The beginner’s guide to ecommerce personalization

As competition grows fiercer and customers become more sophisticated, ecommerce brands need an advantage that sets them apart and drives business growth. Ecommerce personalization is the perfect tool for online businesses interested in getting a leg up on their competitors while tailoring the user experience with uniquely targeted dynamic content that increases engagement and sales.

Business leaders are looking for new ways to improve their websites and drive business growth. Many have heard of ecommerce personalization, but they’re not experts and want to learn more.

After reading this article, you’ll understand ecommerce personalization better and be well positioned to explore new business opportunities through it.

• What is ecommerce personalization?
• Why is personalization important?
• Benefits of ecommerce personalization
• Effective ecommerce personalization strategies and examples
• Get started with ecommerce personalization

What is ecommerce personalization?

Ecommerce personalization is a strategy that involves using customer data to target audience members with dynamic marketing content. A personalization strategy uses various data points, including:

• Demographics
• Intent
• Browsing history
• Preferences
• Purchase history
• Device type (i.e., mobile or laptop)

Software that facilitates personalization in ecommerce will use these and other customer data attributes to deliver tailored content. By tailoring content based on customer data, brands can maximize their marketing efforts. Customers presented with timely, relevant content are more likely to make purchases and enjoy their interactions with a brand.

By strengthening their web presence through personalization, online businesses can improve customer satisfaction as well as conversion rates. According to McKinsey research, personalization raises customer satisfaction rates by 20%, boosts conversion rates by 10–15%, and increases employee engagement by as much as 30%.

Why is personalization important?

Personalization is vital to the success of ecommerce businesses for many reasons — the most obvious one being that consumers expect it. According to recent Epsilon research, approximately 80% of survey participants said they are more likely to purchase a company’s products if it provides personalized experiences.

Businesses can increase their conversion rates by simply incorporating personalization into their marketing strategies. Even a slight increase in conversion rates could translate to significant profit growth.

Tailored customer experiences also lead to greater levels of customer loyalty and a surge in repeat purchases. Ecommerce businesses should strive to optimize recurring purchases, as retaining existing customers is far more cost effective than acquiring new ones.

With ecommerce personalization, retailers can acquire more customers, keep existing ones around longer, encourage repeat orders, and drive up average ticket size. All together, these benefits will move businesses closer to their growth goals.

Benefits of ecommerce personalization

Businesses that work proactively to create personalized experiences for their target audiences can unlock benefits that include the following:

Higher conversion rates

Every prospective customer has a different set of products in mind when visiting an ecommerce website. While it’s impossible to predict precisely what each customer wants to buy, retailers can draw some fairly accurate conclusions by tapping into user data, such as purchase, history, browsing history, and demographic information.

Using this data gives retailers the opportunity to precisely target each user with relevant products and services, which drives up conversion rates.

Businesses can also use ecommerce personalization to offer related products during checkout. This can encourage consumers to add extra items to their cart and make a larger total purchase.

Improved customer experiences

Personalization can remove potential points of friction from the purchasing journey. Businesses are able to target customers with tailored content that directs them to the specific product or product category that is most relevant to them.

By tapping into the power of a personalization strategy and adding convenience-oriented features, such as saving payment information or sending customers news about promotions, retailers can further optimize the purchasing experience.

Increased customer loyalty

Personalization can do wonders for customer loyalty. When members of a company’s target audience know that the business is mindful of their preferences, consumers are more likely to continue using that business.

Enhancing customer loyalty is critical to a brand’s long-term success. By proactively working to cultivate a loyal customer base, businesses can decrease acquisition costs, increase average customer lifetime value, and generate more revenue. Ultimately, this helps organizations move toward growth goals while serving their customers.

Competitive advantage

As part of their growth initiatives, ecommerce retailers are always searching for ways to increase market share. Personalization presents a perfect opportunity to accomplish this, especially if an organization’s competitors have not yet tapped into the power of this effective marketing tactic.

With ecommerce personalization, retailers can gain a distinct edge within their market. They can set themselves apart from other retailers, make their website more appealing to consumers, and win the hearts and minds of prospective customers.

