TAGS: AI CX Merchandising Online Shopping Retail
Learn about the key things to consider when tackling personalization.
You hear the word nearly everywhere you go. In fact, it’s been a buzzword for so long, it’s starting to take on a life of its own. And yet, people seem to have lost sight of what it actually means. There are as many different definitions as they are people talking about it.
‘A lot of retailers are very eager to add Personalization to their sites,’ says James Wilson, Product Manager at ATTRAQT. ‘Some of them make the mistake of thinking they can get everything they need from a black box Personalization solution. Just plug it in and problem solved,’ he says. ‘They rush to develop something, and often lose sight of the goal: a better customer experience, higher conversion rates, and more loyalty. If those are the goals, Personalization requires a lot more work.’
As James explains, rushing into decisions about Personalization can actually damage your overall strategy and site. ‘Keep in mind than many Personalization solutions will either destroy or reduce the amount of caching on a site. So the speed your customers enjoy today could be seriously affected.’
So, where should retailers begin when it comes to Personalization? According to James, the best place to start is with the definition. ‘Personalization itself is really a fragmented idea,’ he says. ‘It’s different for every retailer, and every retailer must decide what it means to them and their customers.’ Some retailers need to personalize according to individual users. For others, effective Segmentation is enough.
‘Most important when you’re defining Personalization is to remember that it’s a journey, and not a destination,’ James says. ‘Retailers should not expect to implement an out-of-the-box solution and be done with it. Instead, they should expect to make small, incremental changes and measure them to see what works best for their target group in the long run.’
It’s no wonder that retailers struggle with effective personalization. Beyond the challenge of developing an effective strategy, retailers may find it difficult to get the strategy off the ground. ‘Personalization needs data,’ James explains. ‘but it doesn’t need to complete or “Big Data”. Small pieces of data can provide a valuable starting point and help contribute towards defining your strategy.’
James recommends finding a way to incentivise customers to share their data. ‘Customers are more likely to share if you sweeten the deal,’ he says. ‘Offering a 10% discount to those who create an account, or a lifetime discount to those who identify their favourite brand will not only give you extremely valuable data, but will also help you define your customer personas. These are two key elements of a good Personalization strategy, and well worth the small discount you offer to get them.’
In addition, technology and user behaviour can also limit Personalization opportunities. ‘Many users only log in to their accounts when they’re ready to check out,’ James says. ‘It’s too late to personalize Search or Merchandising if the shopping cart has already been filled. So retailers need to find ways to encourage customers to log in sooner – or they need to personalize differently.’
After defining what Personalization means for them, retailers should develop a strong strategic roadmap to get there. ‘A lot of our customers ask me what Fredhopper can do with regard to Personalization,’ says James. ‘I usually respond by asking them what it is that will improve their customers’ experience. Without a clear strategy that’s integrated into their broader eCommerce objectives, it’s likely that most Personalization efforts will fail. It’s a marathon, not a sprint. So the wisest retailers make it part of a much longer-term plan.’
‘Making a big change towards personalization won’t always deliver big results,’ James explains. ‘And it’s nearly impossible to go from having zero Personalization on your site to having full and effective Personalization. The key is to start out with small efforts that you can test and analyse. You won’t always be sure what your customers want until you offer it to them and ask for their feedback.’
To get started, retailers may want to consider some very basic Personalization opportunities that can say a lot about how their customers respond. ‘The first way to try personalizing would be to predict the shopper’s gender when they search for neutral terms, like “jeans” or “shoes”. Their click behaviour in the results will give you a good indication of whether they’re male or female. And then, in the rest of their shopping journey, you can customise their search results according to that gender.’
James also reminds us that, on average, iPhone users are willing to spend a bit more than Android users. ‘This simple fact of retail can translate into a significant money-maker for retailers,’ James says. ‘If search is happening on an iPhone, retailers know they can adjust their results to push higher-cost items.’ With these simple adjustments, combined with A/B testing, retailers can already begin to get a sense of what their shoppers want, and start collecting data about the gender and devices of their frequent customers. And, since every data point helps, it’s a good start to a long-term strategy.
James offers Five Tips to ensure that your Personalization strategy remains on course and effective. ‘When you think about it, most of these tips include a healthy dose of common sense,’ he says. ‘But combined with the right partners and the right tools, retailers can really take control of their Personalization activities. And that’s what it’s all about.’
Personalization means different things to different retailers. One-to-one Personalization might be the solution of some retailers’ dreams, while for others it’s a total nightmare. In the beauty industry, it’s easier to learn user preferences, because beauty products are purchased based on specific features or concerns, like thick hair or oily skin. But in the world of fashion, tastes, styles and preferences are harder to pin down. With a clear, effective strategy and James’ Five Tips, retailers can navigate the confusing waters of Personalization and turn a business buzzword into booming conversion.