The Evolution of Personalization in eCommerce

As eCommerce continues to grow in popularity and becomes more commonplace, brands are shifting their focus to leveraging personalization for a competitive edge. eCommerce giants are competitive due to their infrastructure, supply networks, and high marketing budgets. As such, it's becoming increasingly clear that personalizing the user experience is no more an option but rather a necessity.

However, initiating personalization as part of a strategy and succeeding in it are two separate things. Consumers have higher expectations for personalization than they did in the past.

In this blog post, we’ll explore how the retail industry has evolved when it comes to developing personalized customer experiences.

How Personalization in eCommerce Has Changed

In eCommerce, "personalization" used to involve simple things such as customers' names being included in emails. Now, it means much more than that. It involves understanding the customer's past interactions with a website and crafting personalized experiences for each individual user.

For example, Amazon has been a leader in personalization since the early days of eCommerce — even before the term "personalization" was used.

The company has implemented an algorithm to suggest products to customers based on their previous purchases and viewings of items. In addition, Amazon also engages in personalization through its review system, where users are encouraged to share their experiences with products for other shoppers to read about before making a purchase decision.

Greeting a returning customer or user with their first name is now the bare minimum in terms of personalization. Personalization engines need to be able to update eCommerce search results in real-time based on consumer preferences, make recommendations based on specific consumer contexts, and predict customers' needs before they go to make a purchase.

Key Technologies for eCommerce Personalization

Achieving sophisticated levels of personalization will require technology investments and partnerships.

Some of the most important technologies for personalization include:

• Machine learning and artificial intelligence: AI-driven technologies can be used to analyze customer behavior, predict future purchases, recommend products that customers may be interested in, and develop personalized offers.
• Big data: Ecommerce stores are collecting huge amounts of data about their customers—from their browsing behaviors to product preferences. By leveraging big data, eCommerce stores can better understand their customers and deliver personalized experiences tailored to them.
• Real-time analytics: By monitoring customer behavior in real-time, eCommerce stores can quickly respond to customers' needs and make on-the-spot adjustments to personalize their shopping experience.
• Automated marketing campaigns: Automated marketing tools can be used to respond to customer behavior instantly, providing personalized offers and deals that are tailored to each individual user.

Using Consumer Data Effectively

Effective personalization is also dependent upon consumer data. Brands engaged in eCommerce used to rely extensively on third-party cookies from advertising networks and other providers. Google has since "depreciated" third-party cookies, so they aren't as viable a means of collecting and acting on consumer data.

First-party data is now paramount to personalization. Brands can collect first-party data by gathering information directly from their customers through surveys, registration forms, and digital interactions. This enables brands to better understand their customers' preferences and provide them with tailored experiences.

This data must be analyzed, leveraged for automation, and incorporated into strategies in the form of insights. Brands should also be aware of privacy regulations such as the General Data Protection Regulation (GDPR) in Europe, which requires companies to inform consumers about how their data is being used and collected.

Most consumers appreciate a personalized shopping experience, but they also want to know how you're collecting their data, how you're using it, and why.

Don’t Miss the Next eTail Canada Event

Personalization is quickly becoming a must-have feature for eCommerce stores, as customers expect more sophisticated, tailored experiences.

Stay up to date on the latest eCommerce trends and technologies by attending the next eTail Canada event. It’s happening from September 27th to 28th at the Hyatt Regency Toronto in Toronto, Ontario.

Download the agenda and register for the event today.