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Understanding the importance of personalization in online retail

Consumers know there is fierce competition for their dollars, so why shouldn’t brands and retailers cater to their preferences and needs?
Marketers are taking more and more initiative to set the bar higher with personalized recommendations that drive higher basket sizes. 

Personalization in online retail has emerged as a widely-used strategy for carving out your niche in the saturated market, as well as attracting and retaining customers. Given all the technologies and CRM software available to marketers today, it is easier than ever for companies to begin incorporating this technique into their marketing strategies.

Why Personalization in Online Retail and ECommerce Matters 

In 2020, retailers have been working to achieve a seamless omnichannel shopping experience that works just as well online as offline. 

During the global pandemic, 28% of online shoppers made their first online grocery order. Year over year, every category has seen an uptick in online orders—20% for apparel, 45% for sports/outdoor, 82% for luxury goods, 112% for beauty, and 142% for pharmacy. Analysts have seen an increased interest in branded events and email subscriptions during this time as well, revealing the desire many consumers have to connect with known and trusted brands amid so many other uncertainties. 

As more and more consumers acclimate to the convenience of online shopping, brands and retailers are presented with new opportunities to appeal to these audiences in new, highly personalized ways. The brands that can reach out effectively will be the ones reaping the rewards of online and offline loyalty in the years that follow.

Personalization Involves Building Brand Value

Not having a website, blog, and social media page is likened to not having a birth certificate. How can customers form a long-term relationship with a company that doesn’t have a presence? The average American spends about four hours per month shopping in physical stores. That’s less than the amount of time a person spends on a digital device each day. An avid online shopper can spend as much as 44 hours and 35 minutes engaging with brands she or he likes, so building a substantial online presence is critical to connecting with today’s consumers. Naturally, the opportunity to tailor messages and offers to each individual shopper is more abundant online, and they yield the best results

  • 80% of consumers say they’re more likely to buy from a company using personalization.
  • 79% of customers say they’ll only interact with an ad that reflects previous interactions.
  • 77% of people have chosen, recommended, or paid more for a brand that personalizes. 
  • 63% of shoppers say they’re annoyed by generic, repetitive advertisements.

Online retail presence is an important opportunity to build brand reputation and value. A personalized approach conveys the message that a company understands, values, and wants to help the consumer. These are the building blocks of loyalty, which increases revenue at a lower cost per customer. 

Personalized Content Is Already Being Adopted By Top Retailers

Brands that want to compete with the industry’s top competitors have little choice other than to invest in content creation with a personalized approach. 89% of companies are investing in personalized content development, including leading companies like Nike, Netflix, Coca-Cola, Starbucks, and Sephora. Personalized content speaks to buyer persona pain points, lifestyle preferences, and goals. It’s informative, helpful, reinforcing, and inspiring.

Consider further evidence:

  • Personalized content facilitates repeat purchases in almost 44% of customers. 
  • 87% of consumers view brands delivering personally relevant content positively.
  • 72% of consumers say they only engage with content personalized to suit them.
  • On average, lack of personalization generates 83% lower campaign response rates.

Personalization Increases the Effectiveness of Email Marketing Campaigns

Email marketing is a core component of most modern marketing strategies. Even if the typical open-rate hovers just over 20%, the potential to reach a great abundance of people in a relatively simple way is hard to resist. There are also many opportunities to personalize the content. Simply by sending an email from an employee’s name (rather than the company name or general email address), a marketer can increase the open rate by as much as 35%! Adding the recipient’s name to the subject line boosts open rates by up to 20%, as long as the pitch is fairly compelling.

Also consider these salient points:

  • Personalized emails deliver 6x higher transaction rates.
  • When an email is not personalized, 52% of people say they’d choose a different brand.
  • Segmented, targeted, and personalized emails generate 58% of all revenue on average.
  • Companies using personalized email messaging gain 17% more revenue through their campaigns.

If your marketing strategy utilizes email marketing, it’s worth following these personalization best practices.

