The Fast Lane
Discover the world of AI-driven shopping optimization and fast-track your way to increased conversion rates, AOV, and customer loyalty. Explore expert insights on e-commerce personalization, merchandising, site search, and more.
Personalization6 Benefits of Using AI in eCommerce PersonalizationPersonalization is here to stay. Up to 63% of your customers expect personalized recommendations from you. This might feel like a lot of pressure, but you can easily tick all the personalization boxes by incorporating AI into your personalization strategy. This means using capabilities like machine learning, natural language processing, and predictive analysis to give your customers personalized product recommendations, emails and messages, social media content, and more. Below we discuss the benefits of using AI in eCommerce personalization to help you take your store to a new level.
6 Benefits of Using AI in Personalization
Enhanced customer experienceIncreased customer loyaltyImproved sales performanceCost savingsCompetitive advantageScalability
1. Enhanced Customer Experience
Happy customers are more likely to return, leave positive reviews, and recommend your business to others. AI can help you create an exceptional customer experience by:
Making data-driven recommendations
AI can provide personalized recommendations based on a customer's browsing and purchase history, making it easier for customers to find products they want. Offering personalized customer service
Personalized chatbots can elevate your customer service. Available 24/7, chatbots can instantly answer customer queries and provide support when your customers need it. This quick and seamless experience can boost customer satisfaction.
By enhancing customers' experience with AI, your eCommerce business can build long-lasting relationships with customers, driving revenue and growth.
» Boost your chatbot service by including ChatGPT in your eCommerce strategy
2. Increased Customer Loyalty
Customer loyalty is important to any eCommerce business because it leads to
repeat businesspositive word-of-mouth marketinghigher lifetime value for each customer
AI-powered personalization can help you increase customer loyalty by:
Offering personalized rewards
AI can help you improve traditional loyalty programs by giving your customers personalized rewards based on their behavior. By analyzing past purchases and overall engagement, AI can work out which rewards are best suited for each customer. Interacting with customers in real-time
AI-powered systems can monitor store and customer activity in real-time. So, if a customer has added products to their cart, but they're not completing the purchase, AI can immediately react. By offering a limited-time discount or personalized reward, AI can encourage the customer to finish their buying journey.
These personalized interactions with your customers not only encourage them to make more purchases but also make them feel valued and appreciated.
» Enhance your customer interaction by understanding the difference between personalization vs customization
3. Improved Sales Performance
AI-powered product recommendations and upselling and cross-selling opportunities can significantly improve your business's sales performance.
Upselling
AI can analyze customers' browsing and purchase history, so can recommend relevant products to upsell. For example, if AI picks up that a customer is buying the individual components of a specific product range, it can upsell the entire bundle as a complete set.Cross-selling
Similar to upselling, AI can use customer data to cross-sell relevant complementary products to customers. For example, if AI notices that a customer is browsing your store for a new camera, it can suggest a compatible tripod when the customer checks out. So, AI will also be able to determine at what stage of the sales funnel it's best to cross-sell.
» Explore additional benefits of upsell and cross-sell personalization
4. Cost Savings
AI can be a cost-effective solution for eCommerce businesses because it automates their personalization efforts and eliminates the need for manual labor in many cases.
Sephora: Your Personal Makeup Artist
Sephora uses an AI-powered app to help customers with product recommendations, beauty advice, and easy shopping. But the app's most interesting feature is the Virtual Artist. Its AI capability allows the customer to "try on" different beauty products, play with different looks, and follow make-up tutorials for their face shape and skin type. AI allows Sephora to put a 24/7 make-up expert in their customers' pockets—reducing costs associated with sales reps, overheads, and product samples.
5. Competitive Advantage
When you use AI effectively, you can set yourself apart from your competitors. This isn't just in terms of customer experience, but also making sure you stay ahead of trends.
H&M: Predicting Personalization to Stay Fashion Forward
H&M uses AI to predict fashion trends by analyzing large amounts of data from search engines and blogs. The algorithms inform decisions such as how much to buy, when to buy, and where to place products in stores. This helps to reduce waste and make more sustainable decisions. H&M's data-driven approach gives them a competitive advantage, allows them to stay ahead of trends, and provides customers with what they want.
