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Webinar Summary: How to Enable Data for Personalization Opportunities in Your E-shop

Dana Toušová
March 07, 2022 | 9 min read
On February 22 Simplity hosted our first webinar where we talked about personalization opportunities for e-commerce businesses. The speakers were our personalization experts, Business Consultants Karel Žitný and Jan Rážek. Karel has over fifteen years’ experience in digital marketing and sales, and Jan has vast experience with improving efficiency and performance for active customers using data analytics and data science. Both shared their insights focused on why personalization in e-commerce is crucial.

We made a recording of the How to Enable Data for Personalization Opportunities in Your E-shop webinar which is now available online. For those who would like to skim through an overview of the most important highlights from the webinar, we have prepared this blog post. Let us recap why personalization in e-commerce is needed, describing two specific use case scenarios of its efficient usage.

Why is personalization needed in e-commerce?

Nowadays, having a static website may lead to your customers not feeling valued. If your customers feel that they are not at the center of your attention, a couple of downsides can occur. Firstly, you will not intrigue your customers to shop as frequently as they normally would and, secondly, they might churn. On the other hand, a personalized website will make customers feel welcome and they will most likely spend more time on your website, as well as more money.

One might object that the personalization can be tricky when customers are not happy to provide their personal data. On the contrary, according to a recent Accenture survey, up to 83% of all customers are willing to share their personal data in return for a personalized experience. Customers are getting increasingly demanding and, according to the same survey, around 91% prefer to shop at brands who recognize them, providing relevant recommendations and offers.

Benefits of personalization for e-commerce businesses are clear. You will be able to not only retain your customers but also increase the frequency of their shopping , increase the average order value and boost the overall user experience. All of which combined, leads to improved lifetime customer value. There is already a huge gap between those companies which can provide their customers with a personalized experience and those who cannot, and the gap is expected to grow. Every company that wants to keep up with the trend should start with their personalization efforts as soon as possible, as it is going to be much more difficult in the future. For the successful establishment of personalization you will need algorithms, have full control over your data and have your data environment scalable. Since your data will increase exponentially, your system must also be able to handle this.

Personalization and personification opportunities

While personalization focuses on interacting with users who have already registered in your e-shop or are your active customers, personification focuses on improving the shopping experience for anonymous users of your e-shop. Anonymous users probably offer the biggest potential for your e-shop as this group represents about 97-98% of all users. If this, usually the most underrated, group bounces from your website they most likely will never return and will become customers of your competitors instead.

Use case: Impact of a personalized cookies consent on the customer journey

In this model scenario we have an e-commerce shop earning 480.000 EUR annually. Out of 20 million expected views of this store on Google, only 4 million land on the webstore. From this group about 30% will visit the product page and 20% will make it to the shopping basket, which makes around 240k users. Total gain is just about 5k of orders, at an average order value of 100 EUR.

With efficient anonymous personalization (before the EU cookie regulation) you could gain about 5% increase of users coming to your landing/home page. Eventually leading to about a 10% increase of total orders (over 10k). Now, due to the impact of a cookie consent, the probability of achieving such numbers has lowered, and the overall number of orders will drop below 7k. However, with a personalized cookie bar you will be able to achieve an increase to almost 8k number of orders in total. In this use case, Simplity can secure, through cookies, anonymous users’ segmentation, a +14% of turnover (+116.752 EUR).

Use case: Active customers and frequency of shopping

Active customers are defined as, all those who have registered on your e-shop and have made at least one purchase. It is important to point out, that active customers are probably the most important for you to focus on – they already know your e-shop, they have shopped there before, you have plenty of data about them and there is a high chance they would continue shopping there. Therefore, if you invest into personalization for these customers there is a high chance you will be able to increase the value you get from them.

In this use case, you can work not only primarily with transactional data, but also behavioral data (contact history from all accessible channels) as well as real-time data (weather, time of the day). According to this knowledge you can fine-tune your personalization algorithms so that their efficiency is even higher.

The active customers can be segmented into two groups – some of them belong to the “growth” group and are likely to generate more value and some of them belong to the “retention” segment.

However, they may have not shopped with you for some time, and they might not again in the future. In this use case we will focus on the active customers in the “growth” group. There are three ways of increasing annual revenue:

  1. By increasing number of active customers while retaining the current ones;

  2. By increasing the average order value (cross-sells, upsells);

  3. By increasing the shopping frequency.

When focusing on increasing shopping frequency, you need to personalize the higher stage of the marketing funnel, such as the product detail page. This means implementing personalization elements such as recommended or last viewed products, hero banners showing products a customer is likely to buy, as well as reflecting on events they might be interested in e.g., birthday offers, current events such as the Olympics. Personalizing the search bar is also a powerful tool to increase frequency of shopping.

Based on our experience, by implementing these personalization features, you can increase annual revenue by 8.33%.

Key takeaways

The key takeaways from our use case scenarios are the following:

  1. Cookies consent anonymous personalization can increase e-shop annual turnover by more than 10%.

  2. Homepage personalization can help to increase your turnover by more than 5%.

  3. Personification and personalization can increase your e-shop turnover by more than 20%.

Data analysis services crucial for improving the personalization opportunities in your e-shop are the market basket, segmentation, and buying windows. The successful data analysis consists of several steps such as the data audit, data assessment, the data analysis itself, and the creation of segmentation algorithms. Learn more about Simplity’s professional data services and how we can help your business.

If you would like a free consultation regarding the personalization and personification challenges in your company, we offer a two-hour consultation with one of our customer analytics consultants. Get in touch with us.

Dana Toušová
VP Marketing

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