Personalisation has fast become a hot ecommerce topic of 2013. Retailers are keen to find out how they can use it to create thousands of variations of their websites, each relevant to a different visitor. But what exactly is personalisation, how does it work and what is the best way to put it to work on your etail site? Graham Cooke, chief executive of QuBit, and Ian McCaig, CMO of Qubit, took a look at what personalisation means in practice for the marketer in a recent Internet Retailing webinar, held in association with Qubit: Website personalisation – the best way to boost your conversion rates.
“One of the main reasons why conversion rates haven’t improved over the last 10 years is because websites as they currently stand don’t serve unique users,” said Ian McCaig, CMO, Qubit. “Effectively what’s happening is every user is presented with the same web experience. We believe a big leap forward in improving conversion rates is personalisation.” Thus McCaig set out his stall as he opened a recent Internet Retailing/Qubit webinar, Website personalisation – the best way to boost your conversion rates. Conversion rates, he argued, are an important area on which to focus because they can drive growth in the business.
Evolving personalisation
Already, he said, most sites are already using personalisation, to some extent, as they introduce A/B testing or related methods to optimise their site for all users. Some are already introducing rules-based segmentation, but the next step will be to introduce individual personalisation that remembers each visitor’s preferences and integrates them with third party data. Ultimately, real time personalisation will be based on algorithmic predictive models that predict content around behaviour.
“There’s huge opportunities to evolve and we generally believe that getting down to individual personalisation will be the biggest level for improving conversion rates,” said McCaig. It will be a significant evolution – for today it’s reckoned that 92% of visitors to a website don’t buy.
Asked in a poll how much personalisation they already had in place on their website, 30% of the webinar audience cited remarketing, 40% product recommendations, 10% rules-based site personalisation, 0% individual personalisation and 20% basket abandonment.
Why is personalisation so important?
Consumers, educated by Apple, Google and Facebook and empowered by the internet, have high expectations – that are rising, said McCaig. “Unlike going into a physical store you literally are only a click away from a competitor’s website so it’s absolutely critical that you try and improve customer experience,” he said.
He cited three retail companies that he thought were innovating successfully using data. Pointing to US site Fab.com, he said more of its conversions were now coming from social sites than from Google. Meanwhile, John Lewis is now rebuilding itself around digital, with more than £1bn now coming from ecommerce sales. And Farfetch puts data at the centre of its strategy, using it to “generate insight and turn that into action.”
One size doesn’t fit all, said McCaig, and that’s the next big leap for conversion.
Back to the future
Graham Cooke, chief executive of Qubit, the second speaker in the webinar, continued by pointing out that personalisation had been taking place in retail for some time, citing Tesco’s use of clubcard data to influence store layout. Online, personalisation started with product recommendation but now messaging, offers, announcements and widgets are all personalised. In order to achieve this level of personalisation, retailers must understand what type of users they have, where they are in the buying cycle and what technologies to use to target them with. Are they basket cases, who put things in baskets and never buy, lost souls, who can’t find what they’re looking for, first timers, who need reassurance before buying, or careful spenders, who leave gaps between purchases?
At the moment, said Cooke, retailer see conversion rates of an average 3% but the company believes they could be seeing conversion rates of 10% by moving away from the one-size fits all website.
In a poll, Cooke asked the audience to name their biggest challenges with personalisation. Some 8% cited bad data, 48% lack of resources/expertise, 12% technology not delivering return on investment, 24% IT roadblocks and 8% privacy laws.
And asked what type of technologies they were using, 13% said tag management, 48% web analytics, 0% web diagnostics, 26% A/B testing while 13% cited onsite apps.
The fundamentals of personalisation
Cooke broke down the fundamentals of personalisation into four steps: collect the right data; find insights; personalise content; test, measure and evolve.
Just as 48% of poll respondents cited the lack of resources or expertise, Cooke points to the need to build an organisation for the future. Development teams currently work with digital marketing teams. But in the future, he predicted, those marketing teams will be spit into three: teams focused separately on acquisition, merchandising and retention. Supporting both will be the development scientist who supplies the information both need to make their decisions. But McKinsey has predicted, there will be 190,000 too few data scientists by 2017.
Changing visitor behaviour
The data’s needed, argued Cooke, as visitor behaviour on the website changes. Where once there was a purchase funnel, driving lots of users towards conversion, now the reality is a consumer decision journey in which retailers must understand consumers’ different interests and triggers targeting them at the point when they decide. “Social media marketing is changing dramatically and that’s influencing the way we purchase today,” said Cooke. All of this means that more advanced models are required that combine both qualitative and quantitative data.
He went on to cite some insights Qubit had found from data: among others, Wednesday is a bad day to have a sale, visitors arriving at lunchtime are 33% more likely to buy, and Safari users spend £30 more on technology than other browser users.
The future of personalisation
In future, predicted Cooke, a marketer-led delivery mechanism will include presentation and data layers, working in tandem with the website and content management system (CMS) to deliver personal content to the individual. “Where we’re seeing businesses work most effectively,” said Cooke, “is where development teams and marketing teams are no longer working in siloed organisations but in one unit and are feeding back to the development team on a weekly basis the changes they need to be making.” One organisation is rewarding engineers based on its net promotion score. And it’s important to keep measuring the effect of personalisation, in order to show how it’s lifting conversions.
Case studies: how is personalisation working in practice?
French Connection
Qubit code sitting behind the French Connection website collects data from customer journeys to understand what kind of users are not converting. Insights from that included the fact that paid and natural search had lower conversion rates than other traffic sources. Those segments also brought users more likely to leave feedback complaining about price. In response, the company displayed messaging offering free returns when visitors from paid or natural search visited the website. As a result the company saw a 7.3% uplift in conversion from that segment of visitors. “We were able to turn that rom an A/B test straight to always on,” said McCaig. “One of the issues we see with a lot of ecommerce businesses is that they can’t turn an A/B test to always on because they are tied to rigid content management systems and rigid development cycles. This whole process took only two weeks.”
Childrensalon
Childrensalon identified that in certain markets it had low conversion rates. It deployed a localised live chat application, offering to speak to customers in their own language. “We found that by deploying that to the right user at the right time we could boost conversion rates by 13%.”
“Personalisation is not something that’s new to retailers,” said McCaig. “We feel it’s actually come full circle. If we look back to the village store where you would go in, the person would know your name and what you want, we feel that web 3.0 is bringing back that original village store experience.” The intervening 100 years has been impersonal, but retailers like Apple are starting to challenge and change that experience. Today, said McCaig, the biggest lever for conversions is a more personalised experience.
Questions from the Q&A session at the end of the webinar ranged from whether website personalisation should differ for B2B to requests for more details on the French Connection case study, and what level of development work was required in order to create a personalised experience.
To hear the webinar for yourself, to view the accompanying slides, learn about more case studies and hear the question and answer session, visit the Qubit webinar page on the Internet Retailing site. or visit the Internet Retailing webinar page for details of more events.
