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THE M_SSED OPPORTUN_TY

REAL-TIME INTELLIGENT PERSONALIZATION

From the Editors of Internet Retailer

MOST RETA_LERS HAVE YET TO DEL_VER.

Consumers say they want personalized shopping experiences.

2Real-Time Intelligent Personalization: The Missed Opportunity

E-COMMERCE THOUGHT LEADERSHIP

WHY RETAILERS NEED TO DO A BETTER JOB OF ONLINE PERSONALIZATION

No pointing to the right cocktail dress hanging on the rack in

the back. And the lack of guidance online has the potential to

leave a shopper clicking around aimlessly. If merchants can’t hit

the bull’s-eye relatively quickly through suggested products or

relevant search results, that can translate into lost dollars for

companies as consumers grow impatient and navigate away

from their sites.

That gap between in-store and online shopping trips has given

rise to digital personalization experts, who work at understanding

and influencing customer intent by using technology that

determines what a particular customer should see.

“It can’t just be about creating a digital catalog anymore.

Now, retailers need to design a connected brand experience—

and a more intuitive one,” says Amede Hungerford, Chief

Marketing Officer for personalization vendor Reflektion.

“Personalization’s goal is to create the most engaging and

relevant moment for shoppers at a given point of engagement.”

Too many retailers rely on basic strategies in real-time that

broadly target a customer based on census data, like making

educated guesses as to what a 25-year-old female city dweller

would buy as opposed to a 67-year-old male suburbanite.

Yet in today’s retail landscape, individual shopping behavior

not demographic makeup, or “segment”—should dictate how

products with the best-matched = characteristics are served

up to online shoppers, experts say.

Consumers want retailers to customize their digital store

experience. They respond by opening their wallets when

businesses do. But merchants aren’t doing enough of it.

In fact, based on the results of an Internet Retailer study of the

top 100 retailers as ranked by their web sales, only 39% offered

suggested products that were personalized on their home pages

after shoppers browsed the site, providing clues about their

tastes. Just 15.5% used a shopper’s preferred characteristics in

search recommendations by autopopulating the right color, cut,

size or brand. And less than half of the merchants sent email

reminders to customers who added an item to the cart but didn’t

finish checking out. The findings outlined in this report show

that online retailers aren’t yet grasping the more evolved ways

that they can reach shoppers—who increasingly demand that

businesses know them personally—and close sales.

Reflektion tracks historical and in-session data by collecting

information like clicks, add to carts, searches and past

purchases. Then algorithms allow a site to immediately react

to real-time browsing and help refine and prioritize home page

picks and search results accordingly.

“Brands aren’t doing a solid job at digital personalization in the

richest data-driven environment we’ve ever seen,” Hungerford

says. “It’s an era of retailers being challenged economically,

and this is leaving hundreds of millions of dollars in incremental

revenue on the floor.

“In defense of retailers… it’s not a matter of ignorance but of

bandwidth,” he adds. “But offering an intimate online interaction

for the consumer is so necessary.”

By utilizing more advanced personalization techniques, retailers

see bumps in site traffic, conversion rates and revenue. Here’s

what Hungerford says merchants should do to get there ...

For an online shopper, there is no salesperson waiting at the door to ask what brings her in today. No fact-finding mission from a store associate to determine a size, occasion, gift recipient or price point.


REFLEKTION’S PERSONALIZATION TO-DO LIST FOR RETAILERS

Retailers who take note of the lackluster performance of top e-commerce players in this report and do a better job of solving the personalization equation will stay a few steps ahead of competitors.

LEVERAGE SEARCH TOOLS

Results are too volumnious for

consumers to wade through on

their own, but they’re left with the

overwhelming job of finding what

they’re looking for. It’s a missed

opportunity when site search

functions like dictionary/thesaurus

lookup. It should be much more like

walking up to a store associate with

a request for guidance.

THINK INTELLIGENT PRODUCT RECOM-MENDATIONS

When shoppers visit your site, they

want to quickly discover products

that match their interests and

shopping intent. This needs to

happen across the entire shopper

journey - be it the home page,

a category page, product detail page

or the checkout page. Leveraging

this product intelligence is crucial

for boosting conversions.

PERSONALIZE EMAILS AND OMNI-CHANNEL EFFORTS

This really isn’t pie-in-the-sky

stuff. Emails should be tailored to

customers on a deeper level. And

clienteling needs to be unified for

the store and online experience.


DIGITAL PERSONALIZATION: THE MISSED OPPORTUNITY

But an Internet Retailer study shows fewer than half of the top

100 online retailers have mastered basic tenets of personalization,

and an even smaller number use more advanced techniques.