6. Scalability
The culmination of all the AI benefits discussed so far can help you scale your personalization efforts and ultimately your business. By processing large amounts of data and providing real-time recommendations, you can personalize the shopping experience for each customer. AI can help you identify patterns in customer behavior and preferences, enabling you to make data-driven decisions about which products to offer, how to price them, and how to promote them.
Use AI to Personalize Your Site Fast
AI can bring significant benefits to your eCommerce personalization strategy. You can:
provide an enhanced customer experience increase customer loyalty improve sales performance save costs gain a competitive advantage achieve scalability
However, it's important to remember that your store is unique. Consider carrying out A/B tests to find out what's the best way for your business to incorporate AI into your personalization strategy. Once you're in the right groove, you'll grow your eCommerce store in no time.
» Incorporate AI into your customer communication: Here's how to use AI in personalized email marketing and to optimize social media
PersonalizationPower of Omnichannel Personalization: Enhance Your Customers' Shopping ExperienceAre you familiar with the more the merrier? Your customers are. That's why 76% of them prefer it if you engage with them on different channels. But simply throwing an "omnichannel net" of generic content your customers' way isn't enough. Each interaction on each channel must be personalized and relevant to make sure your customer feels valued. This is where omnichannel personalization can help you enhance customers' shopping experience, drive customer loyalty, and boost sales.
What Is Omnichannel Personalization?
Omnichannel personalization is when you cater to the unique needs of individual customers at every touchpoint on the customer journey and across every channel they use to engage with your brand.
It's often confused with "multichannel personalization," which is typically disjointed and doesn't connect the whole experience into a single ecosystem across the various channels used.
Omnichannel personalization can help you provide personalized experiences to your customers at each point of contact, including:
brick-and-mortar storesonline marketplaces social media platformsprivate communications like chats and messaging
How Can You Achieve Omnichannel Personalization?
There are many types of omnichannel personalization methods you can start applying to your business. These include strategies like
personalized product recommendations custom content targeted promotions personalized pricing tailored social media marketing
Timberland: Taking Personalization Up a Step
Brick-and-mortar locations are using technology to take omnichannel to a whole new level. For example, footwear brand Timberland uses in-store tablets and digital displays to let customers create favorite lists, learn about products in the store, and continue their shopping journey at home.
Bright Minds: Use Data to Increase Your Personalization Efforts
Like behavioral marketing, to succeed in omnichannel personalization, you must use customer data to create personalized experiences. This can include using a customer's purchase history, browsing history, and favorite lists to recommend relevant products or offer customized discounts. As your company grows, use a central tracking and analytics system to keep track of all touchpoints. Incorporating AI systems into your store can supercharge these efforts.
For example, the educational toys online retailer, BrightMinds, leveraged advanced personalization technology to analyze customers' demographics, purchase history, and preferences. With this data, BrightMinds could offer their customers tailor-made shopping experiences with highly relevant information. This led to a conversion rate of over 25% for personalized shoppers.
» Learn more about how personalized recommendations work
Benefits of Omnichannel Personalization
Increased Customer Satisfaction
Personalized experiences at different touchpoints can lead to increased customer satisfaction and loyalty. This happens when you can meet customers' expectations and create a reliable, consistent, and more enjoyable shopping experience at each stage of the customer's shopping journey.
One simple way to do this is through a rewards system, like the one Starbucks has been using to keep tens of millions of customers happy. They make the program available on their site and through a mobile app. This rewards program drives half of all their sales—proof that customers who use the app are engaged and satisfied.
» Mobile commerce is making waves in the eCommerce space. Find all you need to know about M-Commerce
Improved Brand Reputation and Differentiation
Integrating channels that deliver a consistent and positive experience helps develop a clear brand identity that customers can trust. A strong, identifiable, and unique brand identity is necessary to improve customer perception of your business. This, in turn, is necessary to ensure you stand out from the crowd and make an impact on the market.
