The Ultimate Guide to Ecommerce Personalization: What Is It & How to Get Started?

In the current competitive business environment, small startups and large corporations are looking for the best strategy to grow their business and boost revenue, at the optimal cost. This is the only way to get ahead of the competition and remain there.

Ecommerce personalization is a tactic that helps business owners and marketers achieve this exact goal: growing at a scale without throwing tons of money into marketing and sales.

In this article, we will define personalization in ecommerce, explain the benefits, go over some successful examples, and show you how you can get started in no time with access to the right tools. At the end, we will address some last questions you might have in the FAQ section.

Table of Contents

• What Is Personalization in Ecommerce?
• Why Is Ecommerce Personalization Important?
• 4 Ecommerce Personalization Examples
• How to Get Started: Ecommerce Personalization Software
• FAQs about Personalization in Ecommerce

What Is Personalization in Ecommerce?

Ecommerce personalization is the analysis and use of customer data to provide customers with content that is dynamically customized to fit their preferences and expectations, with the ultimate goal to get them to make a purchase from your website.

This is usually done with the help of artificial intelligence (AI) which can collect, organize, analyze, and use big data based on behavioral patterns. Machine learning software makes use of past trends set up by customers similar to the one currently being targeted to project the most likely future behavior of this customer.

Ecommerce content is personalized based on different factors, the key ones including demographics (age, sex, educational level, and income group), location, language, motivation, interests, browsing habits, past purchases, and device. The more factors that you analyze and account for, the more accurate your personalization will be.

Many confuse the concepts of personalization and customization and use them interchangeably. However, they have different meanings in ecommerce.

The ecommerce personalization definition suggests that there exists an unlimited number of content options to offer something unique to each user to fit their exact profile based on demographics, intent search, and all other factors. This is achieved through AI algorithms.

Meanwhile, with customization, there is a certain number of ways in which you can allow a customer to adapt a product to meet their requirements. The process is not entirely automated and requires some human intervention.

Why Is Ecommerce Personalization Important?

The benefits of providing personalized ecommerce experiences are numerous and significant. Here are the most important advantages:

Better Customer Engagement

One of the most important advantages of ecommerce content personalization is that it helps improve customer experience and thus customer engagement. In this digital era driven by AI algorithms, customers not only appreciate but expect and even demand to be treated in a unique manner by brands.

When you offer content that matches the exact needs and interests of your users, they are likely to spend more time on your website, check out more pages, click more links, get to know your products better, and come back sooner. And we all know that higher customer engagement is a top priority for businesses for many different reasons.

Higher Conversion Rate -> More Conversions

Arguably the top benefit of ecommerce personalization programs is that they lead to better conversion rates and - ultimately - more conversions. A survey conducted by Accenture reveals that 91% of global consumers prefer to buy from brands that recognize, remember, and provide relevant offers and recommendations - in other words, brands that use personalization, even if the technical term is not used. McKinsey & Company measured the average increase in sales conversion rates due to personalized content to be 10-15% among retail businesses.

If you think about it, this is a pretty good boost for simply implementing an ecommerce personalization tool on your online store which can then take care of customizing content based on customer persona basically on its own. In this competitive retail environment, it’s important to take advantage of any easy opportunity to expand customer base and drive more sales.

Better Customer Loyalty and Customer Retention

When you use big data analytics to personalize your ecommerce marketing strategy and offers, you not only manage to attract more new customers but also succeed in retaining customers at a higher rate. Indeed, it’s even easier to customize content for existing customers as you already have your own data based on their previous behavior and purchases. Eventually, this translates into enhanced customer retention and improved customer loyalty.

Moreover, you can introduce personalization to your loyalty programs as business owners and marketers report better results and performance.

Increased Competitiveness -> Higher Share of Wallet

As you manage to boost customer loyalty, an average of 60% (according to InMoment) of your customers will come back to purchase from your e-store more often, and returning customers will spend an average of 33% (based on MyCustomer data) more per sale than new customers. Furthermore, according to a Mastercard rewards program survey, redeeming personalized offers leads to a 75% reduction in churn.

As a result, you will notice a boost in the competitiveness of your ecommerce business and improved performance against competitors. You will succeed in claiming a higher market share within your industry. Consequently, your enterprise’s share of wallet will go up, meaning that customers will be spending more and more money on your brand rather than on competitors.

More Revenue

All the ecommerce personalization trends and benefits listed above mean that you will make more money when introducing AI-driven customization in your on-site and off-site marketing and sales strategies.

But there’s one more way in which an ecommerce personalization platform can help you boost revenue - through upselling. Smart algorithms can offer recommendations at the optimal time of the customer journey to get them to upgrade from a product they were planning to purchase to another product that is better and more expensive. So, you’ll not only sell to more people and sell more frequently, but you’ll also send higher-end products at a higher value. All this means an increased income with relatively little effort.

Higher ROI

A reason why personalizing is becoming an increasingly popular strategy among online marketplaces is because technology advancements have largely automated and facilitated the process. To run a personalization program, you don’t need an entire data team to collect, clean, organize, analyze, and calculate data. All that you need is to subscribe to an ecommerce personalization software tool, which doesn’t cost more than a few dollars per month.

Consequently, you can benefit from a significant boost in revenue with little effort and at a low cost. The result is an enhanced return on investment, which is the ultimate goal of any business selling online (or offline, for that matter).

