Personalisation a non-negotiable business strategy — SwiftERM
Personalisation a non-negotiable business strategy. In today’s digital-first world 1:1 personalisation is, without a doubt, a non-negotiable business strategy. It has proved to be a powerful tool to improve conversions, build brand perception, and boost revenue.
- 80% of shoppers are more likely to buy from a brand that provides personalised experiences. — Epsilon
- 89% of digital businesses are investing in personalisation. — Forrester
- 80% of companies experienced a revenue uplift since implementing personalisation. — Econsultancy
In a time when online shoppers are spoiled for choice, brands that are not tailoring experiences face the risk of losing their relevance. But there’s a catch. Too much personalisation can come across as invasive to shoppers, create an echo chamber, and result in low conversion rates. So, how much is too much? The simple answer is — there is no silver bullet. You’d need to experiment and find what works for your business and markets. Then let’s look at an example to understand this better.
Miinto, a leading European online fashion marketplace with 800,000 products, uses personalisation software to deliver hyper-personalised experiences across the commerce lifecycle and across the touchpoints of recommendations, content, search, and browse.
In a recent conversation, they shared the results of their tests. The company carried out a series of A/B tests for one of their markets — gradually increasing the personalisation level of the product assortment on category pages — and monitored the impact on:
- Revenue Per Visit (RPV)
- Conversion Rate (CR)
- Average Order Value (AOV)
In the first test, they increased the personalisation from 25% to 50%. This led to a 5% uplift in RPV, which was quite significant. Since there was an improvement in all KPIs, they were curious to see how far they could go.
Subsequently, they increased the level to 60%, 65%, and finally 70%. They found that at 70%, there was a sudden decline in all KPIs. This is perhaps the point where personalisation became more creepy than helpful to shoppers.
65% was the sweet spot, where they got the highest uplift in RPV at 11%. See the figure below. From these results, we can infer that while personalisation is crucial, there is a fine line between being relevant and invasive.
More businesses need to embrace an experimentation culture and find the personalization level that works best for their customers. After all, every vertical and market is different. Further, it is important to remember that for a shopper, relevance is certainly important, but so is the joy of discovering new products and categories. Therefore, businesses must ensure the right blend of enabling hyper-personalization and allowing for discovery and exploration.
In the digital-first era, it is imperative to possess the technological capability that allows for rapid personalisation tests — an area where many retailers are still lagging. Brands also need to move beyond segmentation and treat each customer as an individual. The solution to this is to build real-time, individual shopper profiles and drive the optimum level of personalisation for not only product recommendations, but also search, browse, content, and promotions. This is the key to growing and retaining your customer base, and accelerating growth in the intensely competitive eCommerce industry.
It’s widely appreciated that personalising pages on your ecommerce site encourage a great deal more custom, loyalty, and AOV as an immediate benefit, but then for some strange reason many companies then leave it at that. What is less appreciated is that stopping there is the same as sitting on a park bench, as long as you sit there someone is bound to happen by at some point. This translates into waiting for customers to come to you. Why, that went out with the ark?
It is important to appreciate many retailers get duped into believing segmentation is personalisation. Because lumping a load of people in a category together does not work. It is not personal, it is just a smaller group of diverse tastes and interests. Only when you segment down to 1:1 does it become personal. See article: Segmenting is marketing marginalisation.
The solution is predictive personalisation software (PPS). We offer one such example, which use data captured from each individual consumer as they visit your site, including what they look at, return to most often, etc. It then incorporates this into an algorithm of both that individual’s buying history and their perpetual purchases. It then ranks every SKU on your site, by the greatest likelihood of imminent purchase. So instead of tackling the uphill battle of convincing that person to buy a specific product, (this season’s stock for example) that they might never have seen before, and therefore in the main resent the hard-sell, it uses a predictive analytics algorithm to work out what you have achieved already, and simply capitalise on it. i.e. show the the products they have already began to look at, and aligns with their previous purchase symbiotically.
Both Statista and McKinsey readily verify that this type of personalisation far and away out-performs static page personalisation on your site, and literally obliterates the generic email marketing that every ecommerce merchants employs. We are not suggesting you stop email marketing, merely present the evidence so you are aware of what additional facilities you should be adopting to capitalise by adding to your marketing mix, to keep performing at the the highest levels. It sends unique personalised emails of individual product selected products to each of your consumers. Often it negates product price or indeed alternate supplier comparison. What’s more it goes significantly further out-performing, triggered personalisation, omni-channel marketing and promotional email marketing combined. Thereby delivering the highest possible ROI in ecommerce today.
Originally published at https://www.swifterm.com on July 3, 2022.
