• Commerce, 
  • Personalization

5 Reasons You Need to Start E-commerce Personalization on Your Online Store

Esat Artug
Esat Artug
November 20, 2022 · 7 min read
5 Reasons You Need to Start E-commerce Personalization on Your Online Store

It's no secret that e-commerce personalization is a hot topic in today's digital age. With the growth of online shopping, competition has become incredibly fierce. With so much choice available on so many sites, it’s getting harder and harder to catch a customer’s eye and convert them into a customer. Moreover, as online shoppers become savvier, they expect a more personalized experience when browsing and buying items online.

Over the past years, personalization technologies have been emerging to help businesses improve their experience for their visitors to reflect "who they are," rather than generic content for everyone. With the rise of e-commerce and increasing competition, global retailers must understand how to capitalize on their customers by offering relevant product recommendations.

If you're not yet leveraging personalized recommendations and content on your online store, you're likely missing out on sales and engagement opportunities.

In this blog post, we'll outline five reasons why you need and how to start doing e-commerce personalization now.

What Is E-commerce Personalization?

E-commerce personalization is a process of continuous efforts to tailor and optimize the customer experience to deliver the right offers and specific product recommendations based on previous data via the right channels to the right person at the right time.

Although personalization is about tailoring the experience, some companies out there still think they're doing e-commerce personalization by adding a name in their emails, sending a birthday wish or other sorts of campaigns. Personalized e-commerce is much more than that. It is about:

  • Understanding the customers' behavior, needs, and expectations and creating customer segments based on these information.

  • Using customer information to give them what they want when they want it.

  • Creating personalized experiences across every interaction customers have with your brand, from the time they enter your site to after they make a purchase.

Why Is Personalization in E-commerce Important?

The importance of personalization has been a prevailing trend in e-commerce for years. Today, it's not enough to offer the same experience to all of your customers. People have higher expectations of online shopping experiences than ever before. According to the state of personalization report71% of consumers feel frustrated when a shopping experience is impersonal, while 60% of consumers say they will become repeat buyers after a personalized shopping experience with a retailer. In 2017, this number was 44%.

Personalized shopping experiences are no longer a nice‑to‑have. They're an expectation: an expected component of any digital customer experience.

Personalization can mean many different things and have different applications, but one thing is certain — personalized customer experiences drive:

  • higher customer satisfaction

  • advocacy

  • conversion rates

And these outcomes are what turn visitors into buyers.

Why You Need to Get Started with E-commerce Personalization

Personalization is an effective way to increase sales and encourage people to buy a product. Focusing on personalization in your e-commerce business can be beneficial for both businesses and customers. There are five major reasons why you should start doing e-commerce personalization today, and we're going to analyze them one by one here below.

1. Increased Engagement

In a world where customers can choose from an endless number of e-commerce options, personalization is more important than ever in creating customer engagement. According to recent research, 79% of consumers say they are only likely to engage with an offer from a brand if it has been personalized to reflect previous interactions the consumer has had with the brand.

E-commerce personalization means understanding your customer's needs, interests, wants, preferences, and pain points, so you can tailor your site and offers for them. If they can relate to what is being shown on the website, then that person may be more inclined to spend time at this online store and return again later on down the line.

2. Increase in Customer Loyalty

Growing and retaining a strong loyal customer base is the golden dream of e-commerce longevity. Personalization is the fuel for this longevity.

56% of online shoppers are more likely to return to a website that recommends personalized products. E-commerce personalization is the key to making your customers feel like you know exactly how they want to be treated. By showing them that their needs are important and valued, it increases chances for loyalty since people tend not only to appreciate but also reward brands that take notice of what makes each individual unique.

3. Higher Conversion Rates

According to research by Accenture, 91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them. Therefore, personalization is key to making sure your customers are shown exactly what they need before buying, which can help increase conversion rates.

This includes using tactics such as product recommendations when someone's about to check out so you showcase products that specific groups of people might be more likely to buy — increasing the probability of sales for items not popular with all shoppers.

4. Increase in Average Order Value

When it comes to e-commerce, personalizing the customer experience can significantly impact the average order value per customer. Recent studies have shown that when customers are offered a personalized shopping experience, they are more likely to buy products and spend more money on each purchase.

Personalization can reduce acquisition costs by as much as 50% and lift revenues by 5% to 15% by increasing the average order value. This makes sense, as personalization allows customers to feel like they are being heard and understood, which builds trust and leads to better results for businesses. In other words, shoppers are more likely to buy items when they feel like the site has considered their interests and needs.

5. Better Customer Experience

Brands who invest in personalization can expect a better customer experience because it helps them remember customers' preferences and direct customers exactly where to go from the first time you enter their store. That's why it's no surprise to see that 98% of marketers say personalization advances customer relationships.

Learning as much about your customers as you can and then using this knowledge to deliver a personalized e-commerce experience is one of the best ways to differentiate your business from competitors and build a better customer experience.

Where and How to Get Started with E-commerce Personalization Today

In the first wave of e-commerce, traditional one‑size‑fits‑all platforms from a single vendor were the solution. However, this is not the case anymore.

In today's environment, companies are rethinking their tech stack and moving away from standard commerce platforms to stay up with the speed of quickly changing customer behaviors and expectations.

No single vendor can provide all of the apps required to enable e-commerce experiences that satisfy today's consumers' expectations. For this reason, the composable commerce movement started.

Composable commerce enables companies to pick and construct the best commerce solutions, then compose them to meet their specific business requirements. Composable commerce adapts to today's and tomorrow's market dynamics by using new technologies and methodologies such as MACH and Jamstack.

In order to create best‑of‑breed e-commerce personalization at scale in your store, you can use a headless CMS, Commerce Layer, commercetools, Shopify Plus, Snip Cart, Crystallize as the commerce API, and Ninetailed as a personalization solution. With this composable and headless stack, you can have:

  • open ecosystem

  • modular architecture

  • business centricity

  • omnichannel commerce experience

The Bottom Line

Most marketers would say that personalization is a must in e-commerce because you simply cannot let your competitors beat you at this. They are doing personalization, integrating it into their conversion funnels, and driving more sales as a result. That is why we believe that sooner or later (probably sooner), your e-commerce store will also need to offer some level of personalization.

In addition, personalization is one of the key ingredients for boosting repeat purchases and increasing customer retention.

If you're still not certain if personalization is right for you, in this post, we tried to show you five reasons why you should start doing it today.

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