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The Trend of Personalization in E-commerce
Personalization in e-commerce is the practice of tailoring the shopping experience to each individual customer. This can be done in a variety of ways, such as recommending products based on the customer’s purchase, browsing behavior, and demographics. Moreover, personalization in e-commerce is a growing trend, as businesses increasingly recognize the benefits of providing a personalized experience for their customers. In addition, a recent study by McKinsey & Company found that 73% of consumers say they appreciate personalization, and 64% say that it makes them more likely to shop at a particular brand.
This has been reinforced by numerous studies:
- 93% of consumers want brands to know their preferences and needs. (SaleCycle)
- 80% of consumers are more likely to do business with a brand that offers personalized experiences. (McKinsey & Company)
- Personalized email campaigns can result in a 26% increase in open rates and a 53% increase in click-through rates. (Experian)
Personalization in E-commerce: Benefits
- Increased sales: Personalized product recommendations can help customers find the products they are most likely to be interested in, which can lead to increased sales.
- Improved customer satisfaction: Personalized experiences make customers feel valued and appreciated, which can lead to improved customer satisfaction.
- Increased customer loyalty: Personalized experiences can encourage customers to return to a particular brand, leading to increased customer loyalty.
- Reduced customer churn: Personalized experiences can help to reduce customer churn, as customers are more likely to continue doing business with a brand that they feel understands them.
- Reduced returned items: When a brand/e-commerce store personalizes the experience it creates higher satisfaction and lowers the chances that the Item will be returned
Personalization in E-commerce: Best Tools
There are a number of tools available to help businesses personalize the e-commerce experience for their customers. Some of the best tools include:
- Customer data platforms (CDPs): CDPs collect and unify customer data from a variety of sources, such as website analytics, CRM systems, and social media. Most importantly, this data can and is used to create customer profiles that is used to personalize the shopping experience. However, It is crucial to take into account privacy regulation constraints.
- Predictive analytics tools: Predictive analytics tools use data to predict customer behavior, such as which products a customer is most likely to purchase or when a customer is most likely to churn. This information can then be used to personalize product recommendations and marketing campaigns.
- Recommendation engines: They use data to recommend products to customers based on their behavior and preferences. Personalized product recommendations can lead to a 20% increase in sales. (Epsilon)
- Artificial intelligence (AI) tools: AI tools can be used to automate many tasks related to personalization, such as image recognition, natural language processing, and sentiment analysis.
Personalization in E-commerce: Examples
There are many examples of brands that are using personalization to improve the e-commerce experience for their customers. Some of the best examples include:
- Amazon: Amazon uses personalization to recommend products to customers based on their purchase history, browsing behavior, and demographic information.
- Apricoat: Utilizes Selectika’s Find My Size product. Subsequently, the shoppers are empowered with certainty that they can discover the correct size per item.
- Nautica: Nautica uses the Shop Similar and a Complete-The-Look feature by Selectika. Personalized product recommendation.
- Story: Story uses personalization to recommend products based on visual AI including similar items and complementary items.
Personalization is a powerful tool that can help e-commerce businesses improve sales, customer satisfaction, and customer loyalty. Moreover using the right tools and data, businesses can create personalized experiences that will resonate with their customers and drive business results.
I hope this article was helpful. Please let me know if you have any questions.