The Benefits of Personalization in Ecommerce
In addition to simply delivering a better overall shopping experience to users, there are many well-documented benefits of personalization in eCommerce for retailers. Our own internal data shows that companies that prioritize an end-to-end personalized shopping experience realize a 400% (or more) ROI from their digital marketing initiatives. Personalized store messaging creates consistency across all digital channels, providing customized, relevant content throughout a shopper’s digital shopping journey from discovery to purchase to fulfillment and reengagement.
Consumers are demanding personalized eCommerce experiences
Personalized shopping technology enables retailers to provide individualized experiences to shoppers across digital shopping channels by leveraging past shopping, behavioral and other data to dynamically display or deliver personalized content during a user’s digital shopping journey.
Shoppers want and expect this type of in-depth personalization and are frustrated when they don’t get it. Our internal research has found that marketers experience an average increase of 20% in sales when leveraging personalized experiences. So eCmmerce personalization does pay off when retailers get it right.
The top benefits of eCommerce personalization with examples
By leveraging existing customer data like browsing behavior, purchase history, demographics/psychographics, and other first and third-party data, retailers can tailor ad messaging, product recommendations, sales and offers, rewards and more.
Higher Average Order Value (AOV)
Personalization boosts revenue, contributing to higher average order value (AOV) by increasing total conversions and lifting shopper engagement which has been shown to boost purchase rates.
In a recent study by Gartner, nearly 90% of consumers surveyed indicated they want to see more personalization from brands, so it makes sense that personalization leads to higher AOVs. Personalized product recommendations, well-timed BOGO offers, and pre-approved installment payments are examples of personalized store content that boosts AOV.
Reebok, a Monetate client, leveraged three separate personalization experiences including:
- customized home page carousels
- dynamic product pages designed for each customer, and
- a personalized home page tailored to return customers.
This combined personalization approach was extremely successful for Reebok, lifting revenue per session by 4% during Black Friday 2020. The initiative also increased add-to-cart (ATC) rate by 6% and improved clickthrough rate (CTR) from the home page to product pages by 12%.
Improved Customer Engagement and Loyalty
Brands that successfully identify customers and combine customer data with in-session analytics can create better experiences for shoppers. Our internal research demonstrates that when brands focus their efforts on collecting the right customer information like past purchase data, shopping preferences, and more and combine this with website behavioral data, they achieve increased engagement rates of up to 45%.
By improving customer engagement, personalization can help mitigate the risk of cart abandonment and reduce bounce rate, particularly for second-time purchasers. Customers who are between their first and second purchases are at a higher risk of not making another purchase.
Ecommerce Personalization Creates Compounded Value
Personalization helps keep the door open with past customers and personalized store experiences deliver more value as they accumulate.
In fact, conversion rates increase by as much as 1800% between the first personalized shopping experience and the tenth. Personalization also increases add-to-cart rates by nearly 700%. Leveraging past purchase data to make relevant product recommendations keeps your most loyal customers coming back for more.
Personalized data from existing customers can also yield insights for creating personalized shopping experiences for new visitors. Think of personalization as a flywheel—once it starts, it drives value at an increasing scale.
Advanced Insights From 360-Degree Customer View
A data-driven approach to personalization enables retailers to have a 360-view view of each customer. By combining online and offline data including customer transaction history, preferences, and online session behaviors with real-time inventory data, retailers can deliver more powerful shopping experiences across all channels.
Rich customer insights help retailers understand what works and what needs improvement.
Advanced features like automated personalization insights, cohesive testing and targeting analytics dashboards, and native integrations with top analytics platforms foster better customer experiences. This enables eCommerce businesses to monitor and act on customer preferences and trends when they’re happening.
Personalization in eCommerce is worth the investment
The ability to deliver sophisticated personalized shopping experiences is more important than ever. According to eMarketer, after a slight dip in 2022, US retail eCommerce sales growth is expected to accelerate each year through 2027. This forecast also suggests that eCommerce sales will reach $1.736 trillion and make up more than 1/5 of all retail sales.
Therefore the time is now to invest in personalization to significantly improve CX, build brand loyalty, and increase revenue.
Monetate’s eCommerce platform
At Monetate, our eCommerce personalization platform is focused on testing and optimization, and driving personalization throughout the entire digital shopping journey.
Our goal is to help you shape better customer experiences based on a foundation of data by enabling you to:
- Build more valuable audience segments based on behavior, context, 1st-and 3rd-party data, and more
- Leverage AI to discover and build deeper audiences for more specific and expansive personalization opportunities.Use machine learning to conduct advanced testing and optimization initiatives without the need to wait for statistical significance.
- Provide 1-to-1 (e.g., individualized) shopping experiences by leveraging machine learning to optimize content, messaging, and layouts.
- Deliver powerful digital shopping experiences and provide valuable customer insights within a user-friendly dashboard-driven environment.
Monetate is recognized as a leading testing and personalization vendor in the commerce space. Our end-to-end eCommerce personalization solutions are built on a modern unified platform focused on helping our customers deliver connected shopping experiences that are personalized across the entire customer journey.