out of stock. This reduces the chance of the shopper leaving to find it on another site, capturing their attention with attractive alternatives which they are more likely to add to their basket.

4. Dynamic landing pages

If you search for ‘men’s running shoes’ and land on a store homepage displaying nothing but women’s underwear, you’re probably going to feel like you’re in the wrong place and awkwardly get out of there as quickly as possible, just grateful for the fact that nobody could see you. High bounce rate is a conversion killer for ecommerce stores – and with typical web users having an attention span of just 8 seconds, that means if they don’t see something relevant to them immediately, they’re probably going to bounce straight off your site without even trying to find what they might need.

Making content seem relevant is essential when trying to get visitors to engage with your site. Paid search advertisers have been applying this principle for years, ensuring that landing pages are as relevant as possible to the advertisement somebody clicked on and the search term they used to get there.

But say you wanted every advertisement to go to your homepage? Your site would ‘know’ a particular user was interested in women’s clothes, based on the information fed through from the ad they clicked on, so could dynamically load a version of the homepage that prioritized women’s clothes, having already learned that this is most relevant to what you want.

Using this same principle, artificial intelligence allows for many more complex methods of ‘learning’ about a customer from the very second they land on your site, allowing you to present them with the content on your homepage that is most likely to capture their attention. But dynamic homepage content is not even half the battle. A medium sized ecommerce site could easily have thousands of pages, when you take into account all the different products and categories (millions of pages for the biggest retailers). Add to that the fact that 70% of searches are made using long-tail keywords, it becomes clear why a significant proportion of shoppers may not even see your homepage, landing on other sections of your site instead. That means the ability to display personalized content whenever and wherever they land will dramatically increase your chances of retaining that shopper.

Predictive personalization uses data that it already knows about a customer as soon as they land on a page, wherever they’ve come from, dynamically loading content that it thinks will be most relevant. The more a user clicks and interacts, the more an AI personalization system can learn and predict about that user.

Retailers using Sentient Aware’s real-time personalization technology can ensure that the product listing pages their shoppers see – whether on the homepage or in any product category – are personalized in the moment to each individual shopper. Able to understand buyer intent from both current and previous shopping sessions, Aware delivers a much more relevant set of products right when customers enter the online store, and can update these products to be more and more relevant as they continue to browse the site and make selections.

5. Intelligent remarketing

The benefits of ecommerce personalization don’t end when a customer concludes a sale, or even when they leave your site without purchasing anything. In fact, some of its most powerful and lucrative use cases come from increased user retention and lifetime customer value, as well as recapturing sales that would otherwise have been lost.

Cart abandonment remarketing is now a common practice. In fact, here’s something you’ve probably encountered: you added a product to your cart but never completed the purchase, then you see adverts pop up for those same items in the days that follow or get emails from the retailer reminding you to come back and finish shopping. In fact, it is estimated that around three-quarters of shoppers abandon their purchase after adding items to their cart. So going after these lost sales can be a very large target market.

Similarly, retargeting visitors who didn’t get as far as adding to their basket, but looked around your store is another increasingly popular approach. By building up a profile of what they looked at, you can present adverts, emails or other marketing methods that reference specific items that would suit their tastes and shopping habits.

The same of course applies to your existing customers. Knowing what you know about them from their previous purchases, you can use laser-targeted marketing messages to introduce them to new items or additional products the would like. By making these items as relevant and personalized as possible, you make it tantalizingly easy for them to buy from you again. True personalization can whittle down the products to their size and typical budget, while combining well-chosen products with some of the other email personalization techniques we’ve touched on can make this form of remarketing a very powerful ecommerce strategy, increasing the lifetime value of your customers.

