The Importance of Personalization in E-commerce

Insights7 min read

As you will see in this post, personalization in ecommerce is not just a buzzword—it directly impacts ROI, improves customer experience, and strengthens your brand.

This article will give you some common personalization examples but will also discuss some cutting-edge tech solutions that will push ecommerce personalization to a new level, allowing your store to tower over the competition when it comes to a truly personalized ecommerce experience.

The benefits of ecommerce personalization

Just in case you are not familiar with the benefits of personalization and what it can bring to your store, let's highlight some major ones:

Improved conversions and more sales

The most basic form of personalization is serving tailored content to customers, based on their previous behaviour, general preferences, or interactions with your store, a.k.a. dynamic content.

Although quite common, serving dynamic content alone directly results in better conversion rates and more sales – if someone is looking to buy a fishing rod at your store, offering them appropriate lines and hooks will naturally lead to making more sales. Not only that, the customer will actually be grateful to see common items offered to them, especially if they are supplementary to the main product they came for and easy to forget.

That will mean more sales, better conversion rates, and better ROI. If the customer clicked on your fishing rod ad and bought hooks, lines, and a foldable chair, only a single ad would bring all of those extra purchases. And let's face it, you would hardly ever place an ad just for regular fishing hooks. Plus, you get to deliver all of that in a single package, saving even further on logistics costs.

Enhanced customer experience and improved loyalty

If we stick to our fishing equipment store example – we not only allow your customers to buy everything they need for their fishing trip in a single place but also recommend items that are commonly purchased together, as well as show them products they previously purchased or viewed before will enormously improve their entire experience.

Because of this, your store will become their go-to place whenever they need to buy anything related to fishing. As long as you deliver quality products on time, they will remain loyal to your store and hardly ever look to competitors.

If you run a made-to-order business, you can even take this a step further – not only offering customers dynamic content but actually showing them how the product they are browsing will look when delivered and even allowing them to customize it on their own.

This level of customization will tremendously improve their entire experience and improve customer loyalty – we will further discuss it in the high-tech ecommerce personalization section.

Improved brand engagement as a competitive advantage

We started the section by explaining how ecommerce personalization makes it more convenient for customers to finalize their purchases, helping you close more deals simultaneously. Then, we highlighted how personalization will improve their overall experience, not just due to convenience but because they can personalize the actual product.

Because of this, your store will become their go-to place whenever they need any type of product your store offers – to them, your brand will become synonymous with the niche of your store. That will result in much higher customer engagement, significant CLV boosts and organic recommendations, as loyal customers will likely tell other people with similar interests about your store, getting you even more customers. 📈

User-generated content

While user-generated content is not ecommerce personalization in a strict sense, the fact that your customers can read what other people think about the product they are interested in, whether by reading comments and reviews or testimonials on your site, will bring them enormous value.

It's one thing to read product descriptions, and something entirely different to actually see what people think when they have it in hand.

If you take this a step further, you can allow customers to post video testimonials or leave images in their reviews. In that case, you will show other customers that you have nothing to hide and that your store truly lives up to what you see is what you get moto.

Examples of personalization in ecommerce

We explained how ecommerce personalization works in theory; now we'll give you more concrete examples that will help you visualize how it can impact your business:

Evergreen examples of ecommerce personalization

Here are three examples of personalization you see most often:

Localized and targeted content

Serving dynamic content based on customer location and personal characteristics (such as age, gender, education, etc.) is very common, especially in social media marketing. This is helpful when it comes to closing more deals and allows you to waste fewer resources on bad marketing.

Recommended products

We discussed this in our fishing store example, which showcases how you can help customers bundle purchases by showing them products that often end up in shopping carts together. But, if you have more information about their interests, you can customize even further and show them personalized product recommendations based on their purchase history or profile information.

This saves them an enormous amount of time as they don't have to go through product categories just to find a supplementary item, which is often put under the "other items" section, making it easy to overlook.

In fact, 63% of smartphone users are more likely to purchase from companies whose mobile sites or apps offer them relevant recommendations on products they may be interested in, as a Google survey shows.

Plus, they don't have to re-order a supplementary item once they realize they forgot it initially, which will decrease customer satisfaction and create more shipping costs, often accompanied by headaches that follow dealing with delivery services.

High-tech ecommerce personalization

While showing relevant content to customers through personalized product recommendations is super helpful (and a must-have) for most stores, new technologies allow you to go an extra step and transform the entire customer journey:

Customer product customization

While most stores offer customers options such as size and colour, allowing customers to customize the products before purchase and see how they look in real time is what true customization is all about. Instead of picking between a few preset options, they can develop unique designs and even change product components.

This is super useful for made-to-order businesses, such as furniture stores, where it would be next to impossible to allow the customer to see how the end product will look before the purchase.

3D + Rendering Engines

Let's build on top of our furniture store example – choosing dimensions is just one small part of the equation, but it used to be next to impossible to decide how the product would look and "feel" in the actual space. Regular pictures just won't cut it, as it is hard to visualize the depth of the item.

But, with modern technologies such as 3D and engine rendering, you can allow the customers to see the product from all angles via 360-degree view and 3D animation. That will help them decide and ensure they are happy with their choice in advance, resulting in fewer customer complaints and returns, saving you time and money.

VR and AR in-space product visualization

Our furniture ecommerce store is an excellent example of how cutting-edge technologies such as virtual reality (VR) and augmented reality (AR) can help with in-space product visualization. Using VR goggles or their phone, customers can see how the product will look in their actual surroundings.

This is a perfect option for deciding which sofa colour and material fits the best with the walls and the rest of the furniture, which is an option that is available to do in advance for the first time. Therefore, if you implement such technology in your store, you are sure to stand out from the competition by being customer-centric and ready to introduce cutting-edge solutions to create a personalized experience.

Custom pricing and recommendations

If we take another industry where personalization shines—PC configurators—you can see how building custom products also allows custom pricing.

If someone chooses the latest graphics card for their build, that means they are likely to choose a high-end CPU but also a quality cooling system, an RGB case, and a PSU that can support all that.

Offering customers all that as they build their gaming PC while showing them how much everything will cost as they build will allow them to change parts while staying within their budget and focusing on what's most important to them.

If you combine the custom build and pricing with some of the tech solutions we discussed above, such as 3D/engine rendering, you will not only allow customers to select computer parts but also see how everything will look once they are finished.

That way, the customer will build the rig of their dreams, buy all the components from a single place, and see how everything looks before delivery. In other words, your store will become their place to go for future computer equipment purchases.

Bottom line

As you can see, even essential ecommerce personalization efforts, such as serving dynamic content based on customer preferences, can go a long way and significantly boost ROI and the number of made sales.

But, if you go a step further, and introduce modern technologies to allow custom product customization and visualization, you can transform the entire customer experience and significantly impact how they view your brand as a whole.

Cocoon specializes in working with made-to-order stores that offer customer-centric solutions. Like your products, the solutions we build for your store are tailored to your specific needs. If you want to modernize your store and offer your customers a unique experience, don't hesitate to reach out and get a free quote.

About Cocoon

Founded in 2015, we're an experience design and software development agency that leverages modern technologies to deliver impactful results for disruptive brands.

Most agencies are built on the idea of a single solution. That's where we're different. We're inherently platform-agnostic, and believe in the selection of best-fit technologies according to business requirements and end-user goals.

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