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6 Ecommerce Personalization Strategies to Maximize Conversions on a Smaller Budget

By Anh Vu-Lieberman, VP, Conversion Rate & Site Optimization at Nogin

As brands cut back on spending amidst inflation and recession concerns, today’s ecommerce environment is all about doing more with less. Or, in other words, optimizing ecommerce efforts to achieve the greatest impact and ROI.

And the best way to increase customer engagement and jumpstart ecommerce growth in a tough environment? Personalization with AI.

The mid-year retail season kicks off with Mother’s Day, the third largest retail holiday in the US, it’s critical for retailers to leverage personalization strategies to maximize the rush that will keep rolling through the holidays. Higher traffic during these retail seasons will set the foundation for repeat business, from Mother’s and Father’s Day to graduation, the arrival of the summer season and back to school, right through to the holiday season.

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To keep up with the upcoming retail rush, here are six personalization strategies ecommerce companies can leverage to drive conversions, efficiently and effectively.

1. Understand your market segments.

Understanding the different segments of your customers — such as men’s, women’s, kids, plus size and petite — is the first step to building a better ecommerce experience. When you know your customers, you can tailor the shopping experience according to their unique needs and preferences.

In fact, with hyper-segmentation, you can segment your customers even further to personalize the experience and messaging. For example, affinity-based hyper-segmentation allows ecommerce brands to move beyond new versus returning customers to personalize content blocks and product recommendations based on a customer’s past and current interests and behavior.

2. Implement hyper-targeted personalization.

By showing relevant content to users, such as custom messaging or tailored product recommendations, brands can drive higher conversion rates and encourage repeat business among happy customers. A few examples of how to deploy personalization on your website include:

i) Location-based personalization :

Show different products to customers in different locations, curating an experience that is relevant to where the customer lives, such as showcasing products that are popular in their city or products that are weather-appropriate. This can lead to up to a 47% higher clickthrough rate (CTR).

ii) Exit intent tactics and order- or browsing-based recommendations :

Using personalized exit intent and order- or browsing-based recommendations help encourage customers to complete their purchase, while encouraging repeat purchases. For example, tell customers how close they are to reaching the free shipping threshold, and show them a few recommended products to help them get there, based on their recent order or browsing history. Then, once they place an order, including additional recommendations on the order confirmation page, or order confirmation email can help encourage them to come back and buy more. Properly set up exit intent strategies can re-engage up to 33% of users who are willing to abandon the session.

iii) Affinity-based personalization :

Is a customer shopping for a particular style or size? Are they looking for men’s or women’s clothing, workwear or hoodies and joggers? Tailoring a customers’ experience on a website based on their preferences and behavior, from which products they see first, which promotional images they see, and what items are recommended to them, can make a huge impact on conversion rates. For example, we can tailor products to match the size the customer previously purchased or change this to the size they’re currently choosing. Showing the current behavior for size affinity has a 16% higher CVR than the size history because the user could have previously purchased the wrong size.

3. Leverage AI to automate personalization.

Managing customer personalization opportunities across an ecommerce website — and across the entire buying lifecycle — can be a huge headache for ecommerce brands. Luckily, with AI, it’s now possible to automate personalization. But, implementing AI is not a matter of “set it and forget it.” You have to know how to train and retrain your AI model to deliver the right results — which means it’s essential to have a deep understanding of your market segments, who they are and what they’re looking for, so your AI model can best serve their needs. What was relevant a year ago may not be as relevant today if the product assortment has changed or if the consumer base has changed.

4. Deploy FOMO messaging.

Create a sense of urgency by using messages such as “only a few left” or countdown timers to encourage customers to make a purchase. There is opportunity for personalization here as well — which of your customers respond best to which FOMO messages? For example, male shoppers may be more impacted by low-stock messages, while female shoppers may care more about how many shoppers are currently viewing an item. Showing personalized messages can increase the CVR by 17.3%.

5. Guide customers through the buying process.

Customers want to be guided throughout the buying process, not forced to take certain actions. For example, if a website takes them straight to checkout after adding an item to cart, that can lead to customer abrasion and abandoned shopping carts. Instead, to encourage conversion, ecommerce brands should leverage a combination of product curation and cross-selling or upselling. This can include offering products that are connected together as a bundle, such as allowing customers to “shop the look,” or recommending other similar products that a customer may also be interested in purchasing based on their behavior and shopping history. There is an art to finding the balance of showing too many elements and too little elements. Sometimes, showing fewer elements on a page will improve the CVR by up to 9.75%. Meanwhile, showing relevant bundles can increase the CVR by up to 138%.

6. Test continually.

It’s vital to continually test different personalization strategies to determine what works best for different segments of customers, improving the user experience as well as conversion rates. Customer behavior is never static — and neither is technology. For example, with the recent rise of remote work, there’s been a shift away from shopping on mobile devices back to shopping on desktops. Which means brands today need to be looking for ways to optimize and personalize the desktop shopping experience. A simple change of showing the number of products per row can mean a difference of up to a 26% higher CVR.

Personalization is now a must-have for global brands, extending across all aspects of digital marketing, including email campaigns, social media and website experience.

To succeed in today’s oversaturated and highly competitive ecommerce environment, brands need to understand and hyper-segment their customers to deliver superior shopping experiences, marrying paid and organic channels to on-page experiences to drive purchases (and repeat purchases). As the ecommerce space continues to evolve, only the brands that continue to implement smart, AI-driven personalization strategies will win — adapting as the market changes and delivering customers the experiences they truly want.

Read More: How AI Disrupts Online Customer Experiences – For Better or For Worse

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