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4 future trends in ecommerce personalization

Author's avatar By Content Partner 06 Feb, 2018
Essential Essential topic

Ecommerce personalization will once again redefine how websites need to be designed in order to turn visitors into customers

Ecommerce personalization has been the hottest trend in customer engagement for a while now. Many consumers can hardly remember what it was like to visit a website that didn’t use at least some degree of this method to better engage with them.

But we’ve barely even scratched the surface of what ecommerce personalization can do.

In fact, you will soon see four ways it’s going to redefine websites – once again – in the very near future.

future of personalization

5 Websites That Have Proven the Benefits of Ecommerce Personalization

Before we bring up the ecommerce personalization trends that will redefine how successful websites are designed, let’s look at five examples of sites that became household names largely because of this powerful tactic.

1. Netflix

Netflix is responsible for roughly 37% of all streaming traffic in North America, and their grasp of ecommerce personalization is a big reason why.

The moment you watch your first movie or show on the website, Netflix’s algorithm takes note. The company has been so successful at this kind of tracking that they’re spending $8 billion this year to keep up with demand.

To ensure that this content receives the most attention possible, Netflix is leaving nothing to chance. They’re even using ecommerce personalization to affect the graphics for their shows.

For example, you could see one of nine different graphics for Stranger Things based on what Netflix knows about your preferences.

2. Spotify

If you like listening to music, you probably like listening to Spotify. Since its founding in 2008, the streaming service has also added podcasts and videos to the media they send users.

But it’s how Spotify compiles their Discover Weekly playlists that have made the company extremely popular.

Spotify looks at the music you’ve chosen in the past and recommends other artists and songs in their Weekly Playlist. However, the company then takes it a step further by gauging your reaction to their recommendations. If you so much as fast-forward through part of a song, they know that means it probably isn’t going to be one of your favorites. Their algorithm makes a note of this, and their future recommendations are modified.

3. Coke

Although not a form of ecommerce personalization, Coke’s “Share-a-Coke” campaign may be one of the best ever examples of how simple this method can be.

Improving soft drink sales is traditionally done one of two ways: change the recipe or come up with a better ad.

Coke improved sales for the first time in a decade simply by adding people’s names to their bottles. That was it. That was enough personalization to cause a huge boost to profits. It was so effective that Coke added last names to their popular idea.

4. BustedTees

This is another great example of how ecommerce personalization can move the needle without requiring a massive investment in changing your approach.

BustedTees sells funny t-shirts and has done so well enough that it’s currently among the top 100,000 most popular websites in the entire world (top 30,000 in the U.S.).

At one time, though, the company had a major problem. A large portion of their business came from sending out emails to former customers. These emails were all sent out at the same time, even though these customers were all over the world.

Someone in New York would get them in the morning, but someone in London received them in the afternoon.

In other words, they had become part of the 70% of companies that don’t personalize emails despite the fact that they improve transaction rates by 6x.

Fortunately, the company caught their mistake and changed when they sent out emails based on the optimal time of a given region. This simple investment in ecommerce personalization gave BustedTees:

  • 8% increase in email revenue
  • 17% increase in response rate
  • 11% increase in clickthrough rate
  • 6% increase in site engagement

And all with one very minor change.

5. Bombfell

Finally, let’s talk about Bombfell, which built its entire brand around personalization. This wardrobe subscription service sends men clothes based on answers they’ve provided through a survey. These cover normal factors like:

  • Size
  • Shape
  • Taste

However, Bombfell also cross-references these answers and successful past choices with customers who they know are similar based on the data. This allows the company to offer subscribers clothing options they would have never thought of but are likely to love without needing to continuously send them more questions or forms.

4 Things to Expect from Ecommerce Personalization in the Future

Now that we’re caught up on the present of ecommerce personalization, let’s look at four things the future has in store (no pun intended).

1. Automation to Support Omnichannel Engagement

Automation and personalization are largely inseparable. You can’t have the latter without the former.

In the future, automation will become even more important, though, thanks to the growth of omnichannel marketing.

When The Harvard Business Review looked at the behavior of 46,000 shoppers between June 2015 and August 2016, they found that:

  • Only 7% shopped solely online
  • Only 20% shopped solely in-store
  • 73% used multiple channels

Omnichannel marketing is the future, but the only companies that will be able to leverage it will be the ones that can properly utilize automation to offer personalization across all channels.

2. Tailored Deals and Personalized Pricing

Shoppers don’t just differ on what they want to buy. They also differ on what they’re willing to pay.

Traditionally, companies have had to study the array of prices they can charge and pick the ones that give them the most profit, even though it means turning away many potential customers.

That’s changing.

Personalization is showing companies what they can charge individual shoppers.

To some degree, this is already happening. For example, Orbitz used to charge Mac users more – sometimes by as much as 30% - because that demographic tended to have more money. Thus, it stood to reason that they were willing to pay more.

The future will allow companies to drill down into much more granular details, though. This will mean helping more people get the products and services they need at a more accurate price point based on their past decisions.

This approach will also create more attractive bundles and even how promotions are structured for individuals.

3. Inclusion of Offline Data for Ecommerce Personalization

Brick-and-mortar stores don’t have to miss out on the personalization revolution, either. They can use this powerful method to integrate their online and offline customer experiences.

The clothing line Sportsgirl has become a trailblazer in this sense by offering an app that utilizes augmented reality. Users can scan clothing items they like in Sportsgirl’s physical catalog or in their actual stores with their phones so they can then purchase them online later.

4. Machine Learning

Personalization can be about a lot more than selling a product or service. Thanks to machine learning, personalization will soon be about anticipating customers’ support needs before they even have them.

Similarly, machine learning will soon change the language websites use based on the visitor. In the scenario where a visitor needs help, machine learning will allow the site to find the best answers based on the information they’ve provided instead of the stock replies most are able to give now.

If the site knows that a returning shopper is working on restoring their late-model vehicle, machine-learning will be able to recommend the best possible products but also supply them with relevant content to help with the rebuild.

Embracing the Future of Ecommerce Personalization

Ecommerce personalization is already here, so if your company isn’t already utilizing it, that must become a priority.

However, as we just covered, the future of personalization is already well on its way. Those businesses that fail to embrace these advancements won’t be in business for very long. Fortunately, you now know about four methods you can adopt to ensure your company is able to meaningfully engage with customers for years and years to come.

Author's avatar

By Content Partner

This article is contributed by a Smart Insights Content Partner. To find out how you can become a regular contributor and share your knowledge and experience with our readers, please see our Content Partnership options.

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