The Get-Started Guide to Ecommerce Personalization

Ecommerce Best Practices | 12 mins

Are you avoiding personalization because it seems too complex or difficult for your business? Or are you concerned that your current personalization strategy isn’t effective and needs to be retooled? This guide will get you started on the basics of personalization—no matter what market you serve or the size of your business. In this deep-dive, we’ll cover how personalization can help you:

1. Improve customer acquisition with targeted offerings.

2. Increase average order value with personalized recommendations and bundles.

3. Decrease cart abandonment by storing customer information, streamlining shopping, and personalizing cart abandonment emails.

4. Boost customer retention with personalized rewards and reengagement emails.

Even basic ecommerce personalization can boost a company’s relationship with their customers. A study by Accenture found that something as simple as greeting a customer by name when they return to your site makes 75% of customers are more likely to purchase from you.

Yet Adweek reports that nearly 73% of consumers report they haven’t felt engaged by a company in a personalized way. It’s clear that the majority of companies aren’t using personalization to its full effect, and the repercussions are considerable.

If you aren’t personalizing your ecommerce business, you’re hurting your bottom line. Evergage’s 2018 report on personalization said that 55% of marketers saw an increase in visitor engagement and 51% of marketers saw an increase in conversion rates through personalization.

In ecommerce, there’s ample opportunity to personalize—even more so than for brick-and-mortar-only businesses. Personalization can be based on anything from past purchases to location to survey answers. Personalization can have big benefits for your business. A Segment report from 2017 reveals that after they have had a “personalized shopping experience”:

  • 44% of customers are likely to become repeat buyers,
  • 32% of customers are likely to leave a positive review,
  • and 22% of customers are likely to post positively on social media.

That’s because personalization helps you build a better relationship with your customers. Receiving customized offers and personal greetings makes your patrons feel as though you value them because you “remember” them. This is especially so in ecommerce, where there aren’t store staff to remember and greet frequent shoppers.

Personalization can also help solve common ecommerce problems by adding value or removing friction. For example, shoppers who can easily navigate your marketing, offers, and website are more likely to purchase. But the benefits of personalization extend far beyond that initial purchase. In fact, four stages of the customer journey can be enhanced using ecommerce personalization techniques.

1. Improved customer acquisition

Ecommerce is a crowded space where customers have lots of options. And consumers won’t hesitate to go somewhere else if they can’t get what they want, receive bad service, or can’t find the answer to their questions.

This is reflected in rising customer acquisition cost (CAC), which has increased 50% in the past five years. CAC is one of the most important metrics for any business, and there’s no way a company can avoid spending on getting more customers — but making your spend more efficient will have a ripple effect on your profit and sustainability, and personalization can help.

Personalization Techniques to Improve Customer Acquisition:

If you run an ad and someone clicks on it, what page do they end up on? If it’s the front page of your website, you are missing an opportunity for personalization. Customized landing pages are an easy way to help customers find value on your site from the moment they land on it.

The key is to create landing pages that bundle information relevant to the ad content and that are personalized based on the user persona targeted by the ad.

For example, if you are an online barbecue supply retailer like BBQ Guys, you might run ads for a summer grill sale. Those can target potential customers who have browsed your site before and live in areas with warm weather. Instead of just sending those people to your homepage, think about what the customer might want to see right away. High-end, backyard grills with all the bells and whistles, and detailed specs for each. Then, make a landing page with your top-of-the-line sale grills so they hit the ground running when they click your ad.

These changes can make a big difference because they help visitors find what they’re looking for faster and encourages them to stay on it longer. This, in turn, can lower your CAC.

2. Higher average order value

Every business wants to raise average order value (AOV), but many businesses get stuck in a rut after using only a few basic tactics to do so, like encouraging customers to spend an extra X dollars to qualify for free shipping.

A great way to raise AOV by bringing customers more value is through personalization. When a customer can find more of what they love on your website, they’ll spend more money and time there. A great way to pull customers deeper into your webstore is through personalized cross-selling.

