According to an August 2013 Retail Touch Points article, 78 percent of consumers would buy from a retailer more frequently if they received personalized offers—and 71 percent don’t believe retailers are effectively providing these offers.
Although more than 50 percent of online retailers agree that personalization is fundamental to their online strategy, personalization tactics are often implemented without an established personalization strategy.
What Drives Your Business
There is no blueprint for personalization strategy. It largely depends on your business’s mix of products and customer behavior. For example, zip code demographics may be highly useful to a travel site, where certain zip codes are more likely to book business versus family travel or high ticket versus budget getaways, or have residents requiring “sun getaways” in the winter. Another site might find zip codes less useful.
The ability to mine your own data for insights primes you for “knowing thy customer.” Involve your data scientists as much as possible in your strategic planning.
The Size of Your Catalog
The larger the catalog, the more satisfying a personalized experience is. A large catalog reduces the effort required to find relevant products and content. A niche online retailer that sells a tight range of products may be able to satisfy personalization with a less complex merchandising and recommendation strategy.
The Diversity of Your Customers
Do you sell internationally? Do you cater to a mix of male and female, age groups, business and consumer, etc.? What customer personas or segments would make effective personalization targets? Which segments do you wish to prioritize?
What You Know about Your Customers
Take inventory of the data sources you can use and apply to customer segments. This may include, but is not limited to
- Account profile data
- Loyalty program data
- Demographics, zip code
- Geolocation, time zone
- Device context
- New versus returning visitor
- Customer/noncustomer
- Referral sources such as websites, affiliates, marketing campaigns, social networks, and competitor sites
- Keyword referral data (when possible)
- Session-based clickstream data
- Site search input
- Past search, browse, and purchase history
- “Wisdom of the crowds”—people who take similar journeys tend to do X, Y, or Z, and real-time analytics
- Email program segments
- Recent site or cart abandonment
- Cart contents
- Purchase history
- Third-party and cross-channel data sources
Ultimately, as an online retailer, you want to recommend the most relevant products and offers. For each insight you can glean about a visitor, ask yourself, “how does this matter?”
One approach is to start with specific content on your site, such as the homepage banner. For example, a telecom site may serve different banners depending on whether a visitor is an existing customer or likely with a competitor.
Example A:
