Technology is transforming the techniques and methods of business, and the changes are in favor of both the entrepreneurs and the clientele. One amazing result of this evolution is the incredible personalization of e-commerce that’s possible these days.

E-commerce personalization uses various technologies such as machine learning, big data analytics, customer relationship management systems, predictive analytics, customer segmentation tools, recommendation engines, dynamic content delivery, geolocation technology, A/B testing tools, and artificial intelligence.

To keep ahead of the curve, you need to familiarize yourself with e-commerce personalization methods and devise a strategy that suits the requirements of your business. 

A Brief Overview of E-commerce Personalization

E-commerce personalization is the tailored approach that constitutes the modification of online shopping experiences of users based on their behaviors, preferences, and demographics. 

Image Source: Freepik

When you visit a store in person, an employee greets you and asks about the products you’re looking for and your preferences. The employee then proceeds to guide you through the store depending on the information you provided. If you provide details and take benefit from the knowledge and experience of the employee, you’re likely to get the desired product faster. You’re also more likely to have a good experience with the store. E-commerce personalization has a similar effect.

With the help of tools, you will analyze the data provided by customers. Based on the insights, you will make efforts to align your offer with customer needs and preferences. Such personalization efforts will increase customer engagement and satisfaction, leading to higher conversion rates for your company. In time, successful personalization strategies and tactics will boost the reputation of your company. 

Why is Personalization in E-commerce important?

Modern consumers do not have a dearth of options. However, searching for the most suitable option takes time and energy. Consumers prefer platforms that help them save time by filtering out the extras and presenting only the most relevant items. When a business provides a consumer with such a tailored shopping experience, it makes the consumer feel more valued. The consumer is more likely to return for more, and this is how personalization fosters customer loyalty. Personalisation becomes absolutely crucial for stores that focus on B2B E-commerce and deal with retailers and other bulk buyers.

In a typically low-loyalty environment or industry, non-personalized communications increase business risk. Consumers are generally quick to switch to another store or product if they are not happy with the experience.

The surge in digital transactions since the pandemic has resulted in an escalation of customer expectations. Now, consumers are more exposed to personalization practices, and e-commerce giants have raised the bar for all others. 

 A study by McKinsey & Company provided these insights about personalization:

1. A majority of consumers (71%) expect personalized interactions from the brands and businesses they pick, and 76% indicated that they get frustrated when companies fail to live up to these expectations.
   
   

2. Consumers ‘reward’ personalization. Around 76% of shoppers said that personalization prompts them to consider purchasing from a brand or business. Approximately 78% said they would probably repurchase from companies that personalize, and 78% also indicated that they’re likely to recommend such brands and businesses to their friends and family.
   
   

3. The companies that excel at personalization generate more revenue (40%) through it and grow faster than their counterparts. 

These insights indicate that personalization leads to better customer outcomes and improves performance. Personalization has become more important than ever. It drives repeat engagement and loyalty in these times when customers have a sea of options.

Benefits of E-Commerce Personalization to a Small Business

Personalization holds the power to influence customers to choose your brand over others. The benefits of e-commerce personalization to a small business extend far beyond just the enhancement of user experience. Take a look at some other benefits of personalization that can help your small business forge ahead: 

Increased competitive edge: You can stand out in the market by providing a level of personalization that may be challenging or even impossible for larger competitors to achieve.  A high level of personalization is a unique and valuable differentiating factor.

Building relationships with customers: Fostering connections with customers is important for all businesses, however, it is crucial for a small business. Personalization contributes to the creation of lasting and positive connections between customers and the brand. Your business will be able to cater to the individual needs and preferences of your consumers, which will breed trust, engagement, and loyalty.

Source: Freepik

Improved conversion rates: Tailoring the online shopping experience according to the preferences and behaviors of individuals can lead to higher conversion rates and more successful transactions for your small business. With personalization, your business will help customers cut through the clutter and find exactly what they are seeking. If the content of your homepage or landing page is curated carefully based on user data, it is likely to have a lower bounce rate. Serving product recommendations based on browsing habits and previous purchases also increases the likelihood of customers making purchases.

Efficient Inventory Management: Personalization can help your small business predict and prepare according to customer requirements and preferences. This allows for better inventory management and reduces the risk of unfavorable inventory situations such as overstocking and understocking. 

