Everything Brands Need to Know About Ecommerce Personalization

The most successful online stores, including Amazon, eBay, and many others, all have one thing in common — rather than taking a one-size-fits-all approach, they strive to provide a highly personalized shopping experience.

You would be wise to follow their lead and take advantage of ecommerce personalization as well. This will help you provide a better user experience, increase your conversion rate, and ultimately improve your bottom line. Below, we’ll go over exactly what you can do to make your own store more personalized.

Table of Contents

• Ecommerce Personalization Overview
• The Role of Data in Personalization
• Developing a Personalization Strategy
• Translating Strategies into Tactics
• Ecommerce Personalization Examples for Inspiration
• Ecommerce Personalization FAQs

What Is Ecommerce Personalization?

Ecommerce personalization is the practice of tailoring the design and marketing strategy of your online store according to the needs, preferences, or profile of the site visitor. 

For example, if someone who previously purchased boots on your store returns for another visit, you could set up a featured products section to show them socks and boot polish, while other products are displayed to different visitors depending on their previous purchases:

Ecommerce personalization has been around for about as long as ecommerce itself — in the mid-1990s, many online stores employed user-based collaborative filtering to recommend products to visitors based on the behavior of similar visitors. Then, in 1998, Amazon launched an algorithm for more advanced item-based collaborative filtering, which soon spread to other popular online services such as YouTube and Netflix. 

In the ensuing decades, many other technologies and techniques have been developed to help ecommerce merchants provide a personalized experience. And with the recent rise of artificial intelligence, there are now more possibilities for personalization than ever before. 

Benefits of Personalization

The management consulting firm McKinsey & Company has done extensive research into this topic, and they found that ecommerce personalization:

• Reduces customer acquisition costs by 50%
• Increases the ROI of marketing campaigns by 10% to 30%
• Increases revenue by 5% to 15%

It’s not too surprising that ecommerce personalization offers such significant benefits. After all, ecommerce is all about convenience — people pay a premium to avoid the hassle of going to a store and physically searching through shelves for the products they want. 

Personalization helps customers quickly discover products they will likely be interested in, making the shopping experience even more convenient. And you’ll benefit too of course, as customers will end up adding more items to their carts and spending more on your store.

Ecommerce personalization also bolsters your brand image. When customers feel like you understand them, they have a reason to stick with you for future orders rather than drifting over to one of your competitors. 

The Different Levels of Personalization

Before we go any further, it should be noted that there are three different levels of ecommerce personalization: one-to-one, one-to-few, and one-to-many.

• One-to-one: In its purest form, ecommerce personalization involves providing a shopping experience that is unique for an individual visitor (e.g., an abandoned cart alert).

• One-to-few: Ecommerce personalization may apply to several visitors rather than just one individual (e.g., an exclusive discount for your top customers).
• One-to-many: Also known as segmented audiences, one-to-many personalization involves curating an experience for a large share of your visitors. Even if it can be seen by millions of people, it still counts as personalization as long as it’s not shown to everyone (e.g., a geolocation-based page design that depicts the skyline of different metro areas depending on who’s visiting).

The Use of Data in Ecommerce Personalization

You’ll need to collect a lot of data about individual visitors (and even individual sessions) to truly benefit from ecommerce personalization, including information like:

• Geolocation
• Name
• Email address
• Age
• Job title or Industry (for B2B ecommerce)
• Items purchased
• Items added to cart but not purchased
• Items viewed but not added to cart
• The last page a visitor viewed before they left your site
• For repeat customers, the time interval between purchases
• Average order value (AOV)
• Customer lifetime value (CLV)
• Previous non-purchase interactions, such as customer service chats, newsletter signups, etc.
• How the visitor landed on your site, such as through a search engine, marketing campaign, etc.

The most valuable sources for this information include:

• Sales data: Whether you use Shopify, BigCommerce, or some other ecommerce platform, you should already have a great deal of data available right at your fingertips. For example, Shopify provides details about order history, abandoned checkouts, customer characteristics, sales by channel, and much more.
• Web analytics: If you haven’t already, set up Google Analytics for your website. This will provide you with robust reports regarding visitor behavior, and Google Analytics also gives you a variety of ways to keep track of your marketing campaigns.
• Surveys: Some details, such as a customer’s job title and income, aren’t going to show up in your sales data or web analytics. To fill in these information gaps, use a survey to directly ask visitors any questions that may help your personalization efforts. Such surveys are often conducted immediately after a customer has made a purchase via the checkout page or a pop-up form.
• Interviews: For the most detailed information, you could set up phone or teleconferencing interviews with customers to really dig deep into how they feel about your products and overall brand. Use an email blast or social media post to recruit participants. If you’re having trouble finding takers, try offering a free product or gift card in exchange for their time.
• Third-Party Tools: Third party data collections tools like Klaviyo can be a great source of information about your customers that can be used for ecommerce personalization.

