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Why marketers need both rule-based and machine learning-based personalization

30-second summary:

  • COVID-19 put increasing pressure on brands to operate at a higher level with fewer resources, including reduced budgets for paid media.
  • Data-driven engagement and personalization can bring about the necessary improvements in user engagement metrics to offset these inefficiencies.
  • Setting up new personalization tactics can seem complicated, but with a strategic approach it can be an easy way to increase pageviews on a budget.
  • Understanding how each customer purchases and meeting them where they are to create a totally unique and personalized experience will highlight a retailer’s website, lower media spend, lower bounce rates, and lower ecommerce sales increased.

With the dramatic end of 2020, brands are trying to cut costs whenever possible to tackle the tremendous operational difficulties of the past year. A recent report by Totem Media highlighted that 80% of traditional brick and mortar stores were losing out this year. As a result, retail paid media budgets have had a huge impact. However, there are ways to make the most of the reduced budget, including using personalization to lower bounce rates and improve other key ecommerce metrics.

Our recent research into our customer base shows that deep personalization can dramatically increase ROI. The study found that when viewing three pages, the conversion rate for consumers who saw personalized content on each of the three pages was 100% higher than for consumers who saw non-personalized content.

In addition, the shopping cart associated with the personalized buyer journey was 74% higher than that of the other person who saw the generic pages. This enhanced experience can mean the difference between becoming a customer or visiting a competitor’s website.

The above scenarios are already happening across retail. Current examples from retailers such as CVS and Nordstrom are using personalization to maximize their vacation effort.

For example, CVS Pharmacy recently discussed how it uses its customer data from its loyalty program to analyze individual baskets, amounts spent, shopping frequency and categories for each individual consumer.

In addition, Nordstrom uses the “wish list” function to better measure customer demand for popular items for the annual anniversary sale and to adapt it to customer demand in real time.

Getting started with personalization

Setting up new personalization tactics can seem complicated, but with a strategic approach it can be an easy way to increase pageviews on a budget. At the beginning of the process, the most successful e-retailers have some clear things in common:

  1. Goals for your personalization programs that are aligned with business goals and KPIs
  2. Roles and responsibilities to ensure the accountability of each team
  3. Priorities in terms of customer orientation and value drivers

The most common reason for a high bounce rate is unpredictability. The main reason someone leaves a website immediately upon arrival is because what they saw on the page was not what they expected or wanted to find. If consumers aren’t sure what to click once they’re on the page, they’re likely to ricochet too.

Buyers are looking for ease especially in the turbulent times we live in today and if the website doesn’t suit their needs they will move on. To make up for the confusion, there needs to be a relevant landing page for every search. The pages should contain a clear, concise (and ideally personalized) call to action that shows what the consumer should do next to take the desired action.

Each search result must efficiently guide the user to what he is looking for with an easily identifiable next click in each round in order to motivate users to take a clear action, purchase, connection or request for information.

For example, the luxury brand Saks Fifth Avenue recently relaunched its e-commerce website with new personalized elements that guide the consumer on their journey just like a sales rep would in a store.

The new additions include an Edit tab that shows an entire collection at once, so customers can scroll through without having to navigate to new pages. Saks also added a “Complete the Look” section that gives customers the ability to add related items directly to their cart without going back to search filters or department tabs.

This high degree of personalization during the entire customer journey can be achieved through a personalization engine. This software creates a unique profile for each visitor when they browse the website.

Once created, the user profile is refined and expanded through advanced artificial intelligence functions to inform the retailer about the customer’s shopping habits and buying patterns, as well as their tastes and interests.

The customer data can then be used to create a customized website each visit that is of greater interest to that particular customer and to create a more engaging experience for the shopper with each visit.

Additional benefits of personalization

The customer data can also help retailers customize their suggestions and respond to consumer preferences. Personalized recommendations can be derived from the user profile in order to identify the desired elements that they may not have seen during their visit to the e-commerce website.

Increasing the number of custom choices leads to a higher likelihood of conversion and ultimately, greater customer value over the lifetime.

Retailers Home Goods and TJ Maxx are known for having completely different warehouse choices depending on the local store. With AI-controlled personalization, they create a unique experience for each shopper based on what’s available in their local store.

This simplifies the user experience as the buyer knows they are not competing with people across the country for a particular item and gives them the option to safely collect the item from their nearby location if they so choose.

By personalizing the experience, Home Goods and TJ Maxx can create an online vibe that is similar to their loved one in-store experience.

Personalization in today’s changing environment

Today’s buyers are more demanding than ever. Since most purchases are made online for the first time, consumers are used to navigating the internet to find what they need. But that also means that every ecommerce website needs to stand out even more.

Understanding how each prospect shop and meeting them where you want them to create a completely unique and personalized experience will highlight a retailer’s website, reduce media spend, decrease bounce rates, and increase ecommerce sales.

Lisa is currently the CMO of Kibo and joined the company through the Monetate acquisition in 2019, where she was also CMO. Lisa was also the only C-level executive retained through the acquisition. She has led the development of many high-growth technology companies including Monetate, NewsCred, and AppNexus. She has grown the company’s revenue by building and leading diverse, agile teams of high performing marketers to meet the growing demands of global customer brands. Lisa regularly lectures at industry conferences on building corporate and customer brands, and organizational culture initiatives, including women in the workplace, and diversity and inclusion. She was the founder and co-chair of the AppNexus Women’s Network.

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