Personalization is Approaching Mainstream, Yet Challenges Lay Ahead

Companies such as Amazon.com, Netflix and Spotify have shown us that personalized digital experiences are the way of the future, but it's becoming harder and harder to grab consumer attention. In fact, a recent study from Microsoft found that humans have an attention span of around eight seconds (shorter than that of a goldfish), thanks to all the different messages vying for our attention.

Consequently, guiding shoppers toward products they're interested in as soon as they land on your site is critical. In this way, personalization tactics help lead to increased conversions, average order values and customer loyalty for those that make use of them.

At Evergage, we recently conducted our annual study on trends and the state of personalization. Conducted in partnership with Researchscape International, the survey compiled responses from 250 digital marketers at organizations of all sizes. Here are some findings and their implications for retailers:

Approaching Mainstream Usage
Eighty-five percent of marketers say they're using personalization in at least one channel, and 55 percent of those who haven't yet deployed personalization plan to use it within the next year. Meanwhile, 74 percent of marketers using personalization rate it as an “extremely” or “very important” initiative. This ranks personalization just below other key marketing initiatives such as SEO and email marketing.

As such, personalization is no longer a tactic that can be used sparingly within retail marketing strategies. As it approaches the mainstream, it will become even more critical for connecting and engaging with prospects and customers in any channel. One retailer, Gardener’s Supply Company, is a great example of this. It started leveraging personalization by presenting a simple campaign with relevant messages on its homepage based on a visitor’s referring source. Now, personalization has become a key piece of its overall marketing strategy for increasing conversions and engaging visitors across its site, with one campaign resulting in an 11 percent lift in order completions.

Yet Retailers Are Frustrated
When asked to grade their personalization efforts, more than half of marketers (55 percent) gave themselves a “C” or worse. And when asked if they feel confident that they have the tools they need to implement effective personalization, only 42 percent said they were “very” or “extremely” confident.

It’s no wonder retailers experience frustration, as they’re typically reliant on multiple solutions for A/B testing, recommendations, cart abandonment, on-site search, analytics and more. These separate solutions create silos, dividing personalization data and solution management across multiple teams and making it harder to implement effective personalization programs, measure them and respond in the moment.

Retailers that are able to combine visitor data from multiple systems and instantly use it to create personalized experiences for their websites, mobile apps, email campaigns, etc., are best positioned for success.

Most Important Criteria Are Often Ignored
When asked what criteria is used for personalization, respondents listed pages viewed, geolocation, browsing behavior and demographics as the most popular. Meanwhile, persona profiles, individual preferences, intent and time on site were used the least.

Yet uncovering an individual’s preferences and actual intent in each session is critical to providing the most relevant experience possible, and time on site is a key factor in this determination. For example, if a shopper views two product pages once each, a retailer that's only considering page views will treat each of those products equally — and will factor only that data into its personalized experiences and recommendations.

However, it’s important to look further: If the shopper spends two minutes engaging with the first product page (e.g., reading reviews, clicking through pictures, etc.) and immediately abandons the second product page, that shopper is clearly more interested in the first item.

Understanding a shopper’s intent in real time and going deeper than simple page views is a huge opportunity for retailers to create better, more tailored experiences.

Looking Ahead
This year’s study has shown us that the use of personalization is growing, but there are still many opportunities for retailers to tap into personalization in new ways, dig deeper into their initiatives and fine-tune their tactics to get ahead and generate even better results.

Paula Crerar is vice president of content marketing and programs at Evergage, which provides real-time personalization to more than 1 billion web visitors.