Some areas, including California and Europe, have particularly strict regulations regarding data collection and privacy–which should be researched before any personalization program is rolled out.

Developing an Ecommerce Personalization Strategy

Now that you know the basics of ecommerce personalization, you can start to develop a strategy for your own store. 

While there are many different ways to segment your audience, the single most important factor is which stage each person is at on the customer journey. This determines the level of engagement that they currently have with your brand:

This information will guide much of your ecommerce personalization strategy. For example, if you sell some type of new or complicated product, you might want to provide cold traffic with content that explains how your products even work — but such content would be irrelevant for repeat customers who are already familiar with this information. 

Your sales data allows you to identify your recent customers as well as your repeat customers (also, an abandoned cart often indicates that the visitor was a bargain hunter). And with your web analytics and other data sources, you can determine which visitors are likely cold or low-intent (this traffic is typically generated by outreach efforts such as paid ad campaigns or SEO marketing). 

The two key segments that all brands consider when they start thinking about personalization strategy are:

• Before first purchase
• After first purchase

The optimal approach to personalization is different depending on if your site visitor has purchased from your brand.  The foundation of a brand’s personalization strategy should include both pre-purchase and post-purchase site visitors.

Engaging shoppers before checkout

Think about how visitors interact with your store. If they know exactly what they’re looking for, they’ll use the search bar to find it. If they have a more open mind as to what they might want to buy, they’ll use your menu options and category pages to browse through your products. And if they decide to go ahead with the purchase, they’ll then need to complete the checkout process.

Each of these areas — internal search results, menu options, category pages, product pages, and the checkout process — can and should be personalized to make the shopping experience more relevant to each visitor. 

Engaging customers after checkout

Whenever the customer returns to your site, you can present them with personalized language, imagery, offers, etc. based on their purchase history, which will in turn help you make more sales and increase CLV.

This is another reason why sales data is so important. Once you know what someone has ordered in the past, use this information to promote related products to them. And if someone orders a consumable product such as cosmetics or a food item, remind them to reorder whenever you expect them to run out.

Indeed, this is the key difference between pre-checkout and post-checkout ecommerce personalization. Before checkout, you want to edge new visitors closer to at least making some kind of engagement with your brand, such as opting in to your email newsletter or adding an item to their cart (a sale would be ideal, but shouldn’t be expected for a first-time visitor).

After checkout, you’ve got them on the hook — now, it’s all about maximizing the lifetime value of the customer.

Putting Strategy into Practice: Ecommerce Personalization Tactics

At this point, we’ve gone over the data you need and how to collect it as well as the high-level aspects of ecommerce personalization strategy. 

But what can you do, specifically, to make your ecommerce store more personalized?

Below, we’ll go through some practical tips and techniques that you can start using on your site right away. 

Onsite personalization

Here are the top ways to implement ecommerce personalization on your website:

Continuous shopping

You want to make the process for buying products on your store as easy as possible. Any friction at all could result in a lost sale.

With continuous shopping, a visitor’s selected items, options, and other preferences from a previous session will automatically be saved for whenever they return to your site. That way, they don’t need to jump through the hoops of completing those actions all over again — they can just pick up right where they left off. 

This is the default setting on most ecommerce platforms. But if your store is custom-built, you’ll need to make sure that you offer continuous shopping. 

Product recommendations

When it comes to improving your bottom line, few ecommerce personalization techniques are more potent than product recommendations. This particular tactic played a big part in Amazon growing into the trillion-dollar company that it is today. 

Your store might have hundreds, or even thousands, of different products available. You can’t expect visitors to sort through all of this on their own. Instead, use your data to make a highly informed guess as to what any given customer will be interested in (based on their purchase history, browsing history, the trends of other visitors who belong to the same demographics, etc.). 

Accurate product recommendations will show customers products they will likely want to buy that they otherwise wouldn’t have been aware of, thus allowing you to make sales you otherwise wouldn’t have been able to make.

Most ecommerce platforms have their own fairly advanced product recommendations engine. For example, Shopify’s Winter ‘23 update included AI-powered product recommendations, which use neural networks that learn from co-purchase data across all of Shopify — no historical purchase data is required. There are also a number of different apps available for adding product recommendations to your store, such as Barilliance and Rebuy.

Your homepage, product pages, and checkout page are all excellent places to showcase product recommendations.

Loyalty programs

As mentioned above, repeat customers are the most valuable type of visitor. If you want them to stick around, you should reward them for their loyalty. 

Many stores use a tiered system for such rewards. Sephora’s Beauty Insider program allows customers to unlock discounts, samples, and other benefits based on how much they spend on Sephora products each year.