4 Ecommerce Personalization Examples

Although personalization in ecommerce might sound like a great idea to new online store owners due to the many benefits, it might be a vague concept that they don’t know how to implement in practice. So, let’s take a look at a few examples of how to personalize your marketing and sales strategies to boost performance and beat the competition. There are things that you can do both on your website and off it.

Recommendations

Personalized recommendations are one of the most widely used tactics to engage leads, keep their attention, and convert them. While there are different ways in which you can recommend products to your customers, a popular strategy is product-detail pages (PDPs). This refers to offering users products that are similar to the ones they’re already interested in (at a higher price - for a better product) or complementary to their choice. This can help you get them to switch to a more expensive product or buy a few products.

You can take personalized recommendations outside your website - on social media - too. Retargeting users who have abandoned their carts with a similar product or those who have bought with a complementary product on their social media accounts could do magic for bringing them back to your website and getting them to make a purchase.

Upselling

Using recommendations, you can implement an entire upselling strategy. This is another example of ecommerce personalization that can lead to more revenue in no time.

It’s simple to implement: Just offer higher-end products better than the ones that customers have already shown interest in and/or suggest other products that perfectly match the products that online shoppers are planning to buy. In the latter case, you can offer the two - or more - products in a personalized recommended bundle at a special price to get your customers to choose them. With this strategy, you can generate more revenue from every customer instead of having to chase after new customers all the time.

Personalized Pop Ups

There are many different ways in which you can use pop ups on your ecommerce business website, and one of these ways is to personalize offers and content. A common example of this ecommerce personalization technique is triggering pop ups with exclusive offers and deals triggered by exit-intent. In specific, if you know this is a new customer and they seem to be about to close the browser, you can offer them a certain discount on their first purchase.

However, generic pop ups do little good as most users find them annoying and simply close them. So, to boost the results of your pop ups, you can personalize them based on the products in the cart, the total value, the time the customer has spent on your website, their behavior until now, and other factors.

Email and SMS

Another very popular and effective example of personalization in ecommerce is sending out emails and SMSs to follow up and keep in touch with customers in order to improve loyalty and repeat business.

Some specific examples of this strategy include emailing or messaging upon cart abandonment and trying to get them to come back and finalize the purchase; following up after a purchase to check up on how satisfied customers are with the product; and sending personalized recommendations on new products that customers might be interested in based on their demographic data and previous shopping behavior.

How to Get Started: Ecommerce Personalization Software

Launching an ecommerce personalization program might sound like a daunting task to beginners in online trade. There are so many different strategies to choose from and so many things to consider like what content to send, how to personalize content, when to send it, how often to follow up, etc.

However, the good news is that you don’t have to be alone on this journey. Similarly, you don’t have to be overwhelmed by the amount of data that you have to collect and analyze or by the content that you have to personalize and send out.

The advancement of AI technology has allowed the evolution of ecommerce personalization tools that have the algorithms to take care of all aspects of personalizing the marketing and sales process of any business - of any size and in any industry.

One of the top personalization software platforms is Coretava. In specific, the Core Personalization and the Core Marketing tools allow online stores to use AI analytics to set up personalized recommendations, upselling, pop ups, emails, and SMSs to boost customer retention, conversation rates, and total sales. Setting up all this should take no more than a few hours and will cost you close to nothing, while the potential benefits are endless.

Click here to schedule a demo to reveal the power of Coretava.

FAQs about Personalization in Ecommerce

In case you still have any questions about ecommerce personalization, here are a few popular queries:

What Is Ecommerce Personalization?

Personalization in ecommerce refers to collecting, analyzing, and using customer data with the purpose of offering dynamic, personalized content to customers based on their needs and preferences. Targeting is done based on various criteria like demographics, location, interests, browsing history, past purchases, and others.

Online businesses usually use AI and machine learning algorithms to set up their personalization programs and campaigns due to the big amount of data and analytics that’s required.

What Are the Benefits of Ecommerce Personalization?

The advantages of personalizing the experiences of online shoppers are many. The most important ones include stronger customer engagement, higher conversions, improved customer loyalty and customer retention, more competitiveness, a boost in revenue, and better return. In other words, you can make more money in a very efficient way.

What Is the Difference between Personalization and Customization in Ecommerce?

Ecommerce personalization and customization are similar, yet different.

Ecommerce personalization is making the journey of each customer unique based on their specific needs and expectations. This is done with the help of AI analytics and automation tools.

Ecommerce customization, on the other hand, requires some intervention by the customer and resorts to a certain number of variations. In most cases, this refers to customizing an existing product to the specific preferences of a customer.

What Are Ecommerce Personalization Tools?

Ecommerce personalization tools are AI-driven software platforms that help you personalize your marketing and sales strategies based on customer persona, behavior, etc. Their machine learning algorithms analyze big data to predict future outcomes based on past patterns. This helps provide personalized content to each customer at every step of their journey in order to engage them, convert them, upsell them, and gain their loyalty.

What Is the Best Ecommerce Personalization Solution?

The best ecommerce personalization software tool is Coretava. With Core Personalization, you can set up recommendations and upselling and gain access to unique customer data analytics. With Core Marketing, you can launch personalized pop ups on your online marketplace and send out highly personalized emails and SMSs to bring customers back to your website.