E-commerce Personalization: 8 Reasons To/Not To Personalize Your Webshop

E-Commerce has grown steadily over the last 12 years. Yet after 2020, it has experienced a meteoric rise in both popularity and demand, with KPMG estimating that 50% of purchased goods will come from online sales by 2025, five years earlier than anticipated.

So, I hear you ask 🧐: what strategies are successful e-commerce businesses using to get ahead of their competitors?

The top answer is e-commerce personalization, namely personalizing your customer’s shopping experience at every touchpoint💡.

Hands up if you've received a recommendation so irrelevant to your search it was actually comical? Like the time you were in the market for a wooly scarf in the dead of winter when the suggested accompaniment for your online purchase was a strapless bikini?

In fact, up to 71% of consumers claim that they feel frustrated when a shopping experience is impersonal 😫.

E-commerce Personalization

The fundamental principle is to deliver personable interactions to the everyday online shopper.

This is done so through utilizing advanced AI-powered algorithms that can understand and monitor consumer behavior: analyzing their purchase history, click behavior, browsing history, as well as multiple other metrics.

Powered by cutting-edge AI and machine learning technologies, Clerk.io makes it easy for e-commerce stores to provide customers a long-desired personalized omnichannel shopping experience.

📖Learn more: How Ugleunger uses Clerk to deliver personalized experiences with minimal efforts.

What Purpose Does Personalization Serve?

E-commerce personalization enhances user experience (UX). In turn, it also drives conversion rates and overall sales by providing customers relevant content, tailored offers, and personalized product recommendations in alignment with each customer’s buying interests.

Here we’ll analyze the benefits (and potential pitfalls) of e-commerce personalization platforms whilst identifying HOW this increasingly popular strategy could be a winner for your business.

4 Reasons to Invest in E-Commerce Personalization

1. Enhances User Experience

A recurring debate surrounding e-commerce vs. traditional shopping often boils down to the perception that the customer misses out on personal recommendations they would usually receive in-store when conducting transactions online. However, this needn't be.

A personalization platform offers nifty AI and machine learning technologies to best understand each customer 👨‍💻.

By automatically offering personalized product recommendations in real-time, your customers will be exposed to relevant products in alignment with the items they’ve previously searched for or looked at. In addition, the analysis of customer behavior serves to optimize user satisfaction by making the shopping experience more tailored to the individual.

Yet, it seems that not many businesses are doing so:

2. Increases Conversion Rates

In an extensive study conducted by eMarketer, global retail e-commerce sales are expected to surpass 5.4 trillion USD by the end of 2022. Like previous years, global e-commerce sales continue to increase whilst brick-and-mortar annual revenue has since stagnated.

What significance do personalization platforms play in your e-commerce success?

Some B2B & B2C companies always experience an increase in overall revenue thanks to the various personalization strategies integrated onto their online platforms. For instance, displaying recommendations that are more relevant to a customer’s buying/search history will naturally drive buying interest, thus increasing conversion rates and/or basket size 🛒.

Below is an example of Chemist-4-U's personalized product recommendation banner:

As the figure exhibited, after a customer has checked out to purchase their product, yet, prior to payment, four additional items relevant to the original product appear on the slider (on the bottom part of the screen). Each of the additional products displayed is relevant to the original item, either as alternative options or complementary items. Here, each hyper-relevant and personalized product recommendation can act as an effective method to generate additional sales 💸.

If you want to learn more about other fantastic product recommendation methods, check out how Munk Store displays cross-sell recommendations to increase AOV with Clerk.

3. Personalization Saves Time

Gone are the days when recommended products would be keyed in manually. Not alone is it brain-numbingly tedious (seriously, ask anyone who has had the responsibility of matching products), but such a monotonous task is also prone to human error ❌.

With integrated AI that is designed to predict a user’s needs with great accuracy and speed, personalization platforms will allow you to get on with other matters as it works its magic.