You don’t need to only reward purchases — any action that you benefit from should be incentivized. Bon Bon Bon offers points for activities such as leaving a review and following the store on social media. Once enough points have been accrued, they can be redeemed for a discount. 

In addition to encouraging more purchases, setting up a similar loyalty program on your store will persuade more people to create an account, providing you with contact information and other valuable marketing data.

Live chat

Every store should have some sort of FAQ that visitors can reference to find answers to common questions. But no matter how thorough you are, there will always be some situations that aren’t covered in help center documents.

Ideally, you’ll be able to offer live chat support to the visitors on your website. Answering questions in real-time will allow you to quickly resolve any issues that might be standing in the way of a purchase. It also helps you form a personal relationship with customers and engenders brand loyalty.

But live support can be a considerable expense, of course. The next best thing would be to use an AI chatbot — the responses generated by these apps often aren’t quite as relevant or accurate as what would be produced by a knowledgeable human representative, but it’s still more personalized than a static FAQ. 

One app we recommend for this purpose is Chatso. In addition to automated responses to visitor questions, Chatso can produce AI-generated product recommendations and custom coupon codes, turning your live chat widget into a money-making machine.

Segmented experiences

You can even change the entire design of a page depending on the attributes of the visitor that landed on it. 

This is made possible with Shogun’s Targeted Experiences feature. 

Shogun allows you to create your own custom audience segments using conditions like geolocation, referring domain, URL parameters, and UTM tags. You have the ability to set up multiple conditions for the same segment, and in that case you’ll be able to decide if a visitor must meet all of the conditions or only one condition to be included in the segment.

Shogun’s visual editor makes it easy to design pages for a Shopify or BigCommerce storefront. You can create different variants of the same page — once you’ve set up a segment, you’ll be able to create a version of the page that is shown to only that segment and no one else.

There are many different ways to use this feature to improve the quality of your user experience and the effectiveness of your marketing campaigns, such as:

• Location-based design: Use local landmarks in site imagery and local references in text to form a closer connection with customers. Location may also determine which products would be best to promote (e.g., July is summer in the United States but winter in Australia, so a clothing store could promote bathing suits to American visitors while promoting coats to Australians on the same page).
• Seamless marketing campaigns: Create custom experiences for when you know exactly where a visitor is coming from (e.g., when traffic is coming from an influencer marketing campaign, the page design could include a picture of the influencer while everyone else still sees the default version). 
• Special offers: You may be able to provide certain offers to some visitors but not others. Targeted Experiences allow you to promote such offers to those who can access it while not mentioning it to those who can’t in order to avoid confusion (e.g., you may be able to offer free shipping domestically but not to foreign markets). 

Offsite personalization

When people aren’t on your website, there are still plenty of ways to reach out and continue providing a personalized experience:

Email

As mentioned above, you should be segmenting your visitors according to where they’re at on the customer journey. This will make your marketing emails more compelling, as you can send personalized messages like:

• Abandoned cart alerts: If someone ended their session with items left in their cart, they may have simply been distracted by something else before they had a chance to check out. In that case, a simple reminder via email just might do the trick. If that doesn’t work, you may be dealing with a bargain hunter. On your second try, a targeted discount may push them over the edge and convince them to complete the purchase.

• Post-purchase followups: It’s standard ecommerce procedure to follow up on a customer’s purchase with order and shipping updates. But that’s not the only way to follow up. You can also send an email recommending products that complement what they purchased (e.g., helmets, bike locks, and similar accessories if they bought a bike from you) in order to increase CLV.
• “We miss you”: If a once-loyal customer hasn’t placed an order in an unusually long time based on their purchase history, send them a reminder that highlights the types of products they used to buy from you. Hopefully, this will get them back into the habit of using your store. You should consider offering a targeted discount as an extra incentive here, too.

Including the visitor’s name in the subject line of the email will improve the odds that they’ll open it by 20%. 

SMS

Whenever customers create an account on your site or place an order, this provides you with an opportunity to collect their phone number, giving you another way to reach them with personalized messages. 

Most of the major email marketing platforms offer features for SMS marketing as well. For example, Klaviyo offers AI-assisted text writing, A/B testing, and in-depth analytics. It can also help you personalize your texts by predicting customer attributes, and there are compliance features for ensuring you only send messages to those who have opted in to receiving them, allowing you to avoid the consequences of violating data privacy regulations.

Push notifications

Yet another way to reach customers is through push notifications. Since 2017, the majority of web traffic has come from mobile phones. You are more likely to catch a customer’s attention on this type of device than any other. 

Indeed, push notifications are especially effective at grabbing attention, as they pop up regardless of which app the visitor happens to be using. Just don’t go overboard with this technique, or you’ll risk damaging your brand and annoying customers to the point where they decide to stop shopping on your store. 

