Getting up close and e‑personal

In most high-street stores, the best shop assis­tants are the ones who size you up and tai­lor their sales pitch. They know your habits through basic pro­fil­ing, your needs with a few ques­tions and your desires as they observe you brows­ing in-store. Now, this per­son­al approach to retail is fast matur­ing on the web.

“In the past, retail­ers asked ‘Will my cus­tomers vis­it us online?’ Today, the ques­tion is ‘How can I get cus­tomers to shop more online with me and not with my com­pe­ti­tion?’ The answer is per­son­al­i­sa­tion,” says John Raap, chief com­mer­cial offi­cer at Fred­hop­per, a glob­al leader in on-site search, mer­chan­dis­ing and per­son­al­i­sa­tion.

The glob­al e‑commerce land­scape is con­tin­u­ing to evolve rapid­ly with retail­ers eager to mim­ic bricks-and-mor­tar expe­ri­ences in their online stores. This involves the right blend of on-site search and mer­chan­dis­ing. Togeth­er, they can help mim­ic the in-store expe­ri­ence of prod­uct place­ment, con­ve­nient shop­ping and check­out expe­ri­ences, as well as brand con­sis­ten­cy.

“Retail­ers are being chal­lenged to come up with new ways to retain cus­tomers and ensure brand loy­al­ty online. Offer­ing per­son­al­i­sa­tion is the next nat­ur­al evo­lu­tion that will enhance cur­rent mer­chan­dis­ing strate­gies,” explains Mr Raap, whose com­pa­ny Fred­hop­per works with more than 200 retail brands glob­al­ly, includ­ing Thomas Cook, Deben­hams and Asos.

“When you add that lit­tle extra touch, your cus­tomers notice and respond, so by offer­ing a more cus­tomised expe­ri­ence, each shop­per will feel as though your brand is made just for them.

“Retail­ers that want to excel online must always first ensure their search and mer­chan­dis­ing are opti­mised, con­stant­ly updat­ed and refreshed.”

The next fron­tier is adap­tive per­son­al­i­sa­tion, where the online retail­er cus­tomis­es the shop­ping expe­ri­ence on the fly

Then the smartest retail­ers will use big data, cou­pled with the lat­est tech­nol­o­gy, to find new ways to make every shop­ping expe­ri­ence per­son­al. This strat­e­gy goes beyond sim­ply remem­ber­ing a pre­vi­ous shop­ping trip and offer­ing up some­thing sim­i­lar.

“Cur­rent per­son­al­i­sa­tion tech­niques are based on algo­rithms and are usu­al­ly applied to rec­om­men­da­tions on prod­uct detail pages or some land­ing pages,” Mr Raap con­tin­ues. “But an aver­age of 70 per cent of all retail site traf­fic takes place on search result, nav­i­ga­tion and cat­e­go­ry pages. This is the kind of real estate where intu­itive, less obvi­ous per­son­al­i­sa­tion can real­ly take effect.”

Many retail­ers talk about offer­ing a per­son­alised ser­vice, but in real­i­ty most e‑commerce sites just apply seg­men­ta­tion. Group­ing shop­pers into var­i­ous types and then offer­ing items which might appeal to that spe­cif­ic demo­graph­ic.

“Retail­ers will need to invest more in advanced per­son­al­i­sa­tion that is more intu­itive and gran­u­lar. It’s not just a mat­ter of turn­ing per­son­al­i­sa­tion on and off. Com­pa­nies will need to per­son­alise a spe­cif­ic row or even a sin­gle prod­uct in their search or nav­i­ga­tion pages to appeal to each spe­cif­ic cus­tomer,” says Mr Raap.

The next fron­tier is adap­tive per­son­al­i­sa­tion, where the online retail­er cus­tomis­es the shop­ping expe­ri­ence on the fly. This is based on behav­iour and study­ing click-through pat­terns, as well as real-time activ­i­ty rather than past pur­chas­es.

“A shop­per may be look­ing for dress­es for his girl­friend dur­ing his last vis­it. But this time, he’s shop­ping for jeans for him­self. Advanced algo­rithms can spot the dif­fer­ence and act,” Mr Raap explains. “But for the best effect, retail­ers should blend cur­rent behav­iour with more sta­t­ic cus­tomer data from pre­vi­ous pur­chas­es, like colour affini­ties, sizes or birth­days.”

There are no doubts in the retail indus­try that strate­gies which deliv­er the right mes­sage, at the right time, on the right chan­nel will be suc­cess­ful in the e‑commerce mar­ket­place. Think of walk­ing into a phys­i­cal shop and the “new arrivals” shelf is per­son­alised just for you. Stan­dard mer­chan­dis­ing can take care of the rest of the shelves. Per­son­al­i­sa­tion has already done its job.

“How­ev­er, there are chal­lenges. Per­son­al­i­sa­tion is dif­fer­ent for every retail­er. You must first know what your cus­tomer wants before you can deliv­er what they need. There are also dif­fer­ent kinds of per­son­al­i­sa­tion for dif­fer­ent lev­els of inter­ac­tion. It’s impor­tant to get the right for­mu­la for your brand,” says Mr Raap.

“Cus­tomers often don’t log in until they are ready to check out. So it is impor­tant to find per­son­al­i­sa­tion tech­niques that work around anony­mous shop­pers or encour­age shop­pers to sign in soon­er.”

Off-the-shelf tech­nol­o­gy can­not deal with this type of per­son­al­i­sa­tion. You also will not find your solu­tion by copy­ing oth­er retail­ers. What you need instead is to col­lect and analyse large amounts of cus­tomer data to dis­cov­er what is real­ly rel­e­vant, analyse it and apply machine-learn­ing.

“Small, incre­men­tal per­son­al­i­sa­tion efforts and accom­pa­ny­ing A/B test­ing can help to deter­mine what works best for your audi­ence. It will also help you to col­lect more data. You’ll learn a lot sim­ply through prac­tice,” explains Mr Raap.

App users are a cap­tive audi­ence since they are always logged on and they are hap­py to share data. The mobile mar­ket­place is there­fore a great prov­ing ground to test per­son­al­i­sa­tion tech­niques. Online shop­pers are some­times hap­py to give up some data if the retail­er pro­vides a nice incen­tive, such as a dis­count or reward.

“But be care­ful about the kind of per­son­al­i­sa­tion you apply to mobile,” Mr Raap warns. “Stan­dard, out-of-the-box per­son­al­i­sa­tion tends to fall away on the mobile inter­face. There’s sim­ply not enough real estate to sup­port rec­om­men­da­tions. This is where search and nav­i­ga­tion per­son­al­i­sa­tion is cru­cial.”

There is no end-game for search, mer­chan­dis­ing or per­son­al­i­sa­tion. All three are con­stant­ly chang­ing and all three can always be opti­mised fur­ther. “The key is to get start­ed and keep work­ing. Soon, you’ll dis­cov­er the best time, place and amount of per­son­al­i­sa­tion for your audi­ence,” Mr Raap advis­es.

Fred­hop­per is at the fore­front of on-site search, nav­i­ga­tion, mer­chan­dis­ing and per­son­al­i­sa­tion. And is work­ing with lead­ing retail­ers and brands in a bid to improve the online expe­ri­ence and help e‑commerce providers achieve bet­ter con­ver­sion rates.

“As e‑commerce matures, we find retail­ers need to fight for every pur­chase and have to focus more on retain­ing cus­tomers than grow­ing their cus­tomer base. To deal with this new real­i­ty, retail­ers need new strate­gies and tech­nolo­gies,” Mr Raap con­cludes.

For more infor­ma­tion please vis­it www.fredhopper.com