Online retailers have a long way to go if they are going to deliver

on their promise of giving consumers what they say they want

when shopping online: In an exclusive Internet Retailer consumer

survey, nearly half of respondents said it’s important for retailers

to consider their browsing history and online purchases when

customizing marketing for them.

That’s a big miss, given the ample evidence thatpersonalization—

when executed effectively—can result in big increases to

conversion rates, average order sizes and page views.

“[Site personalization] is now at mass criticality,” says Brita

Turner Fielding, the e-commerce director at Godiva Chocolatier

who has helped execute a personalization strategy that has

boosted Godiva’s site conversion by 24%.“Much like online

ratings and reviews, personalized web content is a foundational

piece that just can’t be marginalized.”

The fact that top merchants are struggling with personalization

could be good news for many small and mid-sized online

retailers, as it gives them the opportunity to leapfrog bigger

rivals when it comes to delighting customers and potentially

tip brand loyalty in their favor.

Internet Retailer collected and analyzed data on the top 100 online

retailers by visiting each of their e-commerce sites three times,

including once on a mobile device. Here are the key findings:

1. Retailers are not tailoring “recommended products” to consumers

effectively. Only about four in every 10 e-retailers suggested

relevant products on their home pages that were updated based

on a shopper’s browsing behavior.

2. Retailers are not remembering consumers’ preferences. One-

third of retailers presented targeted home page suggestions for

relevant products to a returning shopper before the shopper

logged in during a second site visit. The number still was less

than half even after logging in.

3. Retailers are not properly tracking consumers when they shop

across multiple devices. Just 17% of home pages on retailers’

mobile sites featured personalized product suggestions based on

a shopper’s browsing behavior from two prior desktop site visits

even when the user was logged into the same account

4. Site search capabilities are limited. The vast majority of retailers

relied heavily on basic keyword terms to itemize search results

and didn’t accurately prioritize them based on a shopper’s

expressed interests and preferences via browsing behavior.

One-third of retailers’ search bars utilized visuals with product

thumbnails in suggested results as a shopper typed a query.

5. Retailers are not following up enough with consumers who visit

their site but don’t buy. One-quarter of retailers sent shoppers

a site-abandonment email after a visitor viewed products but

ended the session without buying. Just under half of retailers sent

shoppers a cart-abandonment email after a visitor added an item

to their shopping cart but didn’t complete the purchase. And the

content of these engagement messages largely focused only on the

single act of cart abandonment rather than prompting other calls

to action based on individually relevant behaviors.

This study serves as a report card of sorts. We will look at

how effectively top online merchants are using personalization

in several areas: recommended products on the home page,

site-search intelligence, related product suggestions, shopper

memory from one visit to another and email retargeting

campaigns. We will compare the current personalization tactics

being used by top online retailers with what consumers say they

want, based on an Internet Retailer survey. And we will spotlight

best practices from some retailers who have a firm grasp on

techniques and are seeing results.

Personalization has been one of those buzzwords in online retail for years now, with many e-retail executives talking about the importance of promoting products and offers to each shopper uniquely tailored to her preferences.


PERSONAL_ZATION STRATEGIES WORK, BUT SURPR_SINGLY FEW RETA_LERS USE THEM. EVEN FEWER DO _T WELL.

TAKEAWAY


PERSONALIZATION

SPOTLIGHT

PROBLEM

How to make online shoppers feel as though the chocolatier

knows them personally?

BACKGROUND

In a Godiva boutique, customers don’t have to hunt around

and help themselves. Staff members are on hand to glean

information and guide a purchase. But Godiva’s small

e-commerce team was manually slotting static product

recommendations for the website, which were “not

reactionary whatsoever” to a shopper’s browsing behavior

and rarely updated, says e-commerce director Brita Turner

Fielding. She wanted Godiva.com to replicate that intimate

in-store experience.

“Personalization is even more important in the premium

luxury market,” Turner Fielding says. “If a customer is walking

into The Ritz-Carlton or a Mercedes Benz dealership, they

expect you to know who they are and why they are there—and

not in a generic demographic way. Godiva has the same level

of expectation. You can’t just be viewed as a female gift-giver.”

SOLUTION

For a more intuitive and responsive answer, she turned

to Reflektion, a software company that developed a

personalization platform for Godiva that leverages historical

and in-session data to determine customer intent. Rather than

suggesting products or ordering site search results based on

what all customers are buying, the new automated process

went the more individualized route.