Personalization Techniques to Increase AOV:

One thing that can influence how much people order are personalized recommendations on product pages. By cross-selling customers with a curated selection of items below main product pictures, you can:

  • Drive people deeper into your site and products
  • Help people find more of what they like
  • Encourage people to complete a set of purchases (e.g., buying tennis accessories with tennis shoes)
  • Increase the amount of time that people spend on your site

When shoppers can explore more of your inventory—because you pointed them to items you know they’ll like—they’re more likely to purchase more from you during that browsing session. Salesforce reported in 2017 that 52% of customers who clicked on recommended items purchased one of them and that customers who clicked on a personalized recommendation had a 10% higher AOV than customers who didn’t.

Set up personalized recommendations:

The easiest way to cross-sell customers with personalized product page recommendations is through plug-ins compatible with your ecommerce platform. Most major hosts offer a variety of options, which you can find either on app stores like Shopify’s or by doing a search for recommendation engines online.

Don’t be afraid to include more than one type of nudge on your product pages. Take Williams Sonoma, who employ cross-selling with suggest items that either complete the shopper’s journey (e.g., by suggesting appliance accessories) or “Customers who view this also viewed…” (which is a personalized section that helps browsers comparison shop on your site).

Below is the recommendations section for an espresso machine. Note they (1) encourage customers to buy a reusable espresso pod for the machine, an obviously related and helpful suggestion, but also include (2) other espresso machines for those who are still shopping around.

Another great way to raise AOV by cross-selling to customers with personalization is shopping cart offer bundles, where you recommend additional items of interest based on what’s in a customer’s cart. For example, if someone is buying a beach towel, recommend a beach chair. Cross-selling related products encourages “impulse” buys and helps customers pick up items they may have forgotten—or not thought to purchase.

Set up offer bundles:

Use a recommendations generator for shopping cart pages just like you would with product page recommendations, or make your own bundles. The beach towel + beach chair is an obvious example, and every industry sells complementary items. Not sure what to bundle? Review what your customers are ordering and note patterns. If someone buys a rug, do they also frequently buy a rug pad, or curtains? Those are bundling opportunities.

Once you have determined which items to suggest that customers purchase together, make a rule in your ecommerce store to show the bundle whenever a customer has one of the items in their cart. For example, let’s say you put a Williams Sonoma espresso machine in your shopping cart and decide to check out. You’ll be shown product recommendations to complement it — in this case, coffee capsules for the machine and an “espresso carousel” for coffee capsule storage.

Go a step further by offering a discount to shoppers who purchase all items in the bundle. You will still raise AOV even as you offer a discount when customers purchase, say, three items instead of just one.

3. Fewer abandoned carts

A shocking 77% of customers on average abandon their carts. Lowering this percentage is key: Getting new customers to purchase rather than abandon lowers your CAC, and getting returning customers to purchase rather than abandon helps your retention. But that’s easier said than done when it’s not always clear why customers are abandoning their carts.

While you can’t know why some shoppers exit your site with items still in their basket, and while a 0% cart abandonment rate is impossible, personalization can help you tackle some of the most common root causes of cart abandonment.

Personalization techniques to reduce cart abandonment:

A long checkout process plays a huge role in whether or not people go through with their purchase. 26% of people who leave a webstore with items in their baskets do so for this very reason. A simple, but effective, way to make checkout shorter is to keep addresses and credit card information on file. The benefits of the one-page checkout process are noteworthy:

  • Saves customers time
  • Removes barriers to purchase
  • Works across every device
  • Makes your customers feel like you “remember” them

This shortened process can boost your conversion rates 10-15%. Plus, storing customer information is very easy to implement on major ecommerce platforms. There’s no reason not to.

Set up customer accounts:

Most ecommerce platforms offer customer account storage as a core feature of their product. Because customers with accounts don’t have to re-enter their name, address, and payment information for each purchase, their checkout experience is reduced to a log-in page and a “confirm order” button.

Looking for a one-click checkout option? Plenty of ecommerce platform plugins are available to choose from. But consider doing a trial run to see how it optimizes conversions for you. While there’s ample evidence that long checkout processes across industries are causing cart abandonment, one-click checkouts are still a gray area in terms of effectiveness.

