Cookies Are Ruining Your Holiday Sales. Here’s Why Session-Based Personalization is the Best Alternative
It’s no secret that late autumn is e-commerce’s busiest season. For online retailers, Black Friday, Cyber Monday, and Christmas shopping promise unprecedented success. Last year, the industry witnessed a record-breaking holiday season with $1.2 trillion in sales (a 16 percent year-over-year growth rate).
There’s an incredible amount of potential here — but year after year, most retailers don’t actually reach that potential. Even with third-party cookies and invasive targeting methods that aim to predict what consumers want, carts are still abandoned, marketing emails are left unread, and both customers and companies walk away from the holiday shopping season unsatisfied.
Still, there's hope — and it takes the form of season-specific, session-based personalization. To this point, online retailers have been operating as though their customers behave the same way every day of the year, but this simply isn’t true. In fact, actions taken during the holiday season are entirely unique. Retailers must recognize those nuances in order to improve customer experience and ultimately secure more checkouts; here are three cookie-free ways for them to get a head start.
Leverage Black Friday Activity to Inform Christmas Personalization
It’s common knowledge that shoppers use Black Friday and Cyber Monday as an excuse to get ahead on their Christmas shopping and jump on products that may normally be too expensive for them to even consider. Items go on deep sale, new items appear, and marketers do all they can to get consumers making purchases online and in stores. Yet most retailers don’t know that not only can they leverage the excitement and energy from Black Friday to continue momentum into December shopping, but they can also leverage unique behavioral data points to help make better recommendations while shoppers are behaving like completely different people.
It all boils down to what’s commonly called the “cold start problem.” The phrase is used to describe the two-pronged phenomenon in which it’s nearly impossible for brands to provide accurate recommendations to new and anonymous customers, or to recommend new products that haven’t yet been interacted with onsite. The stakes are high, too: 98 percent of web visitors are anonymous. And during the holiday season, either because of deal searching or gift shopping for others, every single consumer — even a frequent visitor — is essentially “cold.” So when it comes to Christmas shopping, it can be difficult for brands to know how to target customers, whether online or in email marketing, by starting from scratch.
However, if they’re able to quickly leverage insights gleaned from behavior-based, first-party data from Black Friday and Cyber Monday, then those follow-up interactions ahead of Christmas can be truly personalized and draw shoppers back in. In practice, this could look like a targeted email in mid-December highlighting recommended items based on Black Friday purchases, adds-to-cart, or other on-site behavior (rather than a blind guess at what they’re assumed to want based on their age or gender). Furthermore, companies can remind visitors about specific products that they looked at — but didn’t purchase — during Black Friday, and put them in the context of Christmas shopping to make the item newly attractive.
Recognize the Nuances Behind Holiday Gift-Giving
End-of-year shopping is unique when it comes to consumers' intentions. For most of the year, consumers are interested in making purchases based on what they want for themselves. This heavily influences their behavior on a website. For example, they’re not going to look at items that they themselves don’t have any interest in buying. Therefore, companies have grown used to leveraging historical, demographic-based data to color future personalization efforts. However, Black Friday and Christmas force consumers to think outside of the box and shop for loved ones.
In practice, this would flip a typical company’s entire personalization system upside down. For those using third-party cookies to glean personal information about a shopper (e.g., age, gender, location), product recommendations during the fall would be entirely outdated and wrong. Instead, by using session-based data — i.e., analyzing clicks and time spent on different product pages — to make relevant, in-the-moment recommendations, brands can immediately set themselves up for more success no matter who the products are being purchased for.
Furthermore, given that consumers may not be fully familiar with a loved one’s preferences, the power of personalized cross-selling and upselling becomes even more relevant during the holiday season. At checkout, if shoppers are presented with additional bundled items based on what’s already in their cart, they’ll likely feel grateful for the smart recommendation and excited about the prospect of pleasing the person they’re buying for.
Employ the Power of the Last-Minute Opportunist
Most consumers are all too familiar with the stress of December. Unfortunately, rather than helping assuage that stress, brands typically tend to add to it by piling on generic, unhelpful marketing emails that lack a meaningful understanding of the consumer’s shopping experience. Instead, they should recognize a key truth about the season: many customers become last-minute opportunists. In other words, they’re stressed about finding the right gifts on time — and therefore they want to be told what to buy.
The result? Consumers during this time become impulse buyers, and are naturally more interested than ever in sales. If a T-shirt is heavily marked down, it automatically becomes like a new product in a customer’s head, as it now represents their most attractive option for finally being done with holiday shopping. This psychological phenomenon means that brands have the power to turn the “cold start” from a problem into an opportunity, refreshing items via markdowns to shine a new light on them and make their renewed value clear. To do this, it’s critical to have the technology, centered on first-party data, to be able to quickly adjust product recommendations to each unique shopper, even if they’re brand-new to a site.
The Time is Now
More than half of online shoppers in the U.S. have recently abandoned their cart because they were “just browsing,” or not ready to buy. But the next few months tell an entirely different story; brands will witness their customers become newly energized when it comes to holiday shopping. There’s tremendous potential for retailers to seize the opportunity and adapt accordingly; if they can abandon traditional cookie-based strategies and leverage new technology to meet consumers where they are, they can unlock their most successful holiday season yet.
Alexandre Robicquet is the co-founder and CEO of Crossing Minds, a content recommendation platform.