Now, after three clicks, the site’s algorithm updates the

“Selected for you” widget to reflect a shopper’s clicks during

her current session, recognizing that her interests might be

different this week than last.

24%Conversion lift, according to an A/B test that compared the new system to Godiva’s previ

28%+Bump in tablet conversion

4%Increase in revenue per visit

26%Click-through rate on preview search

23%Site visits that ended in a sale engaged with a website element created by Reflektion

19%Site visits ending in a sale engaged with a recommended product that was selected based on Reflektion’s individualized algorithm that took into account on-site browsing behavior

18%Orders have engaged with preview search, or search results that populate with product image thumbnails


PERSONALIZATION GLOSSARY

SUCCESS STORY

INDIVIDUALIZATION

SEGMENTATIONSegmentation-based approaches rely on broad averages

within demographic segments and don’t address

inconsistent behaviors very well. If a retailer collects

basic demographic information on Jane Smith and

determines she is a woman in the 26-34 age range with

a $75,000+ income, it makes assumptions based on what

others in her group have purchased. In the retailer’s

mind, she is likely to buy blazers with trendy boots for

work or boho ensembles for outdoor music festivals.

Individualization-based approaches personalize

shoppers at an individual level and identify distinct

qualities and preferences. If a retailer pays more

attention to Jane Smith’s personal click-throughs and

previous purchases than her demographic, it would

discover that she is an avid hiker who frequently needs

to replace her worn boots and has recently developed

an addiction to garden planters and an affinity for red

windbreaker jackets. She is a very different shopper than

her overgeneralized “segment” would suggest. With

a deeper dive into available data, a retailer can better

understand a particular shopper and what she wants. Marmot, a retailer of performance clothing and equipment, sought out real-time individualized personalization techniques and saw a 13% increase in its conversion rate with Reflektion’s help.

13% INCREASE INCONVERSIONRATE


Home page carousel sections are prime real estate for curated collections that speak to shoppers’ individual sensibilities.

RECOMMEND PRODUCTS ON THE HOME PAGE

So most online retailers seize the opportunity to draw shoppers

in by highlighting standout goodies and sale spotlights, in addition

to a blueprint by category of the site’s offerings. Some do this with

visual campaigns using images that are similar to magazine ads, and

these typically are more static elements that don’t switch out with

other images. But most e-commerce sites—and 60% of the top 100

retailers—employ rotating carousels of featured products.

Whatever the variation—bestsellers, customers’ top picks, top-rated

items, new arrivals or trending products—these home page carousel

sections are prime real estate for curated collections that speak to

shoppers’ individual sensibilities. Once personalized data is amassed

as a visitor clicks around the site, the product recommendations

should refresh based on new insight from the shopper’s clicks. In

some cases, even the section headers may change to draw attention

to the updated selection—a site’s more generic trending products rail

is replaced entirely with one listing specific items recommendations

for the shopper, who is now more familiar to algorithms, for

example. Sites studied by Internet Retailer expressed this using a

variety of phrases: “Items you may be interested in,” “Folks like you

also viewed,” “Just for you,” “Items you’ll love,” “Customers

with similar style viewed” and the very literal “Inspired by your

browsing history.”

But only 39% of retailers offered recommended products on their

home pages that were updated based on shoppers’ browsing

behavior during the first site visit, with at least a dozen of these

merely displaying recently viewed items in this area. Just 40%

showed personalized product recommendations during the second

site visit, even with double the available data on a customer’s

predispositions. When items browsed or searched were indicative of

a shopper’s demographic traits, less than half of merchants applied

the knowledge to refresh recommended items. In one instance, a

pet store’s home page still showcased only dog items even after the

shopper browsed only for cat items. That’s not responding to what

the shopper is telling the retailer about what she wants.

A home page is a retailer’s front door online. As such, it provides the first impression for many shoppers who may or may not be familiar with a company’s wares of what that merchant is all about.


PRODUCT RECOMMENDATIONS

This can be by way of a nudge to “complete the look” with

clothing items, shoes, jewelry or handbags to finish an ensemble.

Or another common strategy is to spotlight related extras via

complementary products, where a product page for a laptop

could include prompts for add-ons like an electronics case,

cords, software packages or a printer.

This site feature is a huge opportunity for merchants to grab

extra revenue and one they should pay special attention to,

considering 71.9% of consumer survey respondents overall

and 81.4% of 18- to 29-year-olds said they notice these related

products when they are considering a purchase. Even better

news is that 70.0% of the overall consumer base and 75.7%

of 18- to 29-year-olds have actually.

