E-Commerce personalization done right lies in removing obstacles to purchase, and improving the customer experience. To use a famous marketing mantra:
Whether it’s creating a personalized home page, a personalized product page, or personalized banners, the jury is in: personalization is here to stay. We’ve arranged our 15 favorite e-commerce personalization tactics into three areas of focus for increasing profits. If you’d like a general background first, take a look at our personalization FAQ. We’ve also included a macro-level personalization strategy, which will be discussed in the section following the personalization FAQ.
Table of Contents
Q: What is website personalization?
A: Website personalization refers to the creation of unique experiences for your customers, rather than a one-size-fits-all solution. A website can be personalized for segments of customers, or even for each individual customer.
Q: What is personalization in e-commerce?
A: E-commerce personalization is a form of website personalization, with an online retail focus. Personalization in e-commerce often involves personalized offers and recommendations
Q: What is a personalization engine?
A: A personalization engine is a tool that utilizes your customer data to create personalized experiences for every visitor to your site.
Q: What is the difference between personalization and customization?
A: Users customize the product or service they want. Companies personalize the product or service for the user.
Q: What is personalization software?
A: A personalization engine is an example of personalization software, which encapsulates any software used to create personalized user experiences.
Q: What is personalized content?
A: Personalized content is content selected for an individual based off their preferences (derived from their data).
The following section discusses an overall plan for personalizing your site. The sections following explain specific personalization examples and strategies. Some of these personalization ideas use fashion e-commerce as an example, but most are applicable to any area of e-commerce.
Macro-Level E-Commerce Personalization
Your overlays need to be relevant to the customer. They should also push the action you want this customer to take, which can be determined by their customer lifecycle stage.
If this is their first time visiting your site, then it doesn’t make sense to greet them with an overlay deal about pants. It doesn’t matter how cool those pants are – you don’t know this visitor. Maybe they hate pants!
You risk alienating your new visitor if you interrupt their customer journey with a random ad for something they don’t care about. Until you know more about them, focus on driving the action you want. Since this is a first time visitor, what we want is their email.
That’s only half the answer: we know what we want, but what does the customer want? What can you offer them in exchange for that email address?
- Offer them a voucher for a discount on their first purchase.
- Tell them about a unique selling point of your site that requires an email (e.g. flash sales you can only get through the newsletter).
- Ask them to enter a site-wide raffle that picks a winning email address.
Essentially: target each user with something relevant to them to provoke the action you want them to take. This method of site personalization through personalized overlay pop-ups is a simple way to make your messaging specific to the segment you’re speaking to.
If you’d like more campaign suggestions for each stage of the customer lifecycle, take a look at the article linked above. The next three sections showcase website personalization examples for different aspects of your strategy.
Increasing Customer Lifetime Value with Personalized Overlays
Pop-up ads are annoying. I know it, you know it, the customer knows it. Fortunately, new personalization options have made it possible to make these ads both less annoying, and incredibly effective.
Macro level personalizations based on the customer’s segment are an excellent place to start. But if you want your overlays to increase customer lifetime value more effectively, try personalizing your overlay pop-ups for each individual user.
In order to make this level of personalization possible, you’ll need to use a personalization engine powered by a single customer view: a collection of individual data profiles for every customer, detailing everything from personal info, to purchasing habits, to the last item they viewed. The single customer view that Exponea provides acts in real-time, with individual, granular data entries. This makes it possible to have overlays that change based on a customer’s browsing, even while they are still on the site. Now that’s a personalized shopping experience.
1. Overlay Personalized Offers on Exit
Once the customer has browsed your site long enough for data to be gathered, your overlays can offer a special deal on the item they viewed the longest. One of the most effective ways to do this is to have this overlay trigger on exit – as they begin to leave the site.
The banner could offer the custom discount, and could even carry a countdown clock showing how long they have to claim it. This is an item they’re interested in: create urgency to convince customers that the time to purchase is now.
2. Overlay Personalized Upsells
Personalized overlays can offer customers the items they didn’t realize they would need. Rather than just upselling with popular items, you can upsell with items relevant to their purchase.
Are they buying a tent? As they view their cart, an overlay could suggest a sleeping bag and a campfire coffee pot.
You can also use the single customer view to offer discounts on the additional products, based on the individual’s chance of paying full price (the discount is adjusted automatically based on each individual’s purchase history).
3. Overlay Personalized Recommendations
Infographic: Exponea web layer with product recommendations
You don’t need to rely on recommending best-sellers if you can personalize instead: if this user has purchased several dresses from you in the past, your overlay can recommend other similar dresses they might like.
Like with the upsell, this overlay could even recommend items that go well with the dress, or even items that go with the dresses they’ve already purchased (shoes, purses, etc.)
4. Overlay Personalized Abandoned Cart Items On Entrance
Of the users that make it all the way to adding items cart on your site, over 70% will abandon that cart.
However, you can improve that number if you’re collecting the right user data: once that user returns to your site, your overlay can remind them of the items they left behind.
