E-commerce Personalization Explained: Take Your Business Higher

Written by Natasha

Everybody’s talking about it but everyone seems to have a different perception of it. We break down the meaning of eCommerce personalization and how it’s important for the ever-growing e-business world.

What is Personalization?

Every customer of yours is unique: ranging from different ages, genders, cultures and possessing different wants and styles.

Personalization manifests slightly differently for each business in each industry, but at its core, personalization is the process of tailoring your business to cater to individual customer characteristics and preferences. Personalization gives each customer their own personalized experience, an experience designed just for you from top to bottom.

Personalization in its true essence is not a one-step or one-time task. Personalizing your eCommerce business is an integrated process that involves different business processes and different stages of a customer’s buying cycle.

Imagine this: you walk into a restaurant and you’re greeted with your name by a friendly server. They show you to your seat at a table right by the window, just the way you like it. The waiter, who knows your personal tastes and preferences, will then recommend options of your most favourite and preferred dishes, no need for fumbling through that menu. This is personalization in the physical world.

Bavarian waitress serving pork and beer
Image Source

In the age of the fast-growing digital market, eCommerce personalization technologies enable businesses to offer the same hospitality to online customers. Ecommerce personalization enables businesses to bring warmth and familiarity to the rather sterile and cold digital world.

Ecommerce personalization’s popularity is rising, and it is widely used across the eCommerce world, especially by many successful eCommerce giants. And there’s a lot we can learn from eCommerce personalization examples of these mega businesses.

Basic personalization strategies and activities common across e-commerce are personalized recommendations, personalized discounts/offers, personalized emails and personalized advertising. But eCommerce personalization does and can go much beyond that as evident by how businesses like Best Buy and Amazon have demonstrated.

It’s safe to say that eCommerce personalization is fast becoming a staple business process and synonymous with eCommerce success.

The technology behind eCommerce personalization

Predictive Big Data Analytics and Machine Learning are two very important technologies behind the concept of eCommerce personalization.

Implementation of eCommerce personalization requires the ability to classify users and make predictions that automatically alter user experiences. Big Data driven machine learning and Data Science are the methodologies and technologies that carry out this process.

To begin, understanding your customers requires customer behaviour data to be collected. Customer data can be collected in varying different methods, but the most prominent and effective method for real-time eCommerce personalization is to track consumer behaviour on your e-commerce platforms via implicit input methods.

The collected massive amounts of data which is processed through Big Data analytics is then fed through to machine learning algorithms. Machine learning identifies the patterns present in the data and derives calculated classifications and predictions based on multiple dimensions.

These multi-dimensional customer classifications and predictions are then what fuel eCommerce personalization activities.

The advantages of personalization

Increases sales – Ecommerce personalization strategy of personalized recommendations is a key way businesses can more effectively increase sales and cross-sell. By enabling customers to find what they are looking for more easily and recommending well-pairing products via personalized recommendations, businesses can expect their sales to increase significantly.

  • 80% of consumers are more likely to make a purchase from a brand that provides personalized experiences. – Epsilon

Increase revenueApart from revenue increasing by the increased number of sales, eCommerce personalization also increases revenue by effectively up-selling through personalized recommendations.

  • 40% of U.S. consumers say they have purchased something more expensive than they planned to because of personalized service.
  • Marketers report that personalization efforts can boost revenues by up to 15%. – Adweek

Improves customer satisfaction – As a consumer, don’t you feel good when you get a great offer from Amazon for the item you were looking for? Or when Netflix recommends you the perfect movie? Everyone wants to feel special, get special treatment and feel catered to and that’s exactly what eCommerce personalization enables. It’s just plain ol’ good service.

  • 71% of consumers feel frustrated when a shopping experience is impersonal. – Segment
  • 36% of consumers say retailers need to do more to offer personalized experiences. – Retail TouchPoints

Increase customer retention – A personalized shopping experience leaves a customer satisfied which in turn increases customer loyalty and the probability of customers returning to shop with the same brand again and again.

  • 98% of marketers say personalization advances customer relationships. –  Evergage
  • Millennial brand loyalty increases by 28% if they receive personalized communication. – SmarterHQ

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FAQ – Summary

What is eCommerce personalization?

Ecommerce personalization is the process of tailoring your business to cater to individual customer characteristics and preferences. Personalization gives each customer their own personalized experience, an experience designed just for you from top to bottom.

What technologies enable eCommerce personalization?

Big Data Analytics and Machine learning are essential technologies and power and enable an effective eCommerce personalization strategy.

What are the benefits of eCommerce personalization?

Increases sales
Increases revenue
Improves customer satisfaction
Increases customer retention