Shopper sentiment on the matter is resoundingly positive:

55.7% OF ALL CONSUMERS AND 65.7%

OF 18- TO-29-YEAR-OLDS ENJOY SEEING

RELATED PRODUCTS

64.3% OF ALL CONSUMERS AND 78.6%

OF 18- TO-29-YEAR-OLDS EXPECT TO SEE

RELATED PRODUCTS

60.2% HAVE PURCHASED A RELATED

PRODUCT WITH GREATER FREQUENCY THAN “RARELY” (I.E. COMBINED RESPONSES FOR “SOMETIMES,” “MOST OF THE TIME” AND “ALWAYS”).

Retailers, however, are missing the mark here. While the

vast majority–95.0%–of top 100 merchants showed additional

products somewhere on a product page, most of these were

just similar items or a regurgitation of items a shopper recently

viewed. The specs page for a silver ring yielded a half dozen other

silver rings. No matching necklace, a clutch or heels. A page

devoted to a particular chandelier produced recommendations

for other chandeliers rather than replacement bulbs, warranty

options or a wall mirror for finishing touches in the living room.

While getting eyes on more products is never a bad idea for

retailers since it can lead to a greater likelihood that shoppers will

find something that fits the bill, it’s not the most ideal scenario.

Rather, this approach functions more like a basic search bar

that just spits back results based on keywords. And that merely

duplicates the efforts of the primary search bar feature. This can

undermine attempts to increase average order value, which can

occur if a shopper discovers something she wasn’t initially seeking

out, because she is never exposed to items beyond her often

narrow initial scope.

Only 19% of retailers studied offered recommended items on

product pages in a more advanced way. One housewares retailer

that fell into this category knew a shopper was searching for

grilling cookware and did a deeper dive to serve up suggestions

for related products: barbecue sauces, dipping bowls and

companion pieces from the same dishware collection. Likewise,

a hardware merchant that sells power equipment and tools took

the opportunity to remind someone shopping for a generator that

he is likely to need a fuel can, extension cords and safety glasses.

The remaining 81% of retailers relied on meeting just the

baseline standard—using similar keyword-based or recently

viewed items in related product rails. Additionally, only three-

quarters of merchants utilized related product add-ons or

upgrades during checkout—a time when customers are already

primed to spend money.

Given that consumers are receptive to related product pushes

while browsing, this is a huge missed opportunity for many

retailers. If they can recommend related products, and not

just similar products, they will boost sales.

Retailers often offer up upsell suggestions for additional products that are related to a particular item a shopper is perusing.


SITE-SEARCHINTELLIGENCE

In many cases, online retailers treat their search bars like a

dictionary lookup as opposed to an opportunity to show consumers

products tailored to what they previously have expressed an

interest in. Retailers can generate more relevant results if they

understand a consumer’s preferences and can incorporate nuances

about what the user has shopped for in the past.

Suggestions should be prioritized by items that most closely align

with what a shopper has considered on the site before—serving

up matches based on brand preference, color interest and gender

rather than more generic options like the most popular shirts

across the entire inventory.

Of the top 100 retailers, 85.9% (with one e-commerce site

excluded since it doesn’t have a search bar) offered type-

ahead search, or predictive wording that auto-populates.

But the vast majority relied on the basic search method of

crawling for keywords, or matching the search term to a

product description. These sites missed contextual clues and

presented results without regard to the consumer’s activity or

preferences—missing the chance to provide personalization.

Very few seemed to take browsing history, gender, age or style

into consideration to bump products likely to appeal to that

shopper to the front of the line.

After repeated browsing for bridal shower and wedding

decorations on one party supply store’s site, for example,

typing “shower” into the search bar continued to return baby

shower products with no bridal shower hits. On another mass

merchant’s site, repeated clicks on turquoise jewelry still yielded

irrelevant results, including a blue shirt and blue bedding, when

a tester typed the color turquoise into the search box. Even

though site browsing on a beauty retailer’s page centered around

mascara inquiries, typing “m,” “a” and “s” into the search bar

pulled masks to the top. The same discrepancy occurred with

a music emporium. Starting a search with turntables as the

intended result delivered no DJ equipment despite previous

clicks in that category.

At the more macro level, the lack of site-search intelligence

is evident:

OF INSTANCES WHEN A MERCHANT’S INVENTORY

APPEALED TO BOTH GENDERS AND THE ITEM

SEARCHED FOR WAS GENDER-SPECIFIC, ONLY

37.8% OF RETAILERS SEEMED TO GET IT RIGHT

IN SEARCH RESULT SUGGESTIONS.