Another way to reduce cart abandonment with personalization is to send cart abandonment emails. By customizing these emails to reflect the items in each customer’s neglected basket, you can combat different causes of cart abandonment. For example:

  • Include similar products to those that were in their basket. If a customer didn’t find what they wanted, or wanted to comparison shop, this can pull them back in.
  • Offer a small discount for larger purchases, which shoppers may have hesitated about due to cost, or for first-time shoppers who might need a nudge to try something new.
  • Showcase customer quotes and reviews for the products in their cart to reassure customers who may not be sure your product is right for them.
  • Offer financing options, showing them how much they can pay each month if they purchase now. At Bread, we’ve seen some customers triple conversion with cart abandonment emails that offer financing.

In every case, be sure to keep consistent messaging around your brand, products and services. What is it that you offer to customers that sets you apart? Quality? A generous return policy? Expert advice? Include that in your cart abandonment email along with your personalized elements to drive home why customers should finish their purchase.

Set up personalized cart abandonment emails:

The easiest way to introduce personalized recommendations and other custom elements to your cart abandonment emails is to see if your email provider has any product customization services or integrations.

Try offering a personal discount code for first-time shoppers, then remind customers of the items left in their cart and eiterate your company’s value propositions—features like no animal testing, boutique designers, handmade products, high-quality ingredients, and 14-day returns. When you set up your new, personalized cart abandonment emails, think carefully about what will help customers have confidence in finishing their purchase.

4. Boosted customer retention

Customer acquisition is expensive, so once you have acquired a customer, you want them to remain a customer as long as possible. This will ensure that you recoup CAC, and increase the lifetime value (LTV) of your customers. In fact, lowering your churn rate by just 5% may increase profits by upwards of 25%.

To increase your customer retention, focus your efforts on the things you can control, like customer service, product quality and choice. But don’t overlook the power of personalization when it comes to boosting retention. Ecommerce retailers are uniquely poised to retain customers by offering increased value through personalization, and raising your value proposition through personalization is a cost-effective way to tackle churn.

Personalization techniques to boost customer retention:

If you have a rewards or loyalty program for your customers, adding a personalized element can encourage customers to keep coming back to you. And if you don’t, you should—30% of consumers switch providers because they feel that there is no satisfactory reward for loyalty. Personalization helps you build relationships with your customers by offering incentives that add value to their lives, not just holiday discount codes or rewards points to redeem on freebies they may not want.

For example, Starbucks offers rewards members the ability to order ahead and personalized order suggestions in their app based on past purchases. For busy coffee lovers, this adds a layer of convenience that non-rewards members don’t get. Savings and added efficiency keep rewards members coming back into Starbucks.

Set up a rewards program:

To set up a custom rewards program, you need to have a loyalty scheme already in place. If you don’t, now is a great time to start. If you do, see if there are any personalization offers based on past purchases, etc. in your loyalty program’s offering. That can be an easy way to automate tailored rewards options into your offerings.

Another place where you can focus your churn reduction efforts is personalizing reengagement emails. When customers haven’t purchased in some time—usually over a month—retailers will try to nudge them back with an email. Use the opportunity to show customers more of what they like, reminding them why they love your products in the first place.

Set up personalized reengagement emails:

First, see if your email provider has any product customization services or integrations. Recommending based on past purchases or browsing history is an easy way to draw customers back onto your site. You can even give customers the option for customers to create a “wish list” on your site—an easy way to see what customers like and remind them of their favorite pieces to reengage.

Second, personalize the copy. Highlighting that you’ve made these custom choices just for them makes customers feel valued and underscores that you know their preferences.

Make personalization work for you

Implementing effective personalization tactics does not have to be complex or difficult. Every ecommerce company can find a way to use it to help their business, and getting started with personalization can be as easy as exploring options provided by the tools you already use to support your online business.

The best way to implement basic personalization is to identify a point in the customer journey or an ecommerce metric that needs work, and target it with a “personalization solution,” whether that’s raising your AOV or lowering your customer churn. This will ensure that personalization is easy to integrate into your business practice. It will also make it easier to see how well your personalization efforts are working.

In 2018, global ecommerce sales grew by 18%, and doing business online in 2019 means making yourself stand out through a superior customer experience. According to Oracle, 86% of consumers will spend more when they have a better brand experience, and personalization is a key part of making that happen. Get started today.