Increased Sales and Conversions
Personalized experiences can lead to increased sales and revenue for businesses. Personalized experiences like targeted promotions and product recommendations, coupled with omnichannel integrations like cross-channel experiences and support, ultimately drive sales. When customers can start engaging on one channel, move onto another, then complete their purchase on another, they're much more likely to move forward with the purchase.
Challenges and Solutions for Omnichannel Personalization
While there are many benefits associated with personalization, you'll also face some omnichannel personalization challenges as you find your path to developing and implementing your strategies. For example, many businesses face obstacles around data integration, data interpretation, and customer privacy concerns.
Here are a few tips to help overcome common challenges:
Don't skimp on the tools and tech you use to collect and manage data. For instance, consider a headless content management system (CMS) instead of a traditional CMS. Headless commerce offers maximum flexibility and capabilitiesGet a 360-degree view of your customers to better track data across all channelsClean and organize your data so it's easier to segment, analyze, and interpretGet customers' permission to collect their data, and don't over-collectClearly communicate your privacy policy to customers so there are no grey areasEnsure that all of your tools and tech are secure and compliant with data privacy regulations in all regions your store does business
Having a clear strategy and setting realistic goals for implementing omnichannel personalization is essential. As you get into the flow, be sure you're continually analyzing and adjusting personalized experiences to meet changing customer needs and preferences. A/B testing is a good way to try out different ideas at the same time and compare results afterward.
Fast-Track Your Business Growth With Omnichannel Personalization
When it comes to enhancing your customers' shopping experience, an omnichannel personalization program can have incredible power. By implementing data tracking and analysis, interpreting the data into meaningful strategies, and incorporating those strategies into your company's foundations, you can drive growth and revenue for years to come.
Just keep in mind that it takes some experimentation—what works for one brand may not work for another. The next step is to get out there, research, and try your own omnichannel personalization strategies. It'll help you continually adapt to changing customer needs and stay ahead in the market.
» The next step: Leverage omnichannel merchandising to accelerate your business growth
PersonalizationB2B vs B2C Personalization: 5 Key DifferencesPersonalization is non-negotiable for online shoppers. If more than half of your customers want a curated shopping experience, then it's essential to get it right. But where should you start? It's all about context. B2B (Business-to-Business) vs B2C (Business-to-Customer) personalization can help you understand what your customers are expecting and find the right approach to meet those expectations. Below, we take a look at the differences between B2B vs B2C personalization so you can develop effective personalization strategies.
5 Key Differences Between B2B vs B2C Personalization
Audience characteristicsRelationship buildingPersonalization methodsData collection and analysisMetrics and ROI
1. Audience Characteristics
When trying to evaluate the characteristics of your audience, you'll need to look at some critical categories like buying habits, decision-making processes, and expectations.
B2B
A B2B audience is more relationship-driven. You don't just focus on logic and numbers. You also need to build a sense of loyalty and trust. This means that a B2B purchase cycle may take weeks, months, or even years depending on what's being purchased. Plus, this decision might involve multiple stakeholders—so you'll need to build relationships with all of them.
B2C
In contrast, a B2C audience is more product-driven. This means you'll need to focus more on selling the value of the products, while appealing to emotion and using easy-to-understand language. A B2C shopper also has a much shorter purchase cycle than a B2B buyer, especially if the item is relatively inexpensive.
2. Relationship Building
To build long-lasting customer relationships, you'll need to be trustworthy, reliable, and consistent no matter who your customers are.
B2B
Building on our previous point, the relationship-building process should be more in-depth in a B2B environment. These customers have higher expectations for what you're bringing to the table and how you show up. After all, you're not simply selling a product—you're giving expert advice and delivering custom solutions for specific business challenges. This means your communication with B2B customers will also be more intimate via meetings, calls, or email exchanges.
Pro Tip:
If you have a sales team that speaks directly with buyers, we recommend using a customer relationship management (CRM) platform to keep track of critical details, like who you're speaking with, what you're discussing each time you engage, and how the purchase is moving through the pipeline.
B2C
Your customer relationships aren't necessarily as intimate as B2B. Because you're serving a bigger audience, you communicate with your customers all at once via different digital channels like websites, mobile apps, and social media. Your focus is also to build trust with your audience and demonstrate why your brand and products are better than your competitors.