It may already feel like remarketing is everywhere. According to a 2014 study by ad platform AdRoll, nearly three-quarters of all marketers spend a significant portion of their budget on retargeting. And it’s something that customers are receptive to – 72% of millennials are ‘favorable’ to being retargeted, according to Kissmetrics. Personalizing advertising makes it more relevant and more useful, so it’s less likely to irritate users and less likely to be ignored. In other words, when it’s done well, it’s more useful for customers and delivers a better ROI for retailers.

But as with any tactic that becomes widely used, the risk of users becoming desensitized to it grows, so it’s important to stay ahead of the curve and keep building on the successes. Using AI-powered personalization allows you to reinvigorate your remarketing efforts, by creating more targeted content than ever before, content that is targeted to each individual user. Sentient’s AI platform learns from each interaction a user has with your site, so instead of creating buckets of ‘similar’ customers who are all served the same email or the same advert, it can identify a unique buying pattern for each different person. This can then power truly individual marketing messages, presenting your customers with items chosen just for them.

What are the benefits of personalization?

When done well, ecommerce personalization is the equivalent of walking into your own perfect store, where everything is laid out just for you, all the products you see match your own tastes and needs, while the world’s most helpful, knowledgable and lightning fast store assistants are on hand to make super-accurate recommendations. That is why 75% of consumers say they like it when content is personalized to them, boosting sales by up to 8%.

For shoppers, it means a smoother journey; they find what they want quicker, shopping is more pleasurable and intuitive, while for the retailers, this increased engagement leads to higher order values and greater customer loyalty.

What personalization means for shoppers

When messaging and products presented are relevant to each individual consumer, it creates a real-time, one-to-one shopping experience. This reduces the effort needed for customers to find the products and information that is important to them. It removes the dependency on traditional product discovery methods such as search bars and filters. This way, customers can often find what they want without even having to type.

Personalized messaging also delivers a more intimate shopping experience, and often helps put a smile on a customer’s face. Personalizing the touch points where you interact with your customers, pre-purchase, on your site and post-sale, all helps them to become more engaged in the journey and so more likely to complete a purchase, with personalization intelligently removing the barriers to purchase at every step of the journey.

What personalization means for online stores

Speaking directly to your customer has always been an effective approach for increasing engagement. This applies as much in a seemingly anonymous ecommerce store as it does in a corner grocery store. Personalization gives online stores another edge over brick and mortar retailers, who can’t shape the store to suit every different person who works through the door.

Sentient Aware’s AI-powered platform allows you to do this at scale, for every single visitor. Intelligent personalization doesn’t just build a profile of typical customers, it analyses real-time actions and matches the online experience to different levels of buyer-intent. This means no more having to rely on generalized personas to shape the shopping experience, personalization uses machine learning to identify what is important to each visitor, intelligently customizing the experience for them.

This helps to reduce bounce rates by delivering the information they want, upfront and fast. Engaged customers are more likely to return, purchase and add more items to their basket through data-based product recommendations. That means increased lifetime revenue per customer, which is great news for an ecommerce site’s bottom line.

How personalization is delivering big wins for ecommerce sites

Personalization delivers an unrivaled understanding of what’s important to each customer, information that can be used at every stage of the user journey. Marketing messages can be made to resonate with each individual, using a personal touch and smart product recommendations to keep consumers coming back to your site.

Crucially, the customer’s journey to finding what they want to buy is made much more efficient too. Personalization helps to organize product catalogs in a way that makes sense to shoppers, instead of relying on inaccurate search terms or sifting through tags. It allows you to create intelligent layouts that adapt to showcase the most relevant and engaging products to each customer, placing them front and center at the time they will have the biggest impact.

Intelligent personalization satisfies today’s demanding consumers by delivering the content they need at the time that they need it. It powers a user experience that is easy for your customers and more likely to result in a purchase. It is the most engaging way to delivering an optimized shopping experience that your site visitors want, which in turn will drive increased loyalty and higher spending – a win-win situation for consumers and retailers alike.

Learn more about cutting-edge, AI-powered personalization and recommendations with Sentient Aware

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