eCommerce Personalization: 2023 Guide

60% of consumers say they will likely become repeat buyers after a personalized shopping experience with a retailer. (source link).

The value of getting personalization right or wrong is also rising. Right now, companies that get personalization right have the potential to generate 40% more revenue (source link).

There are a ton of stats like the two above, and they all suggest the same thing personalization matters! With the increasing competition, the sheer number of available shopping channels, and omnichannel buying experiences on the rise, online retailers and other eCommerce businesses need to differentiate themselves from their competitors to attract and retain customers.

Personalization shines here. It helps create a unique experience for each customer, leading to increased customer engagement and loyalty. It is one of the best-proven Conversion Rate Optimization (CRO) tactics in 2023.

With that in mind, we wanted to put a couple of strategies and tools in your perspective that can substantially increase customer engagement and loyalty through personalization.

Simply put, by tailoring your eCommerce store to each customer, you can increase engagement and loyalty, leading to increased sales and revenue. Personalization helps reduce friction in the buyer's journey of your customers by creating a better customer experience, which is crucial in the highly competitive world of eCommerce, i.e., it is the difference between customers choosing your brand or shopping elsewhere.

Implementing eCommerce Personalization is no longer just a nice-to-have feature for online retailers, but it's becoming a must-have if you want to compete in today's market. So how do you start?

There is a fivefive steps framework you can take, and it all starts with data.

Collect and use customer data. To personalize your eCommerce store, you must collect customer data, such as browsing history, purchase history, and demographic/location data. For example, you can use this data to personalize product recommendations, offers, and discounts.

Implement personalization tools. Many personalization tools, such as personalized search, product recommendations, and email marketing, are available in the market. You can use these tools to create a personalized experience for your customers.

Use AI and machine learning. AI-driven insights and machine learning can be used to analyze customer data and personalize the shopping experience further. For example, you can use AI-powered chatbots to provide personalized customer service.

Personalize the checkout process. The checkout process is a critical point in the customer journey. Personalizing this process can lead to increased conversions and customer satisfaction. You can personalize the checkout process by offering personalized shipping options and payment methods. Or offer personalized upsell pitches at checkout.

Create personalized content. Creating personalized content, such as product descriptions and blog posts, can help create a unique customer experience.

Let's break these five steps a bit more.

The key to successful personalization is to focus on the customer and understand their needs, preferences, and behaviors. Which means you start with collecting data first.

You can rely on customer relationship management (CRM) / master data management (MDM) tools and website analytics or let your customers dive into personalization by volunteering personal data. This data can be used to personalize product recommendations, offers, and discounts.

For example, first-time site visitors will have different buyer journeys than returning customers. Or, if a customer frequently buys organic products, you can offer them personalized recommendations for other organic products they might be interested in.

Another effective way to implement eCommerce Personalization is to use AI and machine learning. These technologies can analyze customer data and personalize the shopping experience further. For example, you can use AI-powered chatbots to provide personalized customer service, answer customer questions, and offer product recommendations. AI can also analyze customer behavior and predict what products they might be interested in, making it easier to provide personalized recommendations shared during the purchase cycle within a content block or via personalized newsletters, for example.

Additionally, AI-driven product recommendations can help even more in creating a better customer experience.

Personalizing the checkout process is also essential to increase customer satisfaction and loyalty. You can personalize the checkout process by offering personalized shipping options and payment methods. For example, if a customer has previously used a particular payment method, you can offer that option first during checkout. You can reduce cart abandonment and increase conversions by personalizing the checkout process.

Lastly, creating personalized content can help create a unique customer experience. By tailoring your product descriptions and product-related blog posts to each customer's interests, you can make them feel more connected to your brand. This can increase customer engagement and loyalty, leading to increased sales and revenue.

OK, but how do you know and do what you suggested above? Audience segmentation.

Audience segmentation is a process of dividing people into homogeneous subgroups based on defined criteria such as product usage, demographics, psychographics, communication behaviors, and media use. - Wikipedia definition.

This basically means you can and should segment your audience by certain criteria and provide a unique shopping experience for each user based on that criteria.

For example, identify users by location and offer personalized location-based search results and product listings. Identify customers according to their device (web vs. mobile) and, offer different category layouts, + rely on price steering for mobile phone users. Tailor content, visuals, and product recommendations to the user's age or gender group. Identify visitors via the traffic channels they came from (organic search, PPC, email, referral URL, etc.) and offer products depending on past purchasing trends from those channels.

By using gathered customer data, you can provide a more personalized experience that makes customers feel valued and understood.

There is no doubt personalization is becoming increasingly important in the world of eCommerce. By tailoring your eCommerce store to each customer, you can increase engagement and loyalty, leading to increased sales and revenue.

By focusing on the customer, collecting and using customer data, implementing personalization tools, using AI and machine learning, personalizing the checkout process, and creating personalized content, you can provide a unique experience for each customer that can lead to increased engagement, loyalty, and revenue.