Pro Tip:
Build credibility and social proof with reviews, surveys, and user-generated content.
» Delve deeper into how user-generated content creates conversions and increases brand loyalty
3. Personalization Methods
All audiences, regardless of who they are and what they're buying, want to see information that's relevant to their wants and needs.
B2B
In the B2B world, your personalization methods must be focused and relevant to the customer's industry and business model. The average B2B buyer will read 13 pieces of content before deciding which vendor they'll go with. On the other hand, someone buying a case for their iPhone likely won't be doing such thorough research. This means proving your credibility and value in different ways, including:
Showcasing your expertise through reports and researchEstablishing your customer service through case studies and customer testimonialsOffering dynamic pricing structures and product packages to meet customer needsAssigning a specific account manager to offer personalized advice
B2C
Because B2C has a shorter purchasing cycle than B2B, you're trying to encourage customers to buy now. Plus, if they had a pleasant shopping experience, they'll come straight to you next time instead of browsing competitors. You can personalize the B2C shopping experience by:
Making personalized product recommendations and taking advantage of upsell and cross-sell opportunitiesOffering personalized pricing strategiesGiving custom rewards through loyalty programsUsing behavioral retargeting to showcase tailored ads
» Find out how to create the best personalization experience on your eCommerce store
4. Data Collection and Analysis
While both B2B and B2C businesses use strategies like website tracking (e.g., Google Analytics) and third-party data sources, their data collection and analysis differ in terms of volume, complexity, sources, and goals.
B2B
While B2B has a lower data volume, its data collection and analysis are more intricate and detailed. Because the goal is to build long-term relationships with customers and offer personalized business solutions, you must collect detailed information about your business customers' companies. You can collect data from:
Account management platformsCustomer support systemsEmail exchangesInteractions with multiple role-players in the business
B2C
B2C has a large data volume because it serves a large customer base made up of multiple individuals—each with their own needs and preferences. To offer personalization to a big audience and improve their shopping experience, you need to divide your audience into segments. For example, according to behavior or demographics. But before you can segment and analyze data, you have to collect it from the right sources:
Customer interactions on your websiteCustomer activity on social mediaCustomer feedback through reviews, surveys, comments, or emails
» Use these customer segmentation strategies to grow your eCommerce business
5. Metrics and ROI
Both B2B and B2C businesses must measure the effectiveness of their personalization strategies to identify areas for improvement and optimize future campaigns.
B2B
Because B2B transactions have longer sales cycles and more complex decision-making processes, the metrics you track focus on monitoring the different stages of your sales pipeline. This can include lead-to-opportunity conversion rates, average deal size, sales velocity, and win/loss ratios to understand and improve your sales performance.
Additionally, you'll calculate ROI (Return on Investment) at the account or customer level, because you're aiming to establish long-term relationships. You'll look at factors like revenue generated, margins, and the costs associated with acquiring, serving, and retaining customers.
B2C
In comparison, because B2C has shorter sales cycles, you'll look at metrics that focus more on immediate customer actions. This can include conversion rates, average order value, and repeat purchase rates.
When calculating ROI in B2C, you'll focus on specific campaigns, channels, or marketing initiatives and the impact on sales, conversions, and customer acquisition costs.
The Fast Lane to Personalization
To successfully implement personalization and effectively engage and retain customers, it's critical that you understand the key differences between B2B and B2C audiences.
Just keep in mind that you'll likely need to experiment until you find your perfect combination of strategies. Create a plan, test your personalization strategies, and analyze your performance. Once you've found your personalization sweet spot, you can effortlessly grow your eCommerce business.
» Discover more ways personalization can help your business
PersonalizationDecoding Personalized Pricing: What It Is and How It WorksResearch shows that increasing the average price of online goods by just 1% leads to an 11% boost in operating profit. But just changing your prices isn't enough—you need to use the right strategy. Personalized pricing is a data-driven pricing strategy that can help you give customers individual offers based on their history and preferences. Below, we decode personal pricing by outlining what is it and how it works to help you remain competitive and better meet the needs of your customers.
What Is Personalized Pricing?
