by Andy Piscina
Ecommerce is now almost unrecognisable from even a few short years ago when the priority for retailers was on usability, content and structure, and creating a scalable, high performance online presence. Forward thinkers, such as Amazon, have more recently demonstrated the powerful commercial advantages of personalised online shopping and changed the rules when it comes to customer engagement.
The online marketplace is very crowded so the key to getting noticed is in differentiating your brand. By using personalisation, e-retailers can measure and reward the online behaviour of consumers which drives loyalty and builds trust, and underlines the unique elements of a brand. In addition research shows that eCommerce personalisation and recommendation tools positively drive key metrics like revenue, conversion rates, average transaction value and time-on-site.
Does personalisation matter?
The Internet has effectively placed control in the hands of the consumer who wants a hassle-free, quick and informative shopping experience that meets his or her exact requirements. With one eye on the transient nature of consumer loyalty online, this has prompted many shrewd e-retailers to up their game when it comes to customer engagement.
So what do online shoppers want? They want recognition, recommendations, and value guidance, based on their individual interests and preferences. They are looking for a transparent, optimal experience that enables them to find what they’re looking for and, in the process, helps them discover products and solutions they may not necessarily have considered.
Personalisation doesn’t just matter to consumers, it is also important for retailers too. Increasing conversion rates and order sizes depends on presenting the most relevant products and deals at the right time to the right people, while removing the temptation for shoppers to ‘comparison shop’. Displaying products with a high margin on top of a user triggered search helps organisations increase their average order value and additionally leads to higher revenue. What’s more, engaging in dynamic merchandising – powered by customer purchase behaviours and actions – helps reduce operating expenses.
The changing face of personalisation
The earliest forms of personalisation used IP recognition to direct visitors to geographically-specific websites containing product groups, colour options, and pricing or offers pertinent to a country or region. One to-one interactions included greeting returning customers by their name, or simply enabling them to save preferences.
The development of behavioural targeting tools and personalisation engines has come a long way since then. Today e-retailers can organise their site and navigation around a customer’s needs, individualise layout and site content for each and every customer, generate targeted promotions, and automate personalised product recommendations.
It is interesting, therefore that in a recent survey by ChoiceStream 59% of consumers indicated they receive poor product recommendations, which illustrates that many retailers are still not tapping into the ability of the web to track what consumers do on their site – what they searched for, what pages they navigated to, which items they investigated, which items they put into their shopping cart or purchased – to identify critical ‘indicators of interest’.
Yet today’s personalisation technologies enable online retailers to extract commonalities, associations and cause-and-effect relationships seamlessly and deliver more relevant up-sell and cross-sell recommendations, or push products and merchandise based on business rules, promotional drives and other criteria.
Personalisation done right
The ‘customers who bought this book also bought these books’ form of product recommendation has become accepted, and was entirely pioneered by Amazon.com, but new dynamic personalisation solutions like hybris Commerce take this to a new level - rendering personalised recommendations by automatically detecting and comparing customer behaviour patterns.
Customers can be analysed by their context – using Google referrals, search trails or engagement patterns – and compared to users with a similar customer profiles to create highly valid and reliable product recommendations. These context-based recommendations can then be combined with a user’s known profile information and purchase history to give the ultimate shopping experience.
In the same way that ‘cross selling’ is employed on the High Street, e-retailers can also create rules-based ‘cross selling’ recommendations that feature a set of defined products. For example, the ‘get the complete look’ personalisation employed by Long Tall Sally ensures that multiple components are shown to customers selecting one item from the range to prompt add-on purchases.
What’s more, retailers can use individual targeting rules to limit the algorithm and determine which products are shown to a customer – for example, only high priced products or preferred brands are displayed. While at checkout, customers failing to qualify for free shipment can be provided with recommendations within the spend differential that will take them over the threshold, saving them shipment costs while generating incremental revenue.
Rule-based behavioural targeting
Algorithmic personalisation takes time to collect the necessary data, but merchants with fast moving inventory or extensive product categories can take advantage of behavioural targeting to determine which products, content or promotions are shown to relevant customers.
Using data from the customer – age, country, number of performed orders - and session profile – search terms, products/content viewed, shopping cart, written reviews - hybris Commerce compares this with the targeting rules to present specific promotions or determine the visitor landing page. For example, if the visitor’s history indicates a preference for electronic items the ‘first stop’ will be in this section of the website, together with any relevant product related offers – boosting the visitor’s sense of recognition.
Alongside personalised starting and landing pages and content, displayed according to the customer segment, query recommendations can be provided in real time and vendors can repay loyal customers by providing premium special offers to regular buyers.
Mobile commerce personalisation
Personalising content to mobile devices is more of a challenge – the restricting size, resolution and ‘surfability’ of the user interface don’t help - But e-retailers should not be put off, because by tracking shoppers’ habits and browsing behaviour, they can still anticipate needs and prompt purchases.
For example, offering a real-time coupon or discount when customers are in-store can motivate a purchase. Merchants can also email newsletters with integrated URLs and barcodes that include personalised offers and targeted promotions – like free gifts or bundles – that reflect a customer’s individual preferences.
Using a customer’s search history, merchants can display personalised starting pages and offer landing pages to make it easy for them to find what they are looking for. They can also employ the information already known about a customer to deliver highly personalised product recommendations and ideas for complementary items.
Best-in-class retailers are already discovering the real benefits delivered by online personalisation. Customers utilising hybris dynamic personalisation, for example, have seen revenue increases of between 5% and 15% and a 50% improvement in conversion rates, alongside an augmented average customer order value.
Until now, personalising the individual experience online has been complex and difficult to execute well. But today’s personalisation technologies enable online retailers to extract commonalities, associations and cause-and-effect relationships to seamlessly and automatically deliver recommendations appropriate to any environment.
And the world of online personalisation looks set to become even more sophisticated in the near future – employing dynamic pricing and re-targeting to boost margins and convert visitors to loyal long-standing customers.
Andy Piscina is UK sales director at hybris software.