The COVID-19 pandemic brought about changes to many industries, including one of the most sought-after ones, the retail sector. From suppliers, manufacturers, distributors, wholesalers, and retailers to consumers, everyone was exposed to the vulnerabilities and consequences of the pandemic. Amidst this health and economic crisis, consumer shopping behavior changed entirely. Businesses realized the power of digital transformation and added a virtual storefront to their brick-and-mortar store as consumers adapted to shopping online.

While online retail sales increased sharply amidst the pandemic, e-commerce evolved faster than ever. Today, being a stellar brand is not enough to attract consumers demanding a unique personalized experience in their shopping journey. Brands and retailers must understand the growing importance of personalization in this space. This article will focus on how retailers can leverage e-commerce personalization throughout the consumer’s buying journey to succeed in online sales.

Retaining customers with better e-commerce personalization 

Consumers have gone beyond just browsing through the product catalogs and adding products to the cart for checkout. While they are more inclined towards online shopping to eliminate the pain of going to a store, they want personal human experiences that come with shopping in a physical store across the stages online. E-commerce personalization can provide them with that.

To adapt to this new consumer behavior, retailers continuously work hard to provide shoppers with an innovative customer experience from start to finish. But still, there are huge gaps between what brands think and what consumers perceive.

According to a survey (The Harris Poll) conducted by Redpoint Global in September 2021 on 1500 consumers and 150 senior marketers in the U.S.:

• 51% of marketers believe that they have delivered an excellent customer experience, in contrast to 26% of consumers who believe brands have fallen short of meeting their expectations, which estimates a gap of 25%.
• As one of the study's four core CX dimensions, 44% of marketers believe their brands performed excellently at personalization, while only 23% of consumers agreed on the same.
• 83% of marketers and 73% of consumers agree that companies struggle to meet customer expectations to deliver personalized experiences.

Research conducted by Redpoint Global in July 2022 demonstrated that 70% of consumers reported mistargeted information at least once a month, and 24% say they receive it daily. Data quality is one of the areas that enable marketers to fail in executing a personalization strategy. Marketers often cite inaccurate or fragmented customer data as one of their biggest challenges to data quality. While investment in martech remains a high priority for marketers, the lack of a system for e-commerce data integration is another area of obstruction. With an increasing number of solutions at work to drive CX, marketers often find it difficult to navigate between systems. 

So how do we implement an e-commerce personalization strategy to drive sales conversion and better customer experience? Also, how can marketers ensure their investment after e-commerce personalization gives them a profitable return? Let’s take a look.

How to personalize your e-commerce store

Personalization has become the heart of e-commerce businesses, and getting it right matters for brands and retailers today. As per a study conducted by McKinsey, companies that grow faster drive 40% of their revenue from personalization than their counterparts. Another takeaway from The Harris Poll was that 65% of consumers now believe personalization is just a part of the standard service offering. Another 39% say they will not do business with a brand that doesn’t offer personalization.

It is important to have the right technology stack to kickstart e-commerce personalization. Here are a few ways you can personalize an e-commerce website.

• Understanding the audience: No e-commerce strategy can work in real-life without understanding the audience and their behavior on the site. Your brand should understand its target audience, their needs, and what they browse on the site. You can do this by identifying whether it’s a first-time or familiar visitor and picking up the audience intent behind visiting the website. 

• Segmentation: While understanding the audience, it is important to segment them into various groups according to their traits. You can target groups with similar needs and behaviors with experiences (content, promotions, emails, campaign) unique to their expectations. This helps personalization work better and ensures customer loyalty and sales conversion. 

• Recommending relevant products: By using search behavior, clicks, scrolls, browsing history, and previous purchases, the product recommendation engine, with the help of AI and ML models, can recommend relevant products, content, and services to visitors online. You can do this through algorithms to track behavior on-page, i.e., from one’s e-commerce website, or off-page using browsing data from third-party search engines like google or bing. 

• Localizing content: It is important to have your personalization strategy match different regions with customers’ cultural expectations. Localized content helps capture user sentiment and easily connect the audience with the brands. Content localization can be done on the website using language-translated content, currency, images, units of measurement, dates, advertisements, etc., to one’s specific region. Sometimes, logos, colors on-site, and videos in the local language also help set a context to help build a relationship with the brand.

• Providing targeted offers and discounts: Providing offers and discounts to customers is a proven way to conversion and retention. From a personalized point of view, you can do it to first-time customers by providing buy one get one, seasonal discounts, or special coupons to help conversion. For repeat customers, loyalty point redemption offers on minimum purchases, etc., push the shopping interest more. Many brands and retailers also offer promotions on bundled products or use cross-selling and up-selling strategies to suggest related and complementary products.

• Resolving shopping cart abandonment: Customers often leave, keeping products in the cart, and never return or replace them with other products at a later time. Hence, shopping cart abandonment is a rising problem for online retailers. Enticing lost buyers by sending a cart recovery mail helps customers to resume shopping from where they’ve left off. Adding a button of “return to cart,” “continue shopping,” or “continue to checkout” to the cart recovery mail eases the process of returning to the cart directly from the customer’s inbox.

• Hyper-personalized campaigning: E-commerce personalization doesn’t stop when users are on the website. To create engagement, they must keep coming to your website and spending time on it. One way to do this is by using customer data from CRM software to understand their behavior and other products they would like. Then, targeting these users through email campaigns and personal messaging about products, promotions, seasonal offerings, etc. The goal of this is to bring the customers down through the sales funnel and increase conversion.

With the retail industry undergoing substantial transformation and e-commerce sales soaring to $8.9 trillion worldwide, the need for personalization on an e-commerce website is more important than ever. With this in mind, let’s look at how technology can support us and what tech stack is needed to incorporate personalization in the e-commerce business.

G2 tech stack for e-commerce personalization

As discussed, to increase sales revenue online, having an e-commerce front doesn’t guarantee any competitive advantage. Retailers have to think creatively and make smart decisions on leveraging their existing tech capabilities or investing in new ones to create a unique personalized experience for the customer on-site and off-site. 

While businesses are ready to invest in new software to meet their need for personalization, the lack of trust stops them from doing it. Per the 2022 G2 Software Buyer Behaviour Report, buyers cited that their main obstacle in the software buying process is the lack of credible content, misinformation, and unreliable vendor website. Though software buyers think vendors' website is the most important source of information, most believe user-generated content like reviews help them gain trust in the product. Out of 1002 software buyers surveyed, 85% strongly agree that they use review websites during their buying process.

G2 is the world’s largest software marketplace, and it helps more than 60 million people annually make smarter software buying decisions based on authentic peer reviews. G2’s E-Commerce Personalization Software category is specifically meant for buyers thinking or looking for software to help them implement personalization. It has 204 product listings across three different company sizes, i.e., small businesses, mid-market, and enterprises. The category has around 50 products rated 4.5 or more out of 5-star ratings by reviewers. Below is an example of a review by a user of Insider, a product under G2’s E-Commerce Personalization Software category.

G2’s E-Commerce Personalization Software category has seen an increase in review counts by 48.6% in the past 12 months. Aso of October 22, 2022, it has a total of 3,375 reportable or approved reviews, out of which 43.8% are from EMEA, leading amongst all other regions. Also, as per G2 review data by company segment, small businesses are in the lead with 56.5% reviews, showing that they have actively implemented and used e-commerce personalization solutions in their business. 

What’s next for e-commerce personalization?

The existing brick-and-mortar businesses are actively looking for e-commerce platforms to help bring their business online. Similarly, companies with e-commerce websites seek solutions that can personalize their existing websites for their customers. It is evident that the E-Commerce Personalization category has enormous growth potential as businesses continue to focus on serving each customer with unique experiences and helping boost sales revenue for businesses.

Edited by Shanti S Nair