Personalized pricing is a strategy that tailors prices to individual customers based on their personal data, such as purchase history, browsing behavior, or preferences.
Personalized pricing aims to optimize the price of goods or services to each individual, so you can build meaningful connections with different customer groups and expand your sales.
It's important to differentiate between personalized pricing and dynamic pricing. Where personalized pricing focuses on the individual, dynamic pricing adjusts prices based on external market conditions, like product supply and demand, seasonality, and competition.
Personalized pricing exists in different forms, including:
Customer-based pricing: Prices are tailored to individual customers based on personal data, such as browsing behavior and order history. Demand-based pricing: Prices are adjusted in response to market demand and other relevant factors to reflect current conditions. Location-based pricing: Prices vary based on geographic location, allowing you to adapt pricing strategies to specific regions or markets.
How Does Personalized Pricing Work?
Personalized pricing works through intelligent algorithms and advanced technologies like machine learning and AI. These tools analyze real-time demand and customer data, and with predictive personalization, calculate prices that will appeal to individuals. Using personalized pricing, you can adapt your prices as and when needed to maximize revenue and cater to shopper preferences.
Personalized pricing is a common strategy in the hospitality industry, which uses a broad range of customer data, including device type, location, booking history, and browsing history. For example, the online travel agency, Booking.com, uses customer data and AI algorithms to determine accommodation rates for each customer.
As you can see below, the rates differ for the same accommodation, dates, and number of people. However, the searches were made by two people on separate devices and in different locations. In this instance, the second customer, who had a Booking.com account and had made previous bookings through the website, was charged $20 less than the first customer.
Benefits of Personalized Pricing
Improved Customer Experience
An enhanced customer experience lies at the core of personalized pricing. For example, an online fashion retailer analyzes customer data to offer tailored pricing options. By seeing each customer's preferences and purchase history, the merchant can provide personalized discounts and promotions on items that align with their unique style. This strategic approach creates a seamless and gratifying shopping experience where customers feel valued and understood.
Higher Customer Loyalty
As customers have better shopping experiences, their increased satisfaction often fosters customer loyalty. Tailoring prices to meet individual needs and offering targeted discounts, promotions, and product bundles allows you to build stronger relationships and establish a deeper connection with your customer base. When customers receive personalized offers that cater to their unique interests, they feel valued and are more likely to remain loyal.
» Read more about how to address barriers to brand loyalty
Increased Market Share
In the quest for market dominance, personalized pricing is a powerful tool that strategically distinguishes you from your competitors. Tailoring prices to individual preferences and needs gives you a significant advantage in attracting and retaining customers. With personalized pricing as a key strategy, you can forge your path toward market leadership.
Increased Revenue
By tailoring pricing options to individual customers' specific preferences and behaviors, you can enhance the appeal of your offerings. Improved customer satisfaction and loyalty and gaining a competitive edge over rival stores drive more sales and revenue—both in the short and long term.
Ethical Considerations
Personalized pricing raises some ethical concerns that you must address.
Fairness of different prices
When companies increase product prices because demand outweighs supply, they potentially price out individuals with limited purchasing power or those who prefer to buy products at regular prices. This practice can perpetuate disparities and create a perception of inequity among consumers. Privacy and transparency regarding personal data
Businesses often rely on AI to boost conversions, employing algorithms that operate behind the scenes to collect and analyze customer data. However, customers are often unaware of how these algorithms determine their personalized prices. To address this, consider offering customers the option to opt out of personalized pricing and empower them with knowledge about the practices involving their personal data.
Personalized pricing is advantageous for you and your customers when you aim to find the best balance between generating the most revenue and offering customers the best deals.
Get Ahead of the Competition Fast With Personalized Pricing
This individualized approach to pricing is fast becoming one of today's online shopping trends, with more brands investing in sophisticated technology to display the right price to the right shoppers at the right time.
As AI in eCommerce continues to grow exponentially, the future of personalized pricing is bright. But if you decide to incorporate this pricing strategy, it's essential that you work to develop personalized pricing strategies that prioritize fairness for customers.
» Learn more about the personalization experience & how else to implement it in your store