Personalisation in E-commerce: Strategies and Solutions for Brands
Personalisation has become a staple in today’s digital landscape, and online retailers are no exception. Consumers have grown increasingly accustomed to tailored content, recommendations, and search results, making it a priority for brands to deliver personalised experiences that cater to their customers’ unique preferences and behaviours.
On Instagram and TikTok, users are served up precisely what they want to keep them glued to the app. Netflix’s algorithms are designed to maximise engagement with its subscribers. Still, few retailers have taken the critical next step to offer true personalisation on their e-commerce websites.
In a survey of over 100 brands and retailers, only 20 percent of them said they customise product recommendations based on a customer’s purchase history, according to research from Manhattan Associates. While adoption of personalisation has been slow, brands know that customers now expect a tailored experience while shopping online.
Implementing personalisation in e-commerce is complicated, requiring brands to either build custom algorithms from scratch or use software platforms that can handle predictive analytics, machine learning, and AI-driven solutions. Finding the necessary tech talent and resources to invest in expensive platforms makes it even harder for smaller brands to deliver a personalised experience on their websites.
This article explores the common barriers that prevent brands from delivering true personalisation, reviews the criteria for building successful solutions that improve online shopping experiences, and looks at the strategies that brands can use to introduce personalisation to their online stores without breaking the bank.
Common Barriers to Personalisation in E-commerce
There are not many examples of retailers that have successfully offered personalisation, even among established brands. In 2019, Stitch Fix, known for its styling service and monthly subscription boxes, began pushing customers to buy items recommended by algorithms based on their style preferences directly from its site. However, these efforts ultimately caused a decrease in sign-ups for its core service, resulting in a sales growth slump by 2022, according to company executives.
For smaller brands, implementing personalisation features is especially cumbersome. Platforms with built-in AI solutions can charge a minimum of thousands of dollars a month. By contrast, e-commerce software firms that power brands’ online storefronts, such as Shopify and BigCommerce, charge as little as $30 a month.
Building and maintaining custom algorithms in-house is even dicier. Fashion brands often struggle to lure data scientists away from more lucrative jobs in the tech industry. Many brands are not adept at gathering and interpreting the customer data they already have on-hand.
“Understanding your customer and where you want to go before you start deploying a bunch of tools,” says Sona Abaryan, a partner at Ekimetrics, which delivers AI-based solutions. “If (brands) don’t fundamentally understand their customer, personalisation of the website is not priority number one.”
Getting Scrappy and Introducing Personalisation Without Breaking the Bank
Fashion and beauty start-ups that can’t afford sophisticated AI solutions can start by introducing services to help them collect data. For example, skin care brand Fig.1 offers a consultation service. After customers answer questions about their skin concerns, products they currently use, and upload a photo, they are sent an email from a licensed esthetician with a customised skincare routine full of Fig.1 products.
Similarly, five-month-old performance footwear seller Hilma developed a fit finder to help shoppers navigate its 45 sizes which range from 5 to 12 and include several widths and lengths. First-time customers answer questions about their body type, the shoe brands they wear and the volume and dimensions of their ideal running shoe and are then shown the Hilma running shoes most likely to fit their feet.
Small brands should leverage what customers do with their brand in that first-party environment to personalize their journey on the website, says Sona Abaryan. “If they’ve left something in the cart, if you know their size, these are the features that you can personalise to make their experience easier and more relevant.”
Brooke Torres, Hilma’s founder and CEO, wrote the algorithm for the fit finder and worked with a developer to code it into the site’s backend infrastructure. “We never considered a running shoe that wasn’t personalised,” she said. “What I was trying to mimic with it is creating the best shoe salesperson you could imagine.”
Moreover, brands hope that AI software will become more affordable in the coming years. Andrew Bernstein, co-founder and CEO of clean cosmetics subscription box brand Kinder Beauty, said the company would be quick to invest in such software when it becomes more cost-effective. Until then, Kinder Beauty is gathering more of its own data, allowing customers to choose two out of the five items they receive in their monthly boxes to learn more about their preferences.
“Where we are now is a starting point. We aren’t anywhere close to the final form,” Bernstein said. “As soon as we are able to dip our toes into those customised and personalised waters, we’ll be the first ones to jump.”
Conclusion
Personalisation can be a powerful tool to help retailers better engage with their customers and drive sales. However, it can be challenging for smaller brands to introduce personalisation features due to the technical and financial hurdles associated with implementing personalisation.
To achieve successful personalisation, fashion and beauty start-ups can leverage customer data collection in first-party environments, create tailored services and tools that solve a specific user problem, and think outside the box when it comes to developing algorithms that deliver predictive analytics, machine learning, and other AI-driven solutions.
As AI software becomes more accessible to smaller brands, it is essential to stay up-to-date on the latest technologies and solutions in the market. By doing so, smaller brands can learn how to harness the power of personalisation to create better customer experiences and increase their sales in today’s competitive and ever-evolving e-commerce space.
