Retailers Pushing Toward Personalization
When shoppers browse your website, do first-time visitors favoring a product category get served the same recommendations as repeat buyers? Do “millennial technophiles” get the same experience as “adventurous empty nesters” or “fashion-forward moms”?
Retailers are increasingly answering “no” to these questions — and driving deeper customer engagement and more leads as a result. By dynamically personalizing the online experience based on visitors’ personas, CRM data and real-time individual behavior on-site, retailers can create a more fluid experience across channels that’s proven to yield more conversions. In fact, Infosys reports that 86 percent of consumers say personalization has positively influenced their purchasing decisions.
As a result, personalization isn’t just giving retailers a competitive edge, it’s becoming a digital marketing imperative. Gartner reports that companies that fully embrace online personalization by 2018 will outsell those who haven’t by 30 percent. Are retailers on the path to taking full advantage of those benefits?
The State of Personalization
With that landscape in mind, we at Evergage sought to understand the state of online personalization today, including how and when it’s being deployed, results, implementation obstacles, and more. As retailers want to reach their global, 24/7, multidevice customers, who demand information right here and now, during their moments of need (not the next time they visit), we focused specifically on real-time personalization — i.e., data-driven web personalization completed in under one second.
Our report, conducted with Researchscape International, contains survey responses from 242 digital marketers. Actionable results for retailers include the following:
- Personalization’s prevalence: Fifty-eight percent of marketers currently use real-time personalization. Its impact and use is growing exponentially — 91 percent of all surveyed use or intend to use it in the next year. For retailers, it’s a reminder to create and capitalize on one-to-one experiences … or risk losing mindshare.
- Where it’s used: Digital marketers primarily deploy personalization across their websites (76 percent), mobile sites (29 percent), web applications (22 percent) and mobile apps (16 percent). Retailers have an opportunity to innovate when personalizing. For example, showing visitors their browsing history based on time spent per product (vs. chronologically) and more.
- Segmentation methods: Marketers look at type of content viewed (48 percent), location (45 percent) and time spent on site (36 percent). Rue La La provides a great example of pairing well-honed segmentation strategies with A/B testing for effective personalization. The company presents “secret sale” messages when a shopper is about to exit the site, as well as cart abandonment messages that alert shoppers that their item(s) of interest could sell out. Strategies like these pay off, re-engaging would-be bouncers.
- Results achieved: Eighty-six percent of survey respondents report a conversion lift from personalization, with half seeing lift greater than 10 percent. Real-time personalization adopters also report increased visitor engagement (73 percent), improved customer experience (54 percent), increased conversion rates (53 percent), improved e-commerce revenues (34 percent) and increased customer lifetime value/loyalty (28 percent). Gardener’s Supply Company exemplifies such benefits. By launching a welcome message to visitors coming from Pinterest, it increased conversions from that channel by 200 percent.
- Results anticipated: Those who haven’t yet deployed personalization but plan to in the next year expect increased visitor engagement (78 percent), improved customer experience (78 percent), growth in customer acquisition (60 percent), improved brand perception (55 percent) and lift greater than 10 percent (54 percent).
Lack of budget was a common challenge (37 percent) to making real-time personalization a bigger priority, but it’s an obstacle retailers are remedying given the personalization benefits they experience and expect. In fact, one in two survey respondents said their personalization budgets will go up next year.
Other common challenges included lack of knowledge/skills (38 percent) and IT constraints (26 percent). However, with a new wave of personalization technologies — Personalization 3.0 — these barriers are dissolving. It’s no longer acceptable to spend a lot of time operating a personalization system or rely on IT for implementation/analysis. Today, easy-to-use, cloud-based systems empower retail marketers to launch personalization campaigns, test them, iterate on them and optimize the results. All this can be done quickly and easily, and on their own.
Personalization in Practice
The benefits of real-time personalization are no longer abstract, as retailers large and small embrace the marketer-friendly and data-driven tenets of Personalization 3.0. These survey and real-world results can help retailers amp up strategies to lower bounce rates, improve customer experiences and implement quick changes that morph their e-commerce sites from helpful resources into selling machines.
Karl Wirth is co-founder and CEO of Evergage, which provides real-time personalization to more than 500 million web visitors.