Solving Challenges With E-Commerce Personalization
The following e-commerce personalization tactics focus on solving issues online retailers are facing.
5. Get Rid of Selection Paralyzation
Your large product selection may paralyze your customers, and in the end, they could leave without actually buying anything. This well-known effect in retail can easily pummel your conversion rate.
Is Selection Paralyzation Happening to You?
Uncovering selection paralyzation can be difficult, but if you have a large number of products, and are seeing a high number of detailed visits within a single session without any purchases, it may be an indication.
If you are observing this behavior during consecutive sessions, that’s a pretty strong sign that that your customers are indeed experiencing selection paralyzation.
How to Solve Selection Paralyzation with Personalization
There are several ways to address this problem with a personalized website. The correct solution depends on how deeply you want to personalize the content on your e-shop.
First Tactic: Hide products (or even categories) behind the “see more” button. If you are using Exponea, you can calculate the likelihood of a visitor purchasing a certain product, or from particular category. Knowing this, you can show your customer the products and categories with the highest match for them, while hiding the others under “see more.
Second Tactic: Create a personalized content page called “picked for you,” or something similar. This page would showcase a few products from each category based on the likelihood of purchase from the customer being targeted.
If you’re not using Exponea, both of these tactics can be applied using your best-sellers instead.
6. Make Sure Your Customers Are Onboarded
Onboarding customers is quite a challenge. The chance of turning first-time customers, who may be unaware of everything you even offer, into loyal customers is minuscule. Your best shot is to woo them with an amazing onboarding experience.
Are Your Customers Being Onboarded?
Unless you have a complex onboarding scenario already in place, the answer is likely a resounding “no.”
The first step to determining this is to define what “onboarded” means for your site: it can be as simple as the number of page views or purchases, or as complex as the frequency of interaction with certain features.
Once you have your onboarding definition, segment your customers based on what percentage are completely onboarded. Once you’re ready to increase that percentage, let’s get into the solution.
How to Use Personalization to Increase Your Number of Onboarded Customers
The solution is simple: combine onboarding newsletters with website content modification.
Essentially, create a sequence of onboarding messages to be gradually sent to your customers as newsletters. These newsletters should contain information on the features or product selection for which the customer still needs to be onboarded.
You can also do the same with your online store, modifying your content to showcase onboarding banners; ideally the ones you consider the most important in the sequence.
If you’re using Exponea, this can be done fairly easily through scenarios and weblayers (overlay pop-ups). Without a marketing automation tool like Exponea, you will likely not be able to segment your customer base to target relevant customers with onboarding messaging. You will need to instead lean on unsegmented communication, which increases the chance of marketing blindness.
7. Highlight Champions, Hide Mules
At least 30% of all sold products are eventually returned. This personalization tactic addresses this problem by identifying clear champions among your inventory, and pushing products more likely to be a mismatch to the back of the selection.
Are You Experiencing A High Number of Returns?
Run an analysis to find out the percentage of returned orders or products. Your goal is to keep that percentage is as low as possible. Anything higher than the industry average should be a high priority concern.
How to Reduce Your Return Rate with Personalization
The first step is to create return persona segments based on the behavior of your customers:
- The Wardrober: Wears the clothes once and returns them right after.
- The “Try it on” Customer: Orders multiple clothes just to try them on, returns most, if not all of them right after.
- The Fitting Roomer: Orders various sizes of the same item and returns the ones that don’t fit.
Next, segment out the orders of these customers, rank your current product offering based on the return percentage of each item, and enhance your product catalog with these percentages.
Make sure that your product catalog has product margins, or at least margin levels (high, medium, low).
Now you should be able to build a full category product page based on the product recommendation model, taking into consideration:
It’s a fairly complex tactic possible in Exponea. Without a similar tool, it may be difficult or outright impossible to pull off.
8. Only Give Discounts to Incentivize a Purchase
To put it another way, don’t give discounts to customers who were going to buy that item at full price anyway! Discounts are a fantastic tool to ensure a purchase, but it can be a costly decision to give them out to everyone.
Are You Making the Most of Your Discounts?
The surest way to see whether your discounting strategy is hurting your business is to do an A/B test. Offer a discount voucher (i.e. summer sale voucher) to one group and nothing to the other.
Then after 30-45 days, analyze the purchases of both groups. Take into consideration the margin, discount amount, shipping costs and costs of the items that were returned: since discounts impact the perceived value of ordered products, return habits may be impacted as well.
Are discounts hurting your bottom line? Let’s fix that.
How to Make the Most of Your Discounts with Personalization
If you have insights into the purchase history of your customers with two or more purchases, you should be able to find the average time between their purchases. This should help you identify the best time-frame in which to offer a discount: the rule of thumb is to offer the discount about a week or two sooner than the average time.
For customers without two or more purchases, you will have to use a global average with a slightly more generous time frame.
If you’re using Exponea, you can also use in-session predictions to calculate the probability to purchase within the customer’s session. This will help you to ensure that you don’t give the voucher out needlessly.
