After years of more talk than action, merchants are now making good on prioritizing personalization — and those who have done so report robust results. But with a sizable number of merchants still struggling to justify personalization investments, it’s essential to highlight how the right technology can impact the shopping experience well beyond personalized product picks.
Consumer expectations for personalized shopping experiences are higher than ever. Overall, more than half say it’s important for merchants to recognize them across touchpoints and tailor content and offers accordingly; and when it comes to in-store service, fully 74% of shoppers expect sales associates to have access to their online profiles, according to Kibo’s Consumer Trends Report.
These stated preferences are underscored by results from merchants who’ve implemented personalization. Shoppers are rewarding increased relevance with engagement: a whopping 82% of sellers report seeing an increase in traffic of at least 25% due to personalization efforts, according to a study from consultant McKiney’s Periscope service. And when it comes to sales, 51.3% of merchants report seeing conversion rates at least 50% higher for personalized offerings versus mass promotions, and two-thirds report realizing average order values (AOV) at least 50% higher when personalization is in play, McKinsey found.
Given these strong results, it’s not surprising that two-thirds of merchants in the McKinsey study said personalization was a top priority for their organizations; on-the-ground interactions with merchants at both IRCE and our own Kibo Summit bear out the research, suggesting that personalization is at the forefront of sellers’ to-do lists.
But even with momentum gathering toward personalization, merchants still face obstacles. More than one in five still report struggling to receive buy-in from top management, McKinsey found, while 25% report difficulties in justifying new personalization investments. And even with budget approvals in hand, 41% report that the search for the right technology is slowing their personalization journey.
To both surmount the funding hurdles and put potential vendors through their paces, merchants should build out use cases and projections that integrate personalization into every stage of the customer lifecycle. As we’ve discussed previously, personalization goes well beyond product recommendations and far beyond targeting based on customer segmentation. Among the ways personalization can drive ROI in unconventional ways:
Personalized on-site search to fuel more efficient discovery. Thanks to real-time individualization technologies, merchant sites can adapt to reflect shoppers’ priorities over the course of a single session. That includes boosting on-site search intelligence to prioritize relevant products based on clues gleaned from shoppers’ browsing patterns. For example, a shopper who browses kids’ twin bunk beds on a home goods and furnishings store and then searches for sheets might see twin sheets with popular patterns for kids displayed topmost within the results set.
Given that close to one in three site visitors use on-site search and they’re twice as likely to convert if their searches are successful, merchants should place a premium on making the tool as relevant as possible with a minimum of extra keyword inputs or clicks.
Tools to help shoppers pick up where they left off in the consideration phase. Fully three quarters of those who’ve abandoned carts say they actually intend to return to the same site to complete purchases, according to Business Insider, making cart abandonment potentially a mere detour on the path to purchase. Merchants would do well not only to cater to cart abandoners with triggered email alerts, but to make re-entry into the site as easy as possible. Prominently positioning recently-viewed products and items left behind in shopping carts on the home page and landing pages lets shoppers resume their consideration swiftly and smoothly. Currently, just 40% of Top 100 merchants personalize product arrays on the home page for returning visitors — making such service a potential brand differentiator as well as a boon to shoppers.
Relevant how-to content to stimulate re-engagement post-purchase. Consumers who’ve just taken delivery of items are receptive to further suggestions from merchants: one in five say they want to better understand the full value of their items, and 14% seek information on related products or services, Forrester Research, Inc., found. The key is for merchants to fully comprehend the context of the purchase and to pinpoint the most relevant follow-up content and offers.
For example, a simple product recommendation engine might serve a laptop buyer recommendations for accessories such as cases and cords, but savvy personalization technology might factor in the timing of the purchase in early August plus prior purchasing patterns and display a bevvy of back-to-school deals when the shopper next visits the site, in addition to a how-to video specific to the buyer’s make and model, a link to further specs and documentation, and a spotlight on technology classes and events for students at the nearest physical store outlet.
How are you using personalization throughout the customer lifecycle beyond cross-sells and upsells to deliver better shopping experiences?