Personalization Glossary

A/B testing? Recommendation models? The personalization engine space uses several acronyms that may seem daunting, so we're here to help. You can find definitions to the most common e-commerce customer experience optimization terms here!

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eCommerce Personalization

eCommerce Personalization is the delivery of personal experiences to every user by dynamically showing content, product recommendations, and specific offers unique to each individual. This type of personalization is based on previous actions, browsing behavior, purchase history, demographics, and other customer data.

From Gartner’s definition of personalization, it is a process that creates a relevant, individualized interaction between two parties designed to enhance the recipient’s experience. Smart Insights says that “63% of consumers will stop buying from brands that use poor personalization tactics.” Personalization is a crucial aspect of e-commerce today, as it has been shown to impact customer engagement and sales significantly. 

eCommerce Personalization Benefits 

Improved customer experience: Personalization helps create a more engaging and relevant shopping experience for the customer. By tailoring product recommendations and offers to shoppers’ interests and preferences, customers are more likely to find what they want, leading to increased satisfaction and loyalty.

Increased conversions: By presenting customers with personalized offers and recommendations, eCommerce personalization can increase the likelihood of a customer purchasing. Accordingly to Smarter HQ, 72% of consumers say they only engage with personalized messaging. The offer of personalized content can lead to increased sales and revenue!

Reduced bounce rate: ai product recommendations can help keep shoppers on the site longer, reducing the likelihood of them leaving without purchasing. Personalization platform can improve the site’s bounce rate and help retain customers.

Better customer insights: By tracking customer behavior and preferences,  personalization engine can help eCommerce sites gain valuable insights into their customer base. More than 50% of consumers are willing to share information on products they like to get personalized discounts, according to Retail TouchPoints. This informs marketing and product development strategies, leading to more effective campaigns and product offerings.

How does eCommerce personalization make a difference?

With an extensive catalog and a vast array of products, retailers often find it difficult to provide exactly what the shopper wants. This leads to increased bounce rates and abandoned journeys. A shopper may search for a ‘lilac dress’ and get no relevant results. As a result, the shopper might leave the site.

The retailer lost a customer despite having a range of relevant products that may have just been tagged “purple.” Incidents like this lead to a poor experience and the shopper abandoning the site.

As a retailer, quick product discovery is imperative. This is where an optimized AI-powered site search solution can help. Unless a customer can find a product they want to buy, no amount of traffic or conversion optimization will be able to drive revenue. 

Overall, eCommerce personalization can be a powerful tool for improving the customer experience, increasing sales, and gaining valuable insights into customer behavior.

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