E-commerce is growing exponentially. But there is one big issue for retailers: Shopping online is usually not that personal. If retailers want to succeed and stay ahead of their competitors, they should focus on changing this as soon as possible
E-commerce is booming in Germany. Whilst turnover in 2015 was still around 40 billion euros, this year it has already risen to around 58 billion euros. However, the fact that the sales figures are so positive should not make online retailers complacent. This makes it all the more important for online merchants to stand out from their competition and meet the wishes of their customers. But how can they do this? Personalisation! When it comes to online shopping, customers want to receive the same level of support they expect from offline retailers. Not so easy at all. Online retailers therefore need to prioritise personalisation strategies in the near future.
Sales in online trading are rising steadily. (Source: HDE / Statista)
Why is personalisation so important?
Customers often know exactly what they want and can easily search for their desired product online. But this is not always the case. Many customers do not know exactly what they are looking for or want to be inspired when shopping. With the internet offering an abundance of products on the internet, it is becoming increasingly difficult to find the right product that matches the customer’s needs. Indeed, the products offered online usually outnumber those in a physical store. It is therefore extremely important that the online retailer knows exactly what the customer wants and is able to suggest these products at the right time. For this reason, the topic of personalisation is key. A good strategy means that offers are automatically or semi-automatically displayed to the customer. But do online retailers actually do this?
For about 45 percent of online retailers, personalization is an issue. (Source: Internet World Business / Statista)
Personalisation in online retail – status quo
From personalised customer approaches to individual product suggestions – the possibilities are tenfold. But how far has personalisation progressed in online retailing so far? Are online retailers doing enough yet? When it comes to personalisation, there is certainly still some catching up to do. According to a survey by Internet World Business, only about 45 percent of the German e-commerce retailers surveyed are prioritising the topic of personalisation. For around 13 percent, the topic is not even in the pipeline. When it comes to personalisation and customer loyalty, Amazon is at the top of the list. Through sale days, such as the Amazon Prime Days or Black Friday, as well as subscription models such as Amazon Prime, customers can benefit from a personal and diverse offer. But that’s not all: Amazon usually knows exactly what its customers want before they know it themselves. Sentences like „You might like that too“ or „People who bought the product also bought this product“ are the norm there.
Amazon suggests other similar items for already searched products. (Source: Amazon)
More personalisation in online retail
The success of Amazon means that other retailers must adapt to the trend as quickly as possible. There are several ways to drive personalisation.
Establishing personal customer communication
Online shoppers like to be looked after personally – even after the order has been placed. Those who communicate with the customer should do so as personalised as possible. The appreciation conveyed via personal messages benefits customer loyalty (sooner or later). Those who send their customers mailings, such as newsletters or discount campaigns, should always link this with personalisation. What does that mean? This should go beyond a personal approach to the customer. Usually this is related to where the customer is in the funnel. Are they a new or long-standing customer? New customers are lured, for example, by personal discount campaigns. Loyalty campaigns or small thank-you gifts are a suitable option for existing customers.
What many retailers often do not consider is that personal communication should not end by clicking the „Buy“ button. Those retailers that stop communicating with their customers are at risk of their customers going to their competitors. In order to keep their customers engaged, online retailers should not simply hand over shipping communication blindly to the delivery carrier, but instead take control back of this part of the customer journey. ParcelLab’s E-Commerce Shipping Study 2019 shows that there is still some way to go.
Use Recommendation Engines
This is one of the tools that makes Amazon so successful. New products, matching additional offers, top sellers and much more – these can be adapted to the needs and wishes of the customers. In the future, personalised product offers should be present everywhere in e-commerce, because they are definitely one of the most important trends in 2019. However, anyone who decides to use recommendation engines should definitely pay attention to correct application. Offering outdated or inappropriate products is not well received by customers. Recommendations are particularly effective if they are placed on homepages, product pages or at checkout.
Anyone who has not yet prioritised personalisation should do so as soon as possible. It is not that difficult to convey a good feeling and appreciation to the customer. E-commerce is growing steadily. For this reason, retailers must try to stand out from their competitors. There are now a number of ways that online retailers can personalise their products. If, for example, you start with personal customer communication – even beyond the ordering process – you are already doing things right.