Personalization is one of the biggest buzzwords in ecommerce and digital marketing in 2022. But the question is - is personalization just a buzzword? Or is it something you actually need?
We've gathered pretty extensive evidence to show that personalization is something consumers are asking for, responding positively to, and driving actual business results for companies.
Personalization has also been significantly leveraged - and documented - by behemoths like Amazon (through product recommendations), and Netflix (through TV show recommendations - which also drives their production priorities).
At LimeSpot, we're personalization experts, helping thousands of ecommerce businesses create tailored shopping experiences on a 1:1 or segmented basis from acquisition through to conversion and retention. So naturally, you'd assume that we're all in when it comes to personalization, right?
We do believe there is room to offer some level of personalization in customer interactions for almost every business type. But what we don't believe is that there is a one size fits all approach to personalization that makes sense for every business.
So how do you know if you need ecommerce personalization at all? And if so, what types make sense for your store? Keep reading to find out.
How to assess if you need personalization for your ecommerce store
The easiest way to tell whether your store is ripe for personalization is to simply take a look at your product catalog as it stands right now. The way you organize your products says a lot about how you perceive your customers to browse and buy.
If you can divide your customers based on their collection preferences, then your site is fit for personalization.
Let's break down what that means by asking the following questions.
Does your site cater to both men and women (or adults and children)?
This is one of the most basic forms of personalization a site can offer. Someone shopping in the adult women's collection may have zero interest in children's wear. If you can divide your site by gender or age, all personalization should be tailored to the collection a shopper has inferred interest in.
Important note: Inferred interest is key here. Quite often a shopper on a jewelry site, for example, might be of the opposite gender (i.e. a man will often shop for a woman, and vice versa). We aren't suggesting you tailor your entire site on the assumption someone is a man or woman, just that they have an interest in one collection or the other.
Do you have at least 50 products (not variants) in your catalog?
We've found that having at least 50 products works best when using AI-generated personalization. But there's a method to this threshold as well. 50 products is generally a good number to determine whether there's actually room to distinguish buying preferences.
Take for example a business that sells water bottles. They might offer them in a few different sizes, and dozens of different prints. But based on the low frequency a shopper will return to that store to buy water bottles, and the nominal differences between prints and sizes, personalization isn't going to have a huge impact on the buying experience for a shopper here. We would argue there's room to boost average order value with some promotional-based personalization, but we'll come back to that in a bit.
In contrast, a fast fashion site with thousands of SKUs is likely to have a wide range of shoppers, as well as preferences. Everything from price point to basics vs. colors vs. prints to hem lengths or silhouette will dictate what products a customer is interested in. More products equals more segments, and more of a necessity to facilitate a smoother shopping experience based on what a customer shows interest in.
What is the return purchase rate with your store?
We touched on this in the last question, but a higher return (or repeat) purchase rate generally signals an opportunity for more personalization. A shopper looking for a mattress, a fridge, or even a small ticket item like a water bottle, is unlikely to visit your site on repeat. Thus, personalizing the experience and remembering what they bought last time isn't as relevant.
The trick for these low-frequency brands is to ensure they personalize the shopping experience as much as possible for customers at earlier stages in the funnel, before checkout.
Using the example above of a mattress brand, personalization should come down to the product a customer is showing interest in during their session. Looking at a king-sized mattress? Cross-sell king-sized pillows, duvets, and sheets.
Flipping back to our water bottle store, the aim should be to show customers how their interest in a smaller sub-section of the catalog has options within it. A shopper looking at a mini-sized water bottle should be shown other prints the bottle is available in, or a carabiner or carrying case that fits the bottle they're keen on. Alternatively, the print the bottle is shown in should be shown on other products, in case they love the design, but need something smaller, or bigger.
Of course, stores with a high frequency of returning shoppers should simply take that data and use it to tailor every shopping experience. Don't show your customer that's always buying rainbow-printed dresses your new collection of basic black and white office staples; highlight the latest and greatest bright items instead.
How would you treat a customer differently after they've signalled a preference?
