Why Personalization is the Linchpin for Retailer Success
Coming out of an explosive year, retailers and brands alike are looking to be better prepared to capitalize on the rapidly changing nature of retail. With e-commerce experiencing unprecedented growth during the pandemic, online retailers are looking to automation to enhance their overburdened merchandising teams' capabilities, without massive investment.
In 2020, we saw online sales skyrocketing, and merchandisers spent more time trying to figure out how to fulfill an order than they did optimizing their website. This year, retailers will look to invest in new technologies, including personalization, which will become a staple among e-commerce brands.
Shoppers have now come to expect a personalized experience as a baseline when they visit a website. According to Forrester, more than one-third of U.S. adults want online retailers to do more to offer them personalized experiences. Major OTT brands that became a staple in consumers’ lives in recent years, such as Netflix, Spotify, and YouTube, offer unique personalized recommendations — and it’s now time for online retail to stand up as equals. Moving forward, technology investment decisions should be hyperfocused on getting the right product in front of the right person at the right time, no matter the shopping channel, which begins with personalization.
Create Thumb-Stopping, 'Bingeable' Shopping Experiences
Retail is a highly saturated market. As such, it’s crucial for merchandisers to establish customer loyalty at an early stage, and personalize their offerings. A retailer’s site should create a thumb-stopping, "bingeable" shopping experience consumers can’t click away from. This is where personalized recommendations can take over and help customers discover products that match their tastes, preferences and context. Personalization does this by highlighting individual items or products that are complementary to what a shopper is currently viewing or has in their cart. For example, a shopper who recently viewed athletic leggings might be interested in a matching top, or running shoes of the same color or brand. Helping a shopper find the products they’re looking for — or products they might not have even known existed — will establish trust and continue to drive loyalty, and consequently high-converting shopping journeys.
Opportunities to Improve Site Performance
With artificial intelligence (AI), insight into behavioral data can automatically curate product recommendations across a site. AI models learn from shopper history, real-time behavior and preferences to provide the most relevant, curated products on a page. This offers benefits to the retailer and customer simultaneously, including:
- Driving Cross-Sell and Upsell Opportunities: Personalized recommendations can include complementary items to the product being viewed, or suggest similar results with a higher price point. Greater relevance drives a higher likelihood for a shopper to increase their basket size.
- Activating Return Purchases: Recommending alternatives to recently returned items can help shoppers find exactly what they’re looking for. Additionally, showing items similar to recent purchases can help drive a sale. If a consumer recently bought a tent, they might also be interested in a tarp or tent mat. When they return back to the site or open up an email from the retailer, these items will be featured.
- Curate High-Performing Items: Based on category or sitewide best-sellers, retailers can boost their trending products and highlight them on the top of pages. If floral dresses are trending, those top performers, as well as the specific brands a consumer has purchased in the past, will populate when she visits the merchant’s site.
- Control Which Products Are Displayed in the Moment: Retailers can boost recommendations of preferred brands or product lines based on specific attributes. This is beneficial if a shopper shows past affinity for specific brands.
Retail Has Outgrown Standardization
Personalization is more than just an opportunity to increase conversion rates. To do so requires a productive combination of AI and human input, so online retailers are free to get creative and think outside the box. People are not one-size-fits-all in clothing, taste or location. With personalization, online retailers will be able to answer this need and keep their organization moving forward toward success in this new era.
Peter Messana is the CEO at Searchspring, a global leader in site search and merchandising.