If you’re not using Exponea, an alternative solution is to offer the voucher using an on-exit overlay for those customers who viewed certain number within a single session, indicating an interest in purchasing, though they were about to exit the site.
9. Make Sure the Price is Right
Not everyone can buy a Gucci purse. If your online store offers a wide assortment of products with highly varying price ranges, you may run into a mismatch between what you’re promoting and your customers’ budget.
Are You Promoting the Wrong Items?
You can find out if you have a discrepancy between what your customers are viewing and what they end up buying in the end using a fairly simple analysis:
Find the average price of viewed products and the average price of purchased products. Next, segment your customers based on the price range difference between the items they buy, and the items they view.
At Exponea, we use the following segments:
If you find that a high percentage of customers view items that cost > 50% & > 100% of the items they actually purchase, you have an issue to deal with.
Note: To absolutely pinpoint the root of an issue, you can find the averages across the category you’re interested in.
How to Promote the Right Items with Personalization
Enhance your onsite product recommendation models with products that fit the usual price range of your customers. This enhancement should positively impact your recommendation model’s conversion rate.
Another interesting tactic could be to create a special newsletter containing discounted products within the customers’ price range. This tactic leverages the fact that discount can be a driving factor for purchase rather than the product’s starting price, at least for 35% of UK customers.
10. Don’t Be Afraid To Ask
When working with our clients, we sometimes find they lack the actionable data needed for effective for e-commerce personalization. With data privacy being a major concern, gathering this data from fresh visitors who haven’t become customers yet is challenging. At least that’s what many people think, though they are not entirely correct.
Are You Having Trouble Gathering Enough Data to Apply Personalization?
Create a segment of all of your visitors (not customers). What data and consents do you have from them? Is there enough data to provide them with a relevant, personalized experience? If your answer is no, let’s deal with it!
How to Gather Enough Data for Personalization
The solution to personalizing your customers’ experience is deceptively simple – simply ask your online store’s visitors about their preferences.
Promise them a top-notch personalized experience; that you can help them find clothes that flatter their figure, in their favorite colors and styles.
You can achieve this through a simple visual questionnaire. You can even gamify the experience by, for example, showing the percentage of people who picked the exact answers the user taking the questionnaire did.
Improving Customer Experience With E-Commerce Personalization
The previous personalization examples revolved around solving issues you may have. These last four personalization tactics focus on increasing your conversion rate through improving the quality of your customers’ experience with your site.
11. Bring Context To Every Visit
The idea behind this personalization tip is to utilize the data from previous sessions to help your customers pick up where they left off.
How to Bring Context to Your Customers
Highlight the number of new products added to your site since a customer’s last visit and enable them to only view items that are new for them, or that they haven’t seen yet.
You can do this in Exponea by using the information within the single customer view to modify the content of your online store / count the number of new products in your catalog since the last visit, for each customer.
12. Show Customers Their Size is in Stock
For many customers, size is the main reason for returning a garment. Make sure to let your customers know when you have their size in stock.
How to Let Customers Know You Have Their Size
Find the sizes of your current customers through their previous purchases or most frequent filtration options. You can use those insights to highlight or prioritize the products on category pages that are available in their size.
On product pages, you can pre-select their size, or warn your customers when you think they might have picked the wrong size.
You can achieve this in Exponea through content modifying. If you’re not using Exponea you’ll most likely have to custom modify your online store’s front-end.
13. Make Sure Everything Fits & Flatters
Not every garment fits every person in the same way. As obvious as this may sound, this fact is often overlooked when selling apparel online. Visualizing the fit is one of the top trends for fashion e-commerce in 2020.
How to Make Sure Your Customers Pick Items That Fit & Flatter
Aspiring for the perfect fit and recommending a flattering look may sound ambitious, but enhancing your product catalog with product styles and matching them to body shapes is now possible.
Though most of this personalization tip involves enhancing your database, Exponea can help you by building and launching another simple questionnaire to help you determine your customers’ dimensions.
14. Position Your Newsletters at More Effectively
Emailing is still one of the most effective marketing channels for e-commerce businesses, but there’s something holding it back: other newsletters pile up in your customers’ inboxes, pushing your newsletters down. Let’s solve this issue.
How to to Position Your Newsletters
The solution is pretty simple in theory: just send newsletters to your customers at the ideal time for them to see it at the top of their inbox and react to it.
Exponea’s algorithm finds this ideal time, utilizing customer data such as:
- The most frequent times of visits to your site
- The time when your customers tend to open their emails
- The time they click on links within newsletters
- Which devices they use to access your site
- The times when your customers actually make their purchases
If you’d like to create such an algorithm yourself, it will be a lengthy process. Having said that, almost anything is better than sending all of your newsletters to your customers at the same time, without taking their behavior into consideration.
Personalization is no longer something an e-commerce company wants; it’s something an e-commerce company needs. Something many customers now expect. There are a number of tactics you can start doing without working with a marketing automation company like Exponea. If you’ve already explored those and are interested in trying some of the more advanced techniques, feel free to reach out to us for a commitment free demo to learn how Exponea can help personalize your site for every user.