This question is one of the most overlooked when it comes to personalization, but it's also one of the most important. The point of personalization is one, or all of the following:
- Remove friction by showing customers the products they're most likely to be interested in
Shorten the time to value and help shoppers feel like they're in the right place
- Creating an organic, self-guided journey based on each shopper's tastes and preferences
- Present offers or items that will enhance a customer's experience with a brand (not feel like a cash grab)
- Improve the discovery process to understand your full range of relevant products per customer
- Ensure customers feel 'understood' or recognized by the brand
If your store experience wouldn't change much based on any of the above, then you might not fully benefit from what personalization can do.
A simple example of this is a pet store. Understanding whether someone is a cat or dog lover would obviously help with multiple items on this list. If we knew a customer was a cat lover, we could change the home page hero image, promote a special offer on cat food, and highlight new arrivals from the cat section of the site. Any cat owner that comes back to the site and sees these adjustments are going to feel like they're in the right place, have an easy entry into discovering new products (even if they just came by to reorder a favorite), and keep them from rolling their eyes or ignoring large blocks of ecommerce real estate dedicated to all things dogs.
Going back to our mattress store, the ability to customize things is certainly more limited. If you know a customer is interested in a double bed but hasn't pulled the trigger on a purchase yet, you could do things like tailor the home page imagery to a room styled with a double bed, or a present a piece of content that spotlights double bed mattress reviews. And as we mentioned earlier, you could promote cross-sells for items that complement a double bed. But the through-line just isn't as strong here; the customer is less likely to notice the effort beyond the product detail page (or in-cart promotions).
Does the way a customer finds your site or learn about your business tell you anything about them?
This is an easy and unsung way to approach personalization. Quite often, personalization focuses on how you shape a customer experience once they start browsing or better yet, buy a product from your site. But paying attention to a shopper's referral source can be an easy way to instantly start delivering a more personalized experience from the moment they land on your site.
This strategy works particularly well if you're running campaigns through advertising or influencer marketing to direct certain groups of customers to your website. For example, if an outdoor equipment store was working with a kayaking content creator, they're likely aiming to attract more kayakers to their site. Those kayakers may not be interested in the other product categories the store offers (like camping or hiking gear). Tailoring the site experience to focus on kayaking equipment, promotions, and content should help that group feel right at home from the minute they land on the site.
Would personalizing your site provide you with any kind of competitive advantage?
We're certain that most people reading this question who understand the value of personalization are going to say, "Yes, of course." And we don't disagree - personalization generally leads to better business results.
But if how you approach personalization is identical to everyone else, or what you offer has narrow margins of differentiation, chances are adding a personal touch to your ecommerce site isn't really going to set your brand apart that much. Case in point, our mattress brand we mentioned earlier - any brand can offer the same type of 'by product' personalization, meaning there's nominal competitive advantages to be had, other than meeting table stakes.
At the same time, it's important to recognize that if your competitors aren't being super personalized, it doesn't mean there isn't an opportunity to up the personalization factor. We see this quite often in the B2B space in particular. Brands with huge product catalogs of equipment, materials, or even promotional products will essentially leave the shopping experience up to their customers, assuming they know exactly what they're looking for. In reality, B2B is a huge opportunity to add in the same type of ecommerce personalization with 1:1 product recommendations to help guide the customer along. Just remember: Inaction on the part of your competitors does not equal no opportunity.
How do you personalize your ecommerce site?
If you've answered our questions above, you should have a pretty good idea as to whether personalization will benefit your customers, and your business.
The next step is to actually implement personalization at scale. As mentioned, LimeSpot's personalization suite contains four unique modules that can help create a more tailored experience for every shopper. You can even try us out for free.
But here are a few general ideas for how to personalize the shopping experience:
- Present 1:1 product recommendations based on the product (or collection) a customer is interested in or has bought in the past
- Adjust your retail experience by the geo-location of a shopper
- Tailor the site content (images, copy, offers) by customer segment
- Recruit new customers or winback past visitors through enhanced ads
- Include personalized product recommendations or content in marketing or transactional emails
- Greet customers by name and recognize their loyalty program status or where they're at in their buyer journey
Want even more inspiration? Check out the LimeSpot Idea Guide for over 45+ ideas to add personalization to every stage of the customer journey.