Are e-commerce discounts and promotional campaigns doing more harm than good? And is Big Data-powered e-commerce Hyper-Personalization the solution? Let’s explore.
In this article you will learn;
- Why e-commerce discounts are killing your business.
- How to implement an effective e-commerce discounts promotion.
The Discount Problem
Imagine this, you walk into the supermarket ready to buy your skim milk, that new vegan meat substitute your spouse has been talking about trying out and the rest of the groceries on your list. And alas, there is conveniently a store-wide discount sale.
You’re thrilled, you grab what you need and head on your merry way back home happy that you could save up on your weekly grocery shopping.
Now, this may be good news for you as a customer but as a business owner, running a market-wide sale could spell revenue doom. Why? Because you just lost revenue from customers who were already going to purchase regardless of a sale or discounts. And the hesitant buyers you would have been trying to target? They may not engage if the discounts are not compelling enough for them.
Wouldn’t it be great if there was a way to leave out the convinced shoppers and target the hesitant buyers only or a specific group of customers only? To be able to identify these individuals and tailor the e-commerce discounts/ offer to what makes them bite that bullet. Nothing more and nothing less.
In brick and mortar stores there’s only little you can do about this , but e-commerce is a different story. In e-commerce, you can leverage innovative technology to implement an effective sales promotion.
Big Data Analytics for Hyper-Personalization
E-commerce Hyper-Personalization is the strategy that will enable you to tailor appropriate discounts/offers and target the right customers. Big Data Analytics is the key to unlock real-time e-commerce Hyper-Personalization.
First things first; to be able to give individuals the perfect offer and acquire them as your customers, you need to first understand who they are and their needs. You need to know your customers to cater to them.
How do you build the perfect offers for your customers without knowing what they want? How do you target the right customers if you don’t know who they are?
You need the information to answer these questions and make decisions. And you need data to get information. As the famous quote by award-winning viral marketing scientist Dan Zarella goes, ‘Marketing without data is like driving with your eyes closed’.
A Big Data Analytics powered e-commerce Hyper-Personalization system is designed to take care of these roadblocks and help you make the right decisions. It works by helping e-commerce businesses understand customers and customer needs through identifying and analyzing a customer’s demographic data points and buyer behaviour data. It uses this data to build tailored offers and automatically target the identified customers in real-time.
In a nutshell, Big Data Analytics powered e-commerce Hyper-Personalization identifies the correct customers, builds the perfect offer and enables real-time reactive targeting.
This way, you grow your sales and build a loyal customer base with minimum impact on your profit margin. It just doesn’t get better than that.
How it Works
The Big Data Analytics system operates in three distinctive steps; Collect, Analyze, React. This is the secret sauce for implementing a successful e-commerce discount campaign for your business.
Let’s take a deeper look into these three steps.
- Collect – The system enables you to track every single visitor that visits your e-commerce site and/or app; who they are in terms of their demography, every minute they spend on your website with their every interaction.
- Analyze – The system analyzes the collected data to identify your customer’s price elasticity, their interests and their buying habits. It will provide you with multi-dimensional feature analytics and recommendations based on this data for your approval.
- Target – The system will target the identified individuals with the tailored pre-approved discounts and offers via real-time reactive engagements on your e-commerce site and/or app, emails and push notifications.
All the Big Guys are Doing it
Today, e-commerce Hyper-Personalization is a common practice among successful e-businesses. Amazon started it but now everyone else is following suit. An estimated 89% of digital e-commerce businesses are investing in personalization, including Coca-Cola, Fabletics, Netflix, Sephora, USAA, and Wells Fargo (source).
Although own Big Data Analytics systems are not affordable for SMEs, there are a number of great ready-made and off-the-shelf options available for use.
What do Customers Want?
E-commerce Hyper-Personalization is not a new topic by any means and there have been a number of studies conducted on the subject. The studies clearly show that customers want a hyper-personalized shopping experience.
- On average, 71% of consumers feel frustrated when their shopping experience is impersonal (source).
- 70% of millennials are frustrated with brands sending them irrelevant marketing emails and prefer personalized emails over batch and blast communications (source).
- Personalization can reduce acquisition costs by as much as 50%, lift revenues by 5–15%, and increase marketing spend efficiency by 10–30% (source).
- The top five benefits of personalization include increased visitor engagement (55%), improved customer experience (55%), improved brand perception (39%), increased conversion rates (51%) and increased lead generation and customer acquisition (46%) (source).
These statistics prove that Big data Analytics powered e-commerce Hyper-Personalization is no longer an option but is a necessity.
Are you falling behind?