Your introduction to hyper-personalization in ecommerce
25 Aug 2021
4 min read
We've long known that personalization matters. Accenture, for example, found that “91% of consumers are more likely to shop from brands that recognize, remember, and provide them with relevant offers and recommendations”. But as more businesses meet these expectations through their ecommerce platforms, traditional personalization methods stop getting the traction they used to. That's why hyper-personalization has entered the conversation for ambitious ecommerce businesses.
What is hyper-personalization?
Hyper-personalization uses advanced technologies such as AI, data analytics and automation to tailor products, services and experiences to customer behaviour in real time, or to target them in a more granular fashion. It’s the most effective way to scale one-on-one content customization, turning every digital interaction into a highly relevant experience that helps the customer on their buying journey.
If this sounds like personalization, it is, but taken a step further.
Personalization versus hyper-personalization
Traditional personalization within ecommerce uses personal information such as name, email, location and basic purchase history for email marketing and customer relationship management (CRM). It’s great intel, but its use is not just increasingly common but also essentially reactive, which limits its appeal and can sometimes make messages out of date.
Hyper-personalization, on the other hand, uses more advanced analysis of activity (or of more types of activity), and tracks real-time data such as browsing behaviour (for example, how long a shopper spends looking at specific items or parts of the site), onsite searches, form submissions and more – all used to derive insight into current customer intent and characteristics. This then allows highly contextualised messages to be sent to them, such as an ad for shoes showing designs similar to those they were browsing for a long time the previous week without buying.
Why does hyper-personalization matter?
People have a whole world full of ecommerce offerings to choose from, so of course they're going to respond to the brands that show the clearest understanding of who they are and what they want and need. Hyper-personalization matters because it's a competitive world out there and this is one way to stand out.
Imagine a shopper looking for a backpack, where what matters to them is its price, size, number of compartments and colour. If one brand picks this up from their search and browsing behaviour and makes the right kind of recommendations and offers, while another responds with recommendations and offers that focus on backpack price, weight and durability, there's little doubt which is going to close the deal.
Naturally there's a huge variety of ways to step up from basic personalization, some of which are less complex than others. Whatever you can do to get more granular – for example, to infer language and culture from someone's location, or remember what they were doing the last time they visited your site – it all makes a difference. It makes visitors feel 'seen' and reduces their effort to find what they want, both of which are likely to improve engagement, satisfaction and loyalty as well as increasing conversion.
How to get started with hyper-personalization in ecommerce
Hyper-personalization is fundamentally technology-enabled, so the first step is to determine the technologies that suit your brand and its goals (you could start by considering what's working for others in your industry). Here are some of the options to choose from:
- Harness the power of customer data. The more data you can gather, the better you can understand the intent of your audience – as long as you use the right level of analytics to build a 360-degree view of your customers. While adhering to data-privacy best practices, use website cookies, opt-in forms and social and advertising platforms, among other digital tools that capture customer behaviour and preferences. Add in-store sensors if relevant to bridge the physical/digital divide, and bring all the appropriate data together in a single CRM system for granular audience segmentation in real time – for example, by promoting a product worth $200 to a customer who usually spends $100-$250 on that type of product and has recently been searching and browsing for one.
- Turn data into recommendations. Ecommerce recommendation engines allow you to predict what an individual customer may like or want to do, usually based on data from your whole customer base together with the activity of the individual. They drive the display of relevant recommended products through formats such as ‘frequently bought together’, ‘you may also like’ and ‘customers also viewed’.
- Consider the role of AI in ecommerce. Recommendation engines are an important focus of the use of AI in ecommerce today, but there are other uses of AI that can also feed into hyper-personalization. Chatbot interactions, for example, can be the source of data about customer needs and preferences, which you can extract to improve your understanding of how to appeal to them as individuals. Another example is the use of AI within an augmented or virtual reality application, which can create very powerful interactive personalized experiences. There's little doubt that AI is fast becoming a must-have for ecommerce solutions.
- Build marketing automation. Businesses with marketing automation technology can trigger hyper-personalized email marketing campaigns across multiple channels, based on customer purchase behaviour and preferences. Combining this with a loyalty programme is a win-win, creating a virtuous circle of customer engagement through relevant offers and insight gained on customer needs and habits.
- Enable omnichannel support. Different customers will interact with your brand via different channels such as social media, your website, third-party sites, and physical locations if you have them. All these channels need to work in harmony so that you build a complete picture of each customer’s journey and give them a coherent experience, making them feel recognized as the individual they are.
- Create a strong, interactive design experience. Users want an uncomplicated, engaging experience. Make sure your platform has easy navigation, dynamic calls to action and personalized home pages for each visitor.
- Offer subscription-based services. It's not just the big entertainment players such as Netflix and Spotify that are frontrunners in the subscription space. You can see it in other sectors such as food, beauty and healthcare. For example, Care/of, a US pharmaceutical brand, sends monthly personalized boxes of vitamins and supplements to its customers based on their needs. They ask a series of questions about lifestyle and goals, then curate the box specifically for the user. Just like a loyalty programme it's a win-win, with customers getting exactly what they need and the brand getting continual customer insights.
If you recognize how essential hyper-personalization is for creating a better customer experience and enhancing the value of your brand, explore our 'Essential guide to going global with ecommerce' and learn what it takes to build an ecommerce solution that can support these approaches to hyper-personalization.
Sachin Dawkhar
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