Effective ecommerce personalization strategies and examples

With the right data and tools, the following ecommerce personalization strategies can help businesses realize the benefits outlined above.

Dynamic product recommendations

As the name suggests, dynamic product recommendations are specific product recommendations based on an assessment of an individual’s history. These suggestions leverage information about a user’s previously browsed or purchased items.

The most effective dynamic product recommendations serve up cross-department suggestions. For instance, say that a customer is shopping for pants. A retailer could target the consumer with ads for shoes that are stylistically similar to the pants they were browsing.

Another example of dynamic product recommendations would be analyzing the user’s past browsing history and encouraging them to pick up where they left off, possibly by showing them the items they previously looked at and gently nudging them to continue their search. This tactic is effective at increasing sales, often by reminding shoppers about their abandoned shopping carts.

As the user browses additional items on a retailer’s platform, the ads will become more customized by applying the user’s most recent data. This feature of ecommerce personalization tools ensures the consumer is always presented with content that’s relevant to them at that moment in their purchasing journey.

Personalized discounts

Retailers can also use personalization to target consumers with specialized discounts based on their recent behavior. One common approach involves offering new users a discount on their first purchase. Some retailers include a discount contingency plan that requires the user to meet a minimum spending threshold. For example, a retailer may offer 10% off a user’s first purchase, provided they spend $100 or more.

Ecommerce retailers can also offer discounts to customers who have recently viewed items or added them to their cart but neglected to make a purchase. This approach is effective at reducing cart abandonment rates and driving up sales.

The retailer may choose to offer these discounts on the specific items the consumer had previously considered, but many ecommerce brands combine the tactic with dynamic recommendations. By using this approach, retailers can offer discounts on related products and capture interest by presenting value in combination with more options, resulting in a personalized, consumer-first experience.

Dynamic content blocks

With ecommerce personalization, retailers can serve dynamic content to users based on several factors, including the type of device they are using, the language settings of their browser, and their location.

For example, when accessing an ecommerce page via a mobile device, calls to action should read “Tap here," as this best describes the action the user would take. Conversely, the same website would have a CTA that reads “Click here” when displaying content to desktop users.

Additionally, dynamic content blocks can include applicable shipping data based on a person’s location, using this information to:

• Determine shipping rates
• Verify shipping eligibility
• Confirm that same-day delivery is available

As a result, customers no longer need to progress to the checkout page to discern this information. Instead, they can view it at a glance as they shop. Having access to that shipping data upfront can encourage them to make a purchase. It can also sway a consumer’s decision if they are torn between two or more products.

Behavioral targeting

Behavioral targeting is a particular type of ecommerce personalization that utilizes behavior-based triggers. One of the most common triggers is lingering time on a website. If a prospective consumer spends an extended period of time on a website — say, three minutes — they are considered highly interested in the content on the page they are viewing.

To capitalize on this interest, ecommerce sites can target users with pop-ups that encourage the user to make a purchase, offer them a discount on the product they are viewing, or show them related items.

Sites can also use pop-ups to target consumers that are trying to exit a page before making a purchase. As with time-based pop-ups, these ads can incentivize users to complete the purchase by offering them a discount or free shipping.

The best pop-ups that regularly convert will include:

• A clear call to action
• A brief, straightforward message
• An easy-to-see CTA button

When using behavioral targeting tactics, ecommerce businesses should ensure these three elements are present. They should also include vibrant product imaging relevant to the pop-up content.

Get started with ecommerce personalization

Personalization is a highly effective way of improving your positioning in the competitive world of ecommerce by providing customers with tailored user experiences. Modern consumers not only prefer a customized experience — they are more likely to remain loyal to your brand and make more purchases if they feel their experience is personalized to them.

Incorporating ecommerce personalization into your marketing strategy can increase sales, retain more customers, and drive business growth.

To get started, you need a solution that can help your business integrate ecommerce personalization tactics seamlessly. Adobe Commerce is the world’s leading digital commerce solution for merchants and brands. With Adobe Commerce, ecommerce brands can grow their digital presence and build engaging shopping experiences for every type of customer.

Learn more by downloading this guide on the future of ecommerce or watching a webinar that teaches you how to exceed ecommerce customer expectations.