Retargeting ads

Even if you don’t have their contact information, you can still send personalized messages to people by using retargeting ads.

Whenever someone visits your site, your web server will send their browser small pieces of data known as “cookies”, which are used to track and store information. With the help of cookies, you can pay for ads on platforms such as Google and Facebook that are only shown to people who have previously interacted with your brand before — this practice is known as retargeting or remarketing (cookies are how continuous shopping works, too).

For example, if you have an issue with anonymous visitors often adding items to their cart but leaving before they check out, you could set up an ad on Google reminding them to complete their order.

While retargeting ads are more expensive than sending an email or SMS, the potential reward of completing transactions and gaining long-term, repeat customers is well worth the cost.

Building sustainable ecommerce personalization tactics today can ultimately mean boosting your bottom line over time.

The more shoppers who engage with personalized recommendations, the higher your conversion rate.

It’s been seen that 37% of shoppers who engaged with a personalized recommendation during their first visit to a site returned again.

What’s more, purchases made from product recommendations saw a 10% higher AOV than purchases where customers did not engage.

That said, let’s look at a few ecommerce personalization examples from top brands:

1. Bring the in-store shopping experience online: rag & bone

Premium clothing brand, rag & bone, recreate their in-store shopping experience online via virtual shopping using Klarna:

Online shoppers book appointments with store associates and connect via text, chat, or video.

Store associates take customers through the physical store while shoppers ask questions.

This 1:1 experience allows rag & bone to connect with customers and offer a tailored shopping experience based on their unique style and budget.

Using ecommerce personalization software to facilitate their virtual shopping offering has helped rag & bone boost their conversion rate by 20.3% and has yielded an average order value of $292.

2. Use video to engage and assist customers: Omsom

Asian food brand, Omsom, takes personalization to a new level with informative video messages.

When customers first land on the Omsom website, they’re greeted with a message from one of the founders.

From there, in a choose-you-own-adventure way, customers can learn more about their products, get to know the brand, or get help choosing products to try.

This is a great way to not only put your best foot forward with customers but to educate them about your brand and products, so they find exactly what they’re looking for every time they visit your site.

Omsom uses ecommerce personalization software, Tolstoy, to add this video sequence to their site.

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3. Data-fueled product recommendations: Uniqlo

Uniqlo, a Japanese casual wear brand, leverages location data to offer product recommendations in an email:

This email not only segments customers by location to ensure tailored content but includes product recommendations based on the local weather.

Personalized tactics like this can branch into other efforts, like video content and influencer partnerships.

For example, Uniqlo can collaborate with an Instagram influencer who lives in a city they’re trying to reach and come up with content specifically for that audience.

Or Uniqlo could use personalization software like Optimizely to learn what customers in different regions (like sunny southern California or rainy Seattle) are clicking on most to create the best possible shopping experience.

4. Up-selling while shopping: Dermalogica

A big part of what makes skincare brand Dermalogica unique is their in-store experience where customers try products per recommendations of a pro skincare consultant.

The brand wanted to take this experience online, so they launched a series of personalization tactics using Nosto to facilitate this interaction.

With Nosto’s Dynamic Bundles feature, Dermalogica.com recommends products that complement the product a customer is currently viewing, helping shoppers complete their regimen.

This contributed to Dermalogica’s 6.93% improvement in average order value.

Ecommerce Personalization FAQs

How does personalization affect ecommerce?

Personalization allows ecommerce merchants to offer marketing campaigns and shopping experiences that are more relevant and effective. A number of studies have shown that this leads to improved customer loyalty, increased conversion rates, and many other benefits. 

How important is personalization in ecommerce?

The top priority for any ecommerce store is to generate as much revenue as possible, and personalization has proven to be one of the best methods for accomplishing this task. If you’re not taking advantage of personalization, you’re leaving a lot of money on the table.

How does personalization work in ecommerce?

The first step of ecommerce personalization is to collect information about the people who visit your store. You can do this by looking at sales data and web analytics as well as conducting your own quizzes, surveys, and interviews. With this information, you’ll then be able to break your general audience up into separate segments and pursue the most persuasive marketing strategies for each segment.  

What is the difference between personalization and customization in ecommerce?

Personalization involves sending tailored marketing messages and displaying alternate versions of your website according to the needs and preferences of different types of visitors — the visitor doesn’t need to do anything on their end to experience the personalization. Customization involves giving visitors different options to choose from for your products, such as sizes, colors, materials, and add-on features. 

What role does AI have in ecommerce personalization?

Ecommerce personalization gets more difficult the more your online store grows. By automating the creation of content such as email copy and chat responses, AI allows you to keep offering a high level of personalization even as you continue to scale up. AI is also better than humans at sifting through large sets of data and detecting patterns, helping you discover new ways to segment your audience and how to best serve each segment.