Personalized Recommendations and Ads Continue to Generate Significant Revenue

Selling online is all about connecting the right person with the right product at the right time. With dozens of tools aimed at extrapolating website user data across platforms, there is no reason to send out generic blanketed messages to the masses anymore, especially considering these statistics: 

Best practices for personalized advertising and product recommendations include: 

  • Displaying a “recommended for you” list based on past purchase history. 
  • Using “frequently bought together” lists to increase purchase order size. 
  • Integrating product recommendations into marketing emails. 
  • Providing access to browsing and purchasing history. 
  • Showing products that are “related to items viewed.”
  • Alerting shoppers of items that have changed in price or recently became available.
  • Generating product bundles based on items commonly purchased together. 
  • Showcasing “best sellers” across categories. 
  • Highlighting highly rated or reviewed items. 
  • Recommending accessories when items are added to the cart. 
  • Sending email reminders about recently browsed products paired with a free shipping offer.
  • Retargeting users with social media ads of items they’ve browsed or added to their cart, but not purchased.

Personalization Boosts Brand Affinity and Long-Term Loyalty

Smartphones play a vital role in the lives of American consumers, tying together many online and offline experiences. They are the most commonly used device for online shopping now, with 4 in 5 consumers purchasing a product on their smartphones within the past year. 

Nearly half of consumers say they use their smartphones “all the time” to buy items they want or need online. Most shoppers use their mobile devices prior to visiting a store when planning where to go and what to buy, as well as within the store to compare multiple brands, read reviews, take a photo for future reference, or look for a discount offer. 

personalization in online retail Consider a handful of compiled mobile research and statistics:

  • 35% of mobile users desire more personalized apps and websites.
  • 48% of customers are happy sharing purchase data for personalized mobile offers.
  • Personalized mobile apps deliver 43% more conversions and 44% increased loyalty. 
  • 66% of shoppers are frustrated when online and app shopping carts aren’t connected.

Mobile best practices include: 

  • Tying SMS text offers and product recommendations to specific customer behaviors. 
  • Offering geolocation features like store maps, aisle locators, and the ability to check store inventory in real-time. 
  • Maintaining consistent customer profiles across devices to link shopping carts, wish lists, and reward program data. 
  • Partnering with popular mobile shopping apps like Shopkick to extend reach and ramp up mobile personalization efforts.

Ways Businesses Are Personalizing the Online Retail Experience

The most basic points of personalization to consider include:

  • Device Type: Whether a person is engaging via desktop, tablet, or mobile device.
  • Time of Day: The specific hour people are most likely to open or click in their time zone.
  • Referral Source: Whether the consumer arrived by an ad, article, website, or video click. 
  • Behavior: Information collected from viewed products and categories, abandoned carts, and other visited sites.
  • History: Data pulled from past purchases, loyalty program memberships, social likes, and email clicks.

Beyond this, audiences can be further segmented based on factors like age, gender, education, profession, geographic location, pain points, needs, preferences, and personal values. Companies can go one step further to anticipate future needs based on past interactions.

Personalization need not be overly complex to produce results, especially when you partner with a leading omnichannel marketing app like Shopkick. This mobile shopping platform fuels personalization in online retail and in-store retail through many effective means. 

Shopkickers have many opportunities to engage with partnering retailers and brands to earn reward points (“kicks”) that can be used toward a wide selection of gift cards. They can earn kicks by watching videos, viewing curated lookbooks, and making online purchases, just to name a few. Thanks to beacon technology, Shopkickers receive personalized greetings in-store and enjoy a unique gamified shopping experience offline as well to earn even more kicks. Shopkickers not only make unplanned purchases and spend more than the average consumer, but their purchase intent increases along with brand affinity after they’ve enjoyed a pleasant, personalized shopping experience with our partnering retailers and brands.

Shopkick makes it easy for partners to incorporate personalization into their online retail strategy. Read our success stories or contact us to learn how you can successfully tap into a new audience and expand your reach through personalization. 

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Image courtesy of SFIO CRACHO