Flexibility in Customization: Your small business is likely already quite agile when it comes to adding customized features, and the personalization process can amplify this flexibility. You can adapt your offerings based on the insights and feedback from customers, which will ensure that your products always align with evolving customer expectations.

Getting Started: Integrating Personalization in Your Marketing Strategy

An excellent personalization strategy will ensure that you’re able to present the right product or offer at the right time to the right people. When you consistently deliver value in this way, you can improve your bottom line, foster customer loyalty, and strengthen your reputation. Here’s how you can start the personalization process:

Create a Customer Journey Roadmap

Outline the stages and touchpoints that a customer goes through when interacting with your business platform. With the guidance of an accountability coach, a professional uniquely skilled in goal-setting, motivation, strategy, performance improvement, and feedback, this roadmap becomes invaluable. This expert helps to grow your business by assisting in creating the right roadmap, ensuring progress and consistency.

This roadmap will help you understand customer needs at each stage and optimize the user experience at every step with increased personalization.

Collect Data and Consolidate

For effective personalization, you’ll need relevant customer data from each touchpoint. Think of data as personalization fuel. The more knowledge you have about your customers, the better your personalization and results will be. User data such as past purchases, browsing history, and demographic information will help you gain a better understanding of your customers.

Especially track the pages viewed, time spent, wishlist items, cart items, and the exit page for first-time customers. In the case of returning customers, information such as past purchases, average order value, previous interactions via email or instant messaging, the time interval between purchases, and customer lifetime value can prove useful. 

Consolidate the data and create customer profiles. Use analytics and visualization to 

gain actionable insights into the buying patterns and preferences of your customers. 

Segment and Target

Although your goal is to personalize the experience of each customer, you’ll find that you can create customer cohorts based on similarities, making it easier for you to target them to increase conversions and secure brand loyalty strategically. You can segment your customers based on factors such as shopping behaviors, engagement patterns, geolocation, devices used, and demographics. 

Source: Freepik

Pick the Right Strategies for Personalization 

In marketing, one size does not fit all. You’ll need to alter or vary your personalization techniques depending on individual scenarios. To foster engagement with your customers, you’ll need to choose the right personalization strategies such as product recommendations or abandonment campaigns.

You might need to extrapolate your strategies or devise specific strategies for VIP customers who have a high frequency of purchase and average order value. Send them emails with exclusive offers and preview invitations from your own business domain. Reserve access to certain sections of your website for such customers or provide them with early access to new products. Use suitable personalization strategies and tactics to maximize the lifetime value of VIP customers.  

Train Your Team Members for Effective Implementation 

Personalization of e-commerce involves the use of the latest technologies, and training your team members in those is crucial for the successful implementation of personalization strategies.

The team needs to understand the fundamentals of personalization concepts, identify key touch points and personalization opportunities, collect and analyze data, understand and work in line with regulations, personalize content, experiment with personalization strategies, articulate the value of personalization to customers, and remain updated with the latest personalization trends and technologies. To help the team learn all that they need to know for effective personalization, arrange regular training sessions and ensure that they have access to relevant resources. 

Allow Your Customers the Choice to ‘Opt-In’ to Personalization

Third-party cookies have played a fundamental role in helping businesses provide more personalized experiences to users, but these cookies have also given rise to privacy concerns. Chrome has started the process of phasing out third-party cookies this year. This means, businesses will have to stop relying on third-party cookies and work with alternative strategies.

You have to balance user privacy with personalization. Try strategies such as the collection of first-party data, encouraging users to create accounts on your platform, and implementing transparent consent mechanisms for data tracking and usage. Let your customers choose how personalized they want their experience to be. Monitor the results of your strategies, and adapt and optimize as necessary.

Wrapping Up

In 2024, utilize the upcoming technologies to your advantage, even if the scale of your business is relatively small. Doing so will give you a definitive edge over your competitors. What you may think of as the limitations of your small business, could prove to be your advantage over the big players. Personalization is typically less challenging for a small business. However, the extent of personalization you’re able to attain will depend on the resources, technology, and specific strategies that you choose to employ. Personalization can open up plenty of opportunities for your small business, so you may need to focus on it a bit more this year. It’s time to not only meet but exceed the expectations of the customers.