With Clerk, an easy-to-use backend system will also allow you to monitor your conversion rates and AOV (average order value), whilst simple alterations can be made and implemented immediately.

With automatically displayed recommendations customized to each customer, you can concentrate on the other things that help your e-commerce company run smoothly.

4. Play in the Major Leagues

So, you might think that big players like Amazon have access to more superior personalization platforms?

Not really! You don’t have to be a global e-commerce powerhouse to integrate effective personalization strategies and omnichannel targeting that enable you to combine all of your platforms simultaneously, creating a more seamless and user-friendly shopping experience.

With Clerk, you can have all functionalities on one single platform, and your webshop will become much easier to manage. Some of the top functions include:

- A sales- and behavior-based intelligent search engine

- Personalized product recommendations

- 1:1 email personalization on autopilot

- Next-gen audience segmentation engine (as presented in the following figure).

Here presents one effective way to segment your customer, that is to target by customer type: one-time buyers, loyal customers, frequent buyers, and VIP members.

Based on this knowledge, you can target each audience segment with tailored marketing emails, incentivizing them with special offers or displaying the latest products in your catalog.

💡If you want to learn more about how to sell more by using segmentation in email marketing, check out our latest article.

4 Reasons Why Personalization May Not (Yet) Be for You

1. You Have Limited Products

Let's speak hypothetically.

If your webshop sells less than 20 products, now comes the question: would such sophisticated technology be necessary for a company with such a minimal volume of SKU (Stock Keeping Units)?

In Layman's terms: no, it wouldn’t.

Although customer data analysis and personalized marketing emails may still remain an effective ploy for improving customer engagement and segmentation, it would be less rewarding to analyze a customer's online behavior if they only have access to a small-scale product catalog.

2. You Have Limited Sales

E-commerce personalization can only work its magic if your webshop is generating sales 🛍.

As the technology is largely data-driven 📊, it requires regular visitors on your online platforms to help collate the data. From this, various personalization strategies can be carried out to ensure your users are receiving a tailored online shopping experience.

3. Expect to Pay

Just like most technologically advanced platforms, it doesn’t come for free💰.

To those who are new to e-commerce or are in-fact experts in the field, it’s essential to acknowledge that regular investment into your business helps to grow a larger customer base with increased conversion rates, thus making you compete more fiercely within your industry 🏆.

Point to consider: personalization platforms usually offer annual contracts to their customers, although some do offer their products on a month-to-month payment basis. From $29-$55,000 per month, the various personalization functions you wish to incorporate onto your platforms, followed by the breadth of sales your company experiences, reflect the overall price of the service.

It’s worth reaching out to a handful of providers to identify the most financially competitive companies, whilst analyzing previous customer reviews of the services in which they provide. We’re super proud that our users LOVE us, with 100% of users rating Clerk with 4 or 5 stars on G2, the world’s leading software review platform.

4. Implementation Times May Fluctuate

Possessing a level of impatience when it comes to getting business matters in place can be an amicable leadership quality. Yet if a company can guarantee a 15-30% growth in online sales, then sometimes it’s worth the wait 😎.

Yes, some personalization functionalities can be set up and ready to go within hours. Yet, some companies have previously documented some issues with their integration that have resulted in a prolonged installation period. Although this is somewhat an anomaly, such issues have been known to occur.

In addition, a dedicated customer success team should iron out any issues that may arise during the implementation process, and most personalization platforms (including Clerk.io, of course 😉) provide such a service.

Key Takeaways

1. Effective adoption of a high-performance personalization platform will allow your e-commerce company to convert more sales.
   
   
2. There are various functionalities and strategies involved with e-commerce personalization, from the gathering of audience data to specialist merchandising features that work conducive to help increase traffic whilst creating a better online shopping experience for your customers.

Do you want to start personalizing and increase sales today? Being the world’s #1 rated e-commerce personalization platform, Clerk.io powers 2,500 + webshops worldwide to automatically grow sales and drive revenue. Reach out to one of our specialists today.