Using data collection, online retailers today have the opportunity to offer increased personalization throughout the online shopping experience. Personalization is all about improving the customer experience, making it easier and more convenient for the customer to find and purchase products that excite them. At its core, personalization is something that retailers do to form stronger connections with their loyal customers and deliver a smoother customer experience.
The concept of a personalized shopping experience covers multiple categories – personalized marketing materials with individualized promotions and offers, a personalized sales experience with relevant product recommendations and accurate purchasing history information, and personalized customer service experiences, where the representative can access the customer’s profile and history to help solve problems. When retailers get all of these categories right, the result is an integrated, omnichannel customer experience that drives customer satisfaction and increased sales.
Personalization Helps Advance the Customer Relationship
For personalized online retail experiences to have the expected impact, online retailers need to do an effective and ethical job of capturing data from their shoppers. The data collection process offers retailers an opportunity to build a stronger relationship with the customer through escalating consent. When a customer shares their data with a brand, they’re saying “I trust you to use this information in a way that benefits my best interests”. The decision to share data with their favorite brands signifies a desire to receive personalized promotions, offers and content – it’s the shopper’s way of trusting a brand to help solve their problems.
There are many ways for online retailers to start gathering customer information. Some retailers use a CRM system to store and aggregate information about their customers, but that data still has to come from somewhere. Consumers may volunteer their contact information through in-store promotions like a credit card application or contest, or the online retailer may use a login portal for their website that requires customers to enable personalized experiences by creating an account. Web-based behavior analytical tools can also be used to capture data from website and social media visitors.
While the ability to track customer preferences and buying patterns using their data is an incredible benefit, it’s also a privilege that’s easy to misuse. Online retailers must toe the line between using privileged customer data to add value and convenience to the shopping process and using it to drive excessive or annoying marketing ploys. Customers may be delighted that you can track their purchase history, but if ads for your product follow them around the internet once they’re done shopping, the shopper may feel like their privacy isn’t being respected and the experience quickly turns sour.
Always respect the customer by letting them know when you’ll be collecting and storing their data and ensuring that collected information is put to use in a way that benefits the customer.
Personalization Offers Users a Tailored Experience
Personalization allows online retailers to tailor marketing, customer service and sales experiences directly to the needs of the customer.
Personalized marketing materials can be transmitted to the customer by e-mail or on mobile, and retailers can use their consumer data to deliver targeted images, messaging and offers. A 2016 survey indicated that while most shoppers are enthusiastic about receiving special offers from brands, more than half (51%) of respondents were annoyed when brands recommended goods that were not relevant to them. It is crucial that online retailers fine-tune their data collection, as errors or inaccuracies in the data collection process can potentially alienate customers instead of engaging them.
A personalized sales experience means that the retailer’s website remembers and recognizes the customer – it can make product recommendations based on their purchase history and trends, and it knows what they’ve bought in the past. Personalized loyalty offers, discount codes, and product recommendations based on viewing history and demographic data are all ways to drive sales and engagement throughout the purchasing process. Remarketing, targeting someone with an ad that shows a product they have recently viewed, is also an effective way to drive sales.
Personalized customer service experiences are created when customer service staff can access customer data and use it to help resolve issues or improve the customer experience. For example, think about a customer who calls in to ask for more information about a product listed on the retailer’s website. How much smoother would the interaction be if the customer service person could see the caller’s profile, along with their viewing and purchase history?
- The CSR could make product recommendations during the call based on the caller’s purchase history with the brand
- The CSR could find the product using the caller’s viewing history
- The CSR could see where the caller lives and look for in-stock product near them
- The CSR could quickly estimate shipping costs based on the caller’s location
- The CSR could ask for and update any missing information for the caller
To achieve this level of personalization, brands need to optimize their data collection process to capture data from multiple customer touch points, blend it together into one system, and make it accessible for front line sales and service representatives at every point of contact.
Online Retailers Reap the Rewards of Personalization
Online retailers can reap significant rewards from personalizing the retail experience. We live in a culture that places a high value on convenience, and personalization is one of the best ways for retailers to increase convenience and build engagement throughout the customer life cycle. Online retailers benefit from personalization in several ways.
Increased Customer Loyalty
It is getting harder for brands to reach new customer with their marketing efforts. Over 70% of respondents in a recent survey say that they are loyal to just a few brands, and many are overwhelmed by the huge amount of consumer choice represented on the worldwide web. Still, 36% of respondents said they would be more likely to buy from a brand that contacted them with a personalized message. It’s clear that relationship building through personalization is an effective means of growing brand visibility and building customer loyalty.
Enhanced Customer Engagement
The data that we have on personalization and customer engagement tells a very positive story about how personalization affects engagement for customers. Research published by Invesp indicates that 59% of shoppers believe it is easier to find more interesting product recommendations in a personalized online store, and 53% believe that retailers who personalize the shopping experience are providing a valuable service.
Does making the shopping experience easier for the customer translate into more sales?
It absolutely does.
Accenture published survey data that indicate the exact effect that personalization has on spending habits for our customers. The results showed that:
- 65% of customers were more likely to buy from a retailer that send them personalized, relevant promotions
- 65% were more likely to buy from a retailer that knows their purchase history
- 56% were more likely to buy when the retailer recognized them by name
- 58% were more likely to buy from a retailer that could recommend options based on past purchases
The respondents spoke loud and clear in this survey: personalizing the shopping experience with recognition, relevant recommendations, and remembering their purchase history makes it easier and more convenient to shop, and keeps shoppers coming back for more.
Personalization is the major transformative force in today’s online retail culture, allowing brands to build stronger relationships with customers, drive greater levels of engagement and boost sales. Brands that are not yet adopting personalization as a focus of their customer experience strategy should move quickly to offer a more customized and convenient retail experience for their loyal customers.