The growing importance of ecommerce personalization in a post-COVID world
The coronavirus pandemic has altered the retail landscape beyond all imagining.
From brick and mortar stores opting to devote more resources to their growing online presence, to emerging thriftier shopping habits, to consumers being more conscious of a brands values and ethics. The ecommerce world after COVID-19 is almost an entirely new frontier.
However, one important element that ecommerce stores can no longer overlook is the growing importance of personalization.
What is personalization in ecommerce?
On a very basic level, personalization is a strategy used to deliver individualized experiences to consumers based on their behavioral, demographic, and geographic data.
This data can be cookie or session-based, ingested from third-party apps and customer data platforms (CDPs). It then goes on to form the basis of marketing content like personalized emails, cross-sell product recommendations, and special offers to address individual consumer wants and needs.
For brands, this application of valuable data allows them to contextualize and individualize brand messaging and communications sent to consumers, which in turn helps to maximize conversion rates, build brand loyalty, and achieve general customer satisfaction. In fact, anAdweek study revealed that marketers had seen personalization boost revenues by up to 15%.
Why is personalization important?
With up to 80% of shoppers stating that they are more likely to purchase from a company offering personalized experiences, personalization has always been an important factor for businesses to consider.
Personalized ecommerce experiences foster a personal connection. Through sending relevant communication – for example, item recommendations generated based on previous purchases – brands can build loyalty and subsequently enhance positive profit margins.
Meanwhile, a consumer who has given their personal information (be it an email address or the ability to store their browsing data) to a brand but has failed to receive relevant communication may become frustrated with the experience and will be more likely to churn.
The role of COVID-19 on the importance of personalization
The value of personalization comes from being able to target the right customer, with the right offer, at the right time.
With ecommerce experiencing ten year’s worth of growth in a matter of three months, the ability to cut through the noise is now more important than ever. This increasingly fierce competition between online retailers makes personalization one of the most desired assets in an ecommerce marketer’s arsenal.
However, while shoppers clearly prefer personalized experiences and marketers agree that personalization is on their agenda, that does not always mean that ecommerce businesses are prepared, or even able, to offer it to their customers.
In July 2020, Yieldify surveyed 400 ecommerce leaders across the UK and US regarding website personalization’s challenges and its evolving future. The report found that the majority (37%) said they were lacking the expertise required to optimize their personalization strategy. A further 36% of respondents said they had either limited functionality or no personalization tools available to them, and a final 35% stated they simply did not have the time to undertake a strategy.
These findings are worrying when coupled with data from market research firm Forrester that revealed 77% of consumers had either chosen, recommended, or paid more for a brand offering personalized experiences.
A recent McKinsey report also discovered that consumer sentiment was changing post-COVID. Consumers are beginning to place less emphasis on brand loyalty, and instead are opting to focus more on getting value for money. With personalization strategies considerably helpful in retaining customers, as well as bolstering sales efforts, the reluctance to adopt personalization could be costly.
What should ecommerce websites do?
Off of the back of these findings, ecommerce websites must take full advantage of the opportunities personalization presents to them by implementing the very basics of a personalization strategy as early as they can.
Whilst tools are available to make the process more refined, ecommerce businesses can follow three simple steps to create the initial outlines of a personalization strategy blueprint.
1. Analyze your data
Initially, ecommerce sites should begin analyzing their data in order to understand their audience. Only then can a personalized experience be put in place that is both relevant to the visitor and beneficial to the business.
In Yieldify’s study, 76% of respondents said that real-time behavioral data was the most popular option for driving website personalization. Real-time behavioral segmentation is generated from in-session behaviors - sessions referring to a group of user-specific actions performed within a page on a website during a period of time, like button clicks or page loads.
These sessions give indicators of search intent, visitor motivation, or consumer desire and form valuable information that can be passed onto developers and marketers to divulge which types of users are most seeking what from a site.
2. Segment their data
When this data is acquired, ecommerce websites should transfer the information to developers and marketers in order to begin a process of segmentation – a key component that drives any personalization strategy.
Segmenting users by their behavior allows marketers to drill deep and understand how consumers interact with a business. Behavioral segmentation in particular groups consumers by their usage of your product or website, their overall knowledge of your products and/or your brand, and most importantly, by their purchasing behaviors, such as whether they are regular buyers or occasion only (birthdays or holidays).
Audiences will be more receptive to engage if they receive communication that is relevant to their interests, hobbies, or behaviors. For example, a new customer may feel overwhelmed by receiving irrelevant discount emails, but when placed in a drip email sequence that gradually informs them of the brand or product’s USPs, they may become more likely to click through due to receiving the right information at the right time.
Once this data is acquired, user-specific groups can be assigned particular actions, like specific styles of messaging or grouped into relevant drip email sequence campaigns.
3. Action their data to achieve their goal
Choosing to then interact differently depending on the behaviors of each category can help the business achieve a set goal which should also be identified once a personalization strategy is decided.
In Yieldify’s study, 58% of respondents affirmed their main motivation to deploy a website personalization strategy came from wanting to retain their customers. In comparison, 55% stated their driving factor was conversion based, whilst 45% were driven by customer acquisition alone.
With brand loyalty reductions impacted by factors such as consumers actively choosing to pursue different brands depending on their handling of the coronavirus pandemic, personalization could not only drive purchases, it could keep existing customers from straying too.
Displaying relevant offers or keeping particularly wary customers informed of safety measures and reiterating brand values could give customers the reassurance and trust that they are looking for, further cementing their personal connection.
Personalization will be a key tool in the post-pandemic ecommerce landscape
As more and more people face uncertainty across the world, the one thing shoppers do want to feel certain about is their purchasing.
Shoppers want to ensure they’re buying the right product from the right brand at the right prices, and that they’re being taken into consideration as a person, and not a sales figure, by doing so.
At this point in time, personalization is perhaps the most vital tool an ecommerce marketer can possess because it does enable consumers to feel as though their wants, needs and fears are being taken into consideration and that they are being recognized on a valued, individual level.
For ecommerce stores, actioning data to transform it into results like acquisitions or conversions will also be the difference between being left behind, and adapting to flourish in the new post-pandemic ecommerce landscape.
Read more from Yieldify on ecommerce personalization trends after COVID-19 here
Read Linnworks Guide to ecommerce personalization here
Yieldify are a team of over 100 Customer Journey Optimization (CJO) specialists, working to serve over 500 e-commerce companies. They combine products such as website personalization and email remarketing, performing Customer Journey Analysis and Benchmarking to deliver unbeatable results.