OF INSTANCES WHEN A MERCHANT’S PRODUCT

OFFERINGS APPEALED TO MULTIPLE AGE

RANGES AND THE ITEM SEARCHED FOR WAS

AGE-SPECIFIC, ONLY 28.2% OF RETAILERS

PAID ATTENTION IN SEARCH

OF INSTANCES WHEN THE STYLE OF

A BROWSED-FOR PRODUCT COULD BE

DETERMINED VIA COLOR, PATTERN, CUT, SIZE,

GENRE, BRAND, VIBE OR SIMILAR TRAIT, A

MEAGER 15.5% OF RETAILERS WERE ABLE TO

REFLECT PREFERRED CHARACTERISTICS IN

SEARCH RECOMMENDATIONS. PREDICTIONS.

Even after site browsing should have offered a pretty robust

shopper demographic profile, when subsequent searches were

conducted using unisex terms like “wallet,” “watch,” “pants”

or “jacket,” search predictions often incorrectly guessed

“men’s,” “women’s” or “kids’.” That was the case for a retailer

of outdoor recreation apparel, who pulled up women’s fleece

jackets ahead of men’s after the tester repeatedly viewed

men’s outerwear. Godiva is among the minority of major online

retailers effectively tailoring search results to the customer.

After a Reflektion overhaul to the company’s search function

to increase intelligence, customer feedback in online surveys

consistently ranked it among their favorite website features.

Executives consider it to be one of the merchant’s biggest

success stories, Turner Fielding says. When Godiva completed

its site redesign in 2016, search was one of the only functions

Retailers in the study also earned low marks for their failure to employ advanced site search tactics such as anticipating a shopper’s end goal.


“We play on taste, and if something looks yummy, people will buy it.”

Brita Turner Fielding E-Commerce Director, Godiva

that the merchant didn’t touch while it rebuilt most other

sections of the e-commerce platform from the ground up.

Another element that elevates search bar functionality is the use

of product thumbnails. Only 32.3% of retailers’ search suggestions

included preview images, which provide visual cues and a more

immediate and alluring gateway to product discovery.

Although Godiva is already ahead of the curve with its visual

search tool that pulls up preview images, the company plans to

invest more in search in the coming year. “We play on taste, and

if something looks yummy, people will buy it,” Turner Fielding

says. “Those images can do more than just delight customers.”

Some innovative retailers are going a step further with

integrating more interactive search capabilities. Vendors like

Reflektion are working on rolling out photo and voice commands

within search bars. That will enable consumers to use their

phone cameras to take a photo of an item and have a site display

similar products from its inventory or for the shopper to speak

into the microphone on her phone to instruct a retailer to “Show

me black dresses under $200.”

More than one in five consumers who were surveyed reported

an interest in using such a search option, but not a single

top 100 retailer extended either to shoppers through their

primary e-commerce sites. Two retailers did offer photo search

capabilities on their mobile sites, with an additional one offering

a bar code scanner. Godiva has plans to take advantage of the

new voice technology once Reflektion has it out of development.

But there is much room for growth here for other retailers that

have yet to move beyond dated keyword searches.


VERY FEW RETA_LERS TAKE BROWSING H_STORY, GENDER, AGE OR STYLE INTO CONS_DERATION TO BUMP PRODUCTS L_KELY TO APPEAL TO A SHOPPER TO THE FRONT OF THE L_NE.

15.5%Retailers reflected a shopper’s preferred characteristics in search recommendations when previous browsing history provided clues to color, cut, size, brand or other product traits

40%Showed personalized product recommendations during a second visit to the site, even with double the available data on browsing preferences

39%Retailers offered recommended products on their home pages that were updated based on shoppers’ browsing behavior during a shop-per’s first visit to the site


SEARCH RELEVANCY

SPOTLIGHT

GOAL

Revamp the site search function to be more responsive

to customer needs

HOW IT WORKS

Reflektion, which spearheaded the personalization

project, collects information on thousands of customer

actions like clicks, add to carts, searches and past

purchasing behavior. Then algorithms mine the data

to show the most relevant results for each consumer.

Now, shoppers see visual references to the products

they are looking for, which populate as they are typing

a query. When a male shopper with an affinity for the

color blue types the letters “s,” “h” and “o” into the

search bar, he immediately sees an array of relevant

images, including men’s blue shorts and shoes.

17%Uptick in average order size

26%Boost in conversion rate

62%Increase in page views

During O’Neil’s period of increased results, the retailer didn’t increase its ad spend, redesign its site or otherwise modify its existing marketing strategy.


PRODUCTDISCOVERