In the domain of eCommerce, which is really all about marketing, sales and customer operations, the trend now is to personalize interactions with customers. That’s because marketers and sales professionals have long wanted the prize of significantly higher click-through rates, the attendant higher frequency purchases and ever larger basket values, which is where turnover and profit growth resides.
Personalization is not straightforward; it requires more than the artistic skills used for building a great looking web site. It requires knowledge that has a high degree of complexity, demanding the advanced technical skills that only modern eCommerce technologists who work with just a few platforms, such as SAP, possess. It covers a variety of areas that have varying scope, from customization of simple options and selected content to deep personalization, predictive analytics and even algorithms for artificial intelligence (AI) and machine learning (ML).
When people talk about personalization these days, many of them are just talking about using the customer’s name in marketing communications. But today’s consumers expect much more – they want a completely different degree of personal service. They like best those online purchasing interactions where their preferences, needs and characteristics are clearly reflected in what is presented before them and catered for at every stage of their buying journey. Only the most modern tools and technologies allow traders to sculpture such interactions.
Every eCommerce Manager or Digital Director has to decide the nature and degree of personalization to incorporate into the customer journey. The right scope of a comprehensive personalization strategy can depend on very many factors. Some of the most relevant factors are customer needs and expectations, the scope of information and data available, the approach taken by competitors, internal resources and processes, available budget, legal restrictions in the industry, and long-term business strategy. The goal is to deliver customised, personalised content to customers based on such things as their interests, previous page/product views and purchases, age group, gender etc..
Fortunately, you don’t have to implement all possible personalization features or make every change at once. A good idea is to gradually introduce various aspects of personalization and then measure the results. This is the best way to achieve quick success without years of developing complex and sophisticated solutions or deploying massive and expensive IT projects. But, it’s better still if you start off with an eCommerce platform that’s designed from the beginning to support this strategy.
As a general approach, if you want to achieve successful personalization, you should not limit yourself to providing only personal product recommendations or displaying relevant advertising banners and visuals. When browsing your website, customers lead a series of activities and actions that go beyond just viewing individual products. They:
visit different sections and product categories;
they search for ideas and inspiration;
they browse galleries with user-generated content (e.g. from photos shared by other customers);
they read Articles in the blog and product reviews and search for tips and advice;
they use various tools such as search engines, filter options, product configurators, room planners, etc.
That is why comprehensive and successful Personalization is about giving every visitor to your site an individual experience tailored to respond to their behaviour on their full journey to purchase.
For example, if someone prefers to go first for inspiration and advice before buying or to look at the latest trends to inform their needs, then, instead of individual products, you could provide that customer with exactly the inspiring content that they want to read. However, always remember not to over-personalize. An American Study showed that 22% of US consumers engaged in online shopping found experiences that were too personalized “scary”. Only personalize in an intuitive and reasonable way. The goal should be to offer customers real added value and improve the quality of their shopping experience, not to show you can read their minds. Under no circumstances should you give the impression that the customer is ‘stalked’. You want to have maximum control over the entire purchase process only to give better service.
A negative impression also arises if the content and offers that customers are presented with do not match their expectations. This includes false recommendations – for example, offering female products to a man because some time ago he visited the website to get a gift for his girlfriend. Unfortunately this problem occurs in e-commerce quite frequently. Even if you deploy the advanced technologies that enable personalization, you cannot leave everything to the computer to figure out. The safest solution is to give consumers some control over what is happening on a specific page visit, to direct the traffic a little. In this way, you can fully automate personalization on a platform chosen by the customers themselves. One method is to align the content with the various choices the customer makes and to customize the layout so that conversations are directed through different routes. This is called explicit personalization, which is compared to implicit personalization in the next section.
Personalization can only be effective if you can properly identify the preferences and needs of the customer. In general, this can be done in two ways – by tracking and analysing your customer’s online activities (implicit personalization) or by asking them directly what they are interested in (explicit personalization).
Implicit personalization is based on data that your website visitors did not intentionally provide or unconsciously provided. This type of personalization includes monitoring and tracking user activity and behaviour as they browse and navigate the online store. Detailed information and data on how each visitor interacts with the website is collected and analysed. This includes:
Browsing history (such as the pages the customer has visited, and the time spent on each and every page)
Features and tools that they used (such as filter criteria and various configurators)
Product options and variants that were selected (Styles, colours, sizes, fabrics, finishes, manufacturers, etc.)
Images and other media that they saw and with which they interacted or downloaded
Click behaviour
Previous purchases
Use of search
Geolocation
Device type
Even interactions with your customer service agents, both online and offline, can be included in the analysis. In sophisticated omni-channel platforms such as those provided by SAP, interactions in physical stores can be included in the analysis.
On the basis of the collected data and information, the system decides how to interact based on the preferences, interests and intentions of the customers at the moment and historically.
It selects the most relevant product and content recommendations that fit the customer’s data, and these it displays automatically and in real time.
In contrast, explicit personalization is based on data and information provided by the customers themselves. It’s provided voluntarily and intentionally. This presents opportunities for retailers to get accurate and, therefore, more valuable data about their website visitors. Approaches that can be used include various online forms, surveys and votes from which you can find out which manufacturer or which fashion style they prefer.
Basically there is always explicit personalization when a user consciously submits data in order to enhance their experience across a website.
By explicitly asking customers and encouraging information exchange you can get accurate data with the full permission of the data owners, including that data which you may have so far only guessed through behavioural analysis.
The data can include demographic data such as gender, age, date of birth, marital status, the number of people in the household, geographic location, and even monthly income. It might also include information about lifestyle, such as that related to sports, hobbies, food, leisure activities and vacation preferences.
With explicit personalization, customers can change their shopping preferences precisely e.g. in terms of styles and colours, patterns, sizes, fabrics or product categories, or even provide information about which factors have the greatest influence on their willingness to buy.
Explicit personalization also applies if the retailer gives customers options that allow them to select preferences that customize the website’s features, looks and feel when they visit.
Using the more modern eCommerce platforms, you can allow customers decide which content (components) should be displayed at certain points (content slots), or you can let them determine how these components are laid out on a particular page. In such a case, customers personalize the entire website and, in a sense, become its architects.
As a general demonstration of explicit personalization, the easiest examples are news and media platforms. For instance, if you ever registered to a news site, then you’ll know how it works. You can register as many topics as you are interested in. On this basis, the portal will give you appropriate recommendations for the latest articles.
Some early examples of explicit personalization in e-Commerce are found in large marketplaces that have hundreds of product categories. For example, one of the steps in the registration process is often to select the things that you are most interested in seeing and buying. Your experience thereafter is aligned with the selection you made.
It is claimed by some that the business impact of personalization cannot be accurately measured. This is a myth because the effects of personalization can adequately be measured using exactly the same indicators and methods that are used for measuring the performance of online shops and the effectiveness of online marketing campaigns.
The most important indicators for evaluating personalization strategies include:
Conversion rate
Click rate
Turnover
Retention / Renewal rate
Page views
Average length of stay on the page
Bounce rate
Average order value
Numerous studies indicate that for the majority the conversion rate is the most important benchmark for the marketer to judge the success of their personalization strategy, which isn’t surprising because the most critical measures for any company are undoubtedly all those that relate to performance of strategies employed. You shouldn’t underestimate the positive impact of personalization on customer engagement, sales and profits, and you can determine it by measuring conversion rate changes following implementation of each new personalization strategy.
Although the level of customer engagement is an abstract concept that seems difficult to measure, some popular existing indicators such as the number of pages visited, the average session time or the bounce rate prove helpful.
These are very general indicators that tend to measure the entire website or individual pages, whilst in reality, a single page may have deployed within it several personalized components, or contain different parts that need to be tracked. To learn how each component on a page has an impact on customer loyalty, it’s necessary to closely track how customers interact with each individual element and then analyse the data gathered.
Examples of interactions that might demonstrate customer engagement or provide vital data for sales include:
reading a blog post
Click on an image to view it
Enlarge an image
browse a FAQ page
download a file
watch a video
register for a newsletter
adding a product to a wish list
taking part in a survey
leaving a product review
or even place an order for certain goods.
In order to measure whether and how personalization has affected the level of customer participation, it is necessary to identify each type of interaction, assign a specific score and observe the changes after personalization is introduced.
This is the only way you can determine changes in engagement in a precise way and watch how it changes over time. You don’t just do this at the start. You do it.
To look at the effects of personalization, it is of course necessary to have reference data to compare performance before its introduction with performance after each additional action aimed at increasing the level of personalization on your site.
Another way to judge the effectiveness of your personalization strategy is to form a control group. This is a group of customers who use a version of your eCommerce site that has no personalized items on it. That way you can compare KPIs and check whether and to what extent personalization enhances engagement, sales and information for those using the version of the site that incorporates it. You can do this too when comparing different versions of the same personalization measure to determine which of them performs best for certain customers (e.g. a defined segment).
Data is the foundation of any personalization initiative. A lot of relevant and up-to-date data about the customer is the prerequisite to offer a truly personalized experience. The moment the customer arrives at your online store, you can begin to record a stream of information about almost every interaction with your site. These include location, browser name, version preferred, language, which pages they display, and so on. Unfortunately, you are not allowed to collect, store or process this data unless you meet the strict legal requirements regarding data protection.
The most important legislation for the protection of the privacy of the data of all citizens of the European Union is the General Data Protection Regulation (GDPR). The regulation gives EU citizens more control over their personal data by allowing website operators to store and use this data only with the citizen’s permission.
Significantly, GDPR applies to all companies, worldwide, that interact with EU citizens.
The essence of the GDPR is the Right of the user to freely give and withdraw consent for collection and use of specific data. On most eCommerce sites, this boils down to accepting or rejecting certain categories of cookies in connection with preferences, statistics or mareting. And citizens can do this repeatedly – at an time, if they want to give, expand or withdraw their consent, In addition, the need to be able, at any time, to request a complete statement of personal information that you have collected about them. And you, as a trader, need to be fully prepared to provide that.
Does this mean that GDPR makes personalization impossible or makes it difficult to realize because of barriers to free access to data or to create personal data stores? No! – Although many companies view data protection as an obstacle to personalization, it is just another requirement that has to be met.
The truth is that the GDPR does not prohibit companies from collecting, storing and processing personal data. It just requires traders to better protect personal data and, in addition, to make greater efforts to encourage customers to provide information in order to get benefits in return.
Most people are open to sharing their personal information and allow organisations to share their online activities in exchange for specific benefits. In a survey of more than 8,500 consumers from six different countries, Deloitte and SSI found that 79 percent of respondents were willing to share their data if there was a clear benefit.
For this reason, any e-commerce platform seeking to manage its GDPR compliance should have an appropriate system in place to manage consent management. A Consent Management System, such as that included in SAP Customer Data Cloud, when properly integrated into a company’s IT environment, also serves as a “single source of truth” for all customer applications and systems, providing them with up-to-date information on the status of individual users’ consents in relation to their data and privacy.
For those who want it, the latest tools to personalize their eCommerce sites are there right now. Investing in a highly sophisticated eCommerce platform (like those provided by SAP and deployed by Philos IT) guarantees that they have access to all the latest technologies.
Remember, the real skill in personalizing an eCommerce site is not in sneakily deploying smart tools to sniff out your customers profiles. It’s about giving each customer what they want, and you don’t need to do that in a covert way. Just tell them what you want to know and why i.e. primarily to serve them better. Spell out exactly how they will benefit. Ask for their permission if you want to track anything. That way you’re also complying with GDPR in a positive way.
Tracking and customisation of websites to meet individual customer preferences will continue to evolve. Who knows where it will go! The future of personalization could very well be websites whose architecture and layouts freely adapt to the expectations and preferences of the buyer. That’s one interesting direction certainly.
Why shouldn’t every customer be able to see your online store in the way they prefer, organised the way they like it, with features where they want them or not there at all?
We think they should!
