We have become accustomed to companies and organizations collecting data about our lives. We even voluntarily share our online activities, habits and interests if we receive benefits in return, such as connectivity, convenience or usability. To realize many of these benefits companies are increasingly turning to the personalization of online content.
We started talking about online personalization when marketing emails started addressing us by our names. We have passed another significant milestone in 2007 with the rise of Twitter, Facebook, cloud computing and smartphones. As we use these tools, companies can collect enough information about us to deliver fully personalized user experiences across multiple channels. At the same time, users are also becoming more and more spoiled. We are quick to leave websites that do not take our interests into account to display relevant content. We find ourselves torn between two extremes. On the one hand, we are not completely at ease with data collection; however, the demand for personalized content is much stronger.
Effects of personalization
The level of personalization varies across websites, so we have different estimates of its effect. In e-commerce, the various estimates of sales growth resulting from personalization range between 15 and 60 percent. However, while companies are well aware of the importance of personalization, they rarely believe their investments in this area are delivering satisfactory results. That is why we included personalization on the list of the trends shaping e-commerce in 2020.
There are several ways online stores can customize the user experience. They can highlight the clothes in your size, in your favorite colors, and in a price range that matches the patterns of your previous purchases. They can offer products at a time when you are most likely to need them. They can use graphics and images tailored to your interests that will be the most convincing on your journey towards a purchase. A personalized page won't force underwear on you when you are first buying dog food. The better choice for the first purchase is to reflect the interests of the average site visitor. Personalized online stores will first want to get to know you through a series of questions that will serve as the basis as they build your profile. Regular customers, on the other hand, will mostly be offered the products that are relevant to them. Stores will not induce decision paralysis with excessive choice; instead, they will lead you towards the purchase with a narrowed selection of relevant products.
A special page will show you products that might interest you or products that have been added since your last visit. A personalized page dynamically prepares product combinations that you will use. By analyzing your current behavior, it will detect that you can’t make a decision and will nudge you towards a choice before you change your mind. When it comes to personalization, you shouldn’t neglect personalized marketing through other websites, e-mail and other channels. You have an almost unlimited number of exciting options.
However, a user-friendly experience is not always the most favorable consumer option. The ultimate goal of the seller is to increase sales. This means the algorithm may conclude that a certain buyer will buy a product at the full price in any case and will save a discount only for those users who are less likely to buy. Also, personalization can manipulate users by displaying artificial shortages of products of which there are plenty in inventory.
The role of new technologies
Recommendation modules are the most common component of personalization in e-commerce. Traditional tools require the editor to link each product to several other products for each category separately: recommended and related products, more expensive products, accessories, and so on. This manual approach to linking requires a huge amount of editorial work. The current trend is to rely on automated customization using artificial intelligence, machine learning and big data science. In this scenario, an editor only sets up some rules that define the shopping experience.
Put simply, from the technology standpoint, personalization is most commonly a process consisting of three steps.
Step 1: Capturing data, which can be done in different ways: with surveys, integrations with other providers, purchase history, analytical data (demographic data, behavioral patterns, etc.), user settings, and similar.
Step 2: Segmentation. Automated personalization is trending towards micro-segmentation as larger segments combine users that are simply too dissimilar.
Step 3: Selecting actions for individual segments. In the future, we will probably be able to entrust these processes to artificial intelligence that will apply optimized personalization steps to improve sales.
Just like supporting new technologies, personalization is still evolving so higher-priced e-commerce tools are far more advanced than the open-source solutions that are often preferred by Slovenian online retailers. Personalization is also gaining ground as an outsourced service that can be integrated into existing e-commerce tools.
Also, do not forget that you need a suitable platform to process the data you collect about your online shoppers. One of these platforms is HubSpot that integrates the tools you need to manage sales and aftersales activities and analyze your data. By integrating your online store with HubSpot, you can feed all your customer and attribute data into HubSpot to centralize it in a single location, which makes it much easier to personalize and automate your marketing efforts.
The trend of the century
Personalization is becoming technically feasible and some have begun calling it the trend of the century. It is a relatively new, unexplored and exciting area that also has its share of pitfalls. In addition to invading privacy, it can deprive users of the information they disapprove of to create so-called filter bubbles. But we will have to overcome these and other pitfalls with experience. The fact remains that personalization is here to stay and is becoming a key factor in the competitiveness of companies. Inevitably, we will see significantly more personalization efforts in the future.
We might be moving into a future in which the bar that delivers drinks to you without an order will be the most competitive option as they know your favorite drink. If you sign up for our blog, we can show you a personalized topic tailored to your interests and focus the next time. Just read a few more posts so we can learn about the usual time and location where you read the blog. We might even deliver your favorite drink to go along with a fresh post.
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