Personalization in a nutshell
Personalization, or customization, is:
- a way for vendors to improve the quality of service provided to customers,
- A method of building customer relationships.
Imagine this scene: you walk into your favorite bakery. Upon seeing you, the saleswoman immediately packs a pudding doughnut in her bag. You smile because it’s your favorite. This is a simple example of successful personalization and the relationship established between you.
Although devoid of a certain emotionality, personalization also works in e-commerce. By analyzing data, including a customer’s purchase history or behavior on the site, online store owners are able to:
- recommend products,
- suggest interesting promotions,
- inform about interesting offers in newsletters.
What does hyperpersonalization affect?
In order for it to make sense, hyperpersonalization must bring benefits beyond the techniques currently in use. Implementing this technique can have a positive impact on many aspects relevant to the customer and the seller.
Increased conversion and sales
Hyperpersonalization in the context of sales gives almost unlimited room for maneuver. Upselling and cross-selling of products the customer is already looking for, recommendations tailored not only to favorite product categories, but also to the date, time of day and even the weather, and finally personalized discounts. All of these solutions, if applied in the right way, will result in higher conversions and impact sales.
Customer satisfaction will increase
Solutions that provide customers with closely tailored recommendations will bring a change in feedback and overall satisfaction. Instead of wading through dozens of unnecessary products, visitors will receive only those offers that are within their circle of interest. No more dozens of unnecessary toilet ads that still appear weeks after the toilet is purchased!
Fewer abandoned shopping carts
The right hyper-personalization will recommend a cheaper alternative. It will notice if a customer intends to abandon a shopping cart that contains more expensive products than the ones he usually buys. Combined with data from the loyalty program, the solution will be able to grant a personalized discount on products in the unfulfilled shopping cart.
Match-based marketing is not just about recommendations
Tailored product recommendations. Personalized communications. We are already using this today, but to a limited extent. Thanks to hyperpersonalization:
- Recommendations will be more effective. We will base them on much more detailed data, including browsing history.
- No dry promotional messages. Instead, your store will be able to send personally oriented messages. Thus, you will refer to previous purchases, add hints about the customer’s location.
- Predictive search (predictive search). This is a technique that will save customers time and allow them to find the products they are interested in at a glance. Location-based predictions will come in handy, for example, for store owners with physical outlets.
- Product delivery will be even faster and more tailored. With the data you have, your store will offer delivery at times that suit the customer. It can also offer a different pickup point depending on the buyer’s preferences and location.
Hyper-personalization in e-commerce – data and AI
The prefix “hyper” suggests that we are dealing with personalization, but at a much higher level. That’s right, because hyperpersonalization is about more than recommending products in the same category. Putting a customer’s name in the header of the newsletter you send out each month is also just an introduction. Hyperpersonalization designs the customer’s experience of interacting with the store based on detailed data, sourced from various sources.
The more detail the data contains for e-commerce personalization systems, the better the end result. It’s not just demographic or location data that matters. We also take into account:
- behavior on the store’s website (both past and present, processed in real time),
- social media activity,
- browsing history.
Hyperpersonalization involves building a personal algorithm for each customer. An algorithm that continuously analyzes the customer’s movements and creates a unique user experience based on them. Visions of the future even say that hyperpersonalized AI could design a separate store for each customer, with the things that are important to them in the foreground.
A vision for the future
Imagine a store where the homepage (and more) looks exactly to meet the needs of the customer. Not the typical customer, but that specific person.
Mr. Rafal regularly buys bicycle accessories at his favorite sports store, so this category will be at the top of the list for him. The home page, in turn, will greet him with promotions related to his favorite products and brands.
If your customer was looking for a bicycle pannier and a phone holder, but didn’t complete the purchase, the next time he visits the store he will see the best offers for those very products. The history of purchases and other movements on the site will successively build a set of recommendations for the customer, offering him more and more matching products automatically.
In this vision of the future, you will send messages from the store at convenient times and circumstances. Information about promotions will reach your customers at the moment when they are most ready to make a purchase. In a break from work, during a public transport trip or in the evening when they are relaxing at home. It will all depend on their preferences.
Where to get data for hyperpersonalization?
This sounds very encouraging. The use of artificial intelligence and process automation have the potential to create an effective solution for years to come. However, the foundation for hyperpersonalization to work is still data. Without them, even the best tools won’t have a chance to prove themselves.
First-party data
In the context of hyperpersonalization, the most important data will be “first-party” data, i.e. data that you can acquire on your own using tools integrated with your store. This group will include transaction information, site behavior, as well as CRM data and site analytics.
Third-party data
Information on customer social media activity, weather and location data, and even physical activity data (e.g. from sports watches). You can use all this information in personalization…. provided that they are provided voluntarily. Your store must also comply with all requirements for processing and managing customer data.
Which data to believe?
The closest to the truth answer would be: none. One of the elements that determine whether hyperpersonalization will be successful is the reliability of the collected data, as well as its timeliness and completeness. To this end, it is necessary to verify the collected information and get rid of the questionable ones. There are already tools that streamline these processes, and we can expect a strong expansion of this area of hyperpersonalization support in the future.
Hyper-personalization in e-commerce – a reality
It’s time for the “expectations vs. reality” segment. After all, there is no rose without thorns, and hyperpersonalization is by no means an exception to this rule. Here are four important elements to look out for before you decide to invest in hyperpersonalization.
Data does not come out of thin air
We have emphasized many times in this article that hyperpersonalization is based on data. So it is obvious that you need to acquire it first. However, not all consumers will happily throw data packets at your company. People are starting to pay more and more attention to maintaining their privacy (or the remnants of it) and are reading more carefully than usual what they agree to.
RODO is still in effect…
…and there is no indication that the situation is about to change. If you do business in Poland, you have to reckon with the provisions of RODO. This means meeting a number of requirements for processing and securing customer data. You also need to ensure that customers give informed consent to share information about themselves.
Nothing is free
Tools that enable hyperpersonalization, and collect the data you need, cost money. What’s more, your company will likely need more than one application to support all the major systems involved in hyperpersonalization. So be prepared to incur costs.
Hyper-personalization can be… too “hyper”
It’s not hard to overdo hyperpersonalization. This has to do with what we wrote about in the first point – Internet users are becoming more cautious, and bombarding them with messages that include important details from their lives can – instead of building a relationship – undermine their trust in your company. While hyperpersonalization offers tremendous opportunities, you shouldn’t take advantage of them all, and certainly not all at once.
How to implement marketing activities based on hyperpersonalization?
Implementing hyperpersonalization is not a walk in the park or a task for one afternoon. Before you begin, estimate the costs. Gather the necessary data and verify that it will be sufficient. Make the most of the information you gather using advanced tools such as Salesforce or Bloomreach, which will also help you manage the data.
However, remember the human element. On the other side of the hyperpersonalization process is the consumer – a human being who does not necessarily wish an online store to know everything about him and use this knowledge to recommend products. Try to build a long-term relationship with the customer at its center.
Wanting to create a uniquely personalized environment and customer experience, be prepared for a marathon. Implement new solutions gradually and carefully, testing them on smaller groups before releasing them into wide waters. Good luck!
