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Here are 5 ways to improve your ROI in 2024! By early 2021 it was clear that the way most eCommerce businesses were looking at growth was simply not sustainable. Too many retailers had focused on customer acquisition as their primary strategy for growth. This had led to spiraling Customer Acquisition Costs (CAC) and by mid 2020, the inevitable happened: CAC started outpacing Customer Lifetime Value (CLV).
New customers spent 67% less than returning customers, and on an average only 25-30% of them returned. The numbers just did not add up.
This led to a renewed commitment to customer retention and building brand loyalty. Online customer experiences became a priority for retailers. According to BCG, leading retailers invested close to 1% of their revenues into building personalized experiences for their shoppers.
So why did Gartner Inc publish a report in December 2019, stating that 80% of all ecommerce personalization efforts will fail by 2025 due to lack of ROI?
Over the last 4 years, Vue.ai has worked with over a hundred of the largest and most innovative retailers from across the globe and across formats, helping them focus on building online customer experiences and optimize their personalization strategies. We have played the role of consultant to many more. And the results speak for themselves – We have consistently seen a significant uplift in revenues within months of implementing ecommerce personalization. But in order for retailers to taste success, they must adhere to a few basic principles.
Too many ecommerce personalization solutions simply use data that is provided by a retailer. If the data is bad, any personalization is going to be ineffective. Too many personalization engine are little more than CRM solutions. Robust AI solutions enhance and generate data about a retailer’s products as well as customers.
Every customer is looking for a shopping experience that is relevant to them. There is enough data that points to this. When personalization efforts are limited to creating customer segments and forcing them down pre-decided journeys, they will do little to impact business. This is one of the reasons collaborative filtering is ineffective. For ecommerce personalization to work, retailers need to be able to identify every individual shopper’s preferences for a range of attributes and show them content that they will love. Personalization must have context. Retailers need to be able to alter content, based on every individual shopper’s preferences and intent, real-time.
For personalization to show a significant uplift in revenues, retailers need to go beyond transactions and look at the entire journey of a shopper. Personalized content needs to match purchase intent. Content shown needs to encourage a purchase and not distract them from making one. Similarly identifying stages at which shoppers drop off and placing personalized content at those touchpoints is very powerful.
Generic out-of-the-box retail personalization solutions that don’t allow a company to add business rules and customizations to reflect their business models and brand story do not have sustained impact. At the end of the day, iconic brands are made from the stories they tell and the connections they make that are unique to them.
Retailers that have the greatest impact from personalization are those that have built a culture of innovation. Personalization solutions need to allow retailers to easily create and test journeys till they find ones that work.
Our newest product, that is, personalization solution is designed to be a single powerful tool to help retailers tap into AI to perform the superhuman task of balancing customer expectations with business realities.
Vue.ai helps retailers harness the power of Visual AI to allow them to go beyond transactions and build immersive customer experiences that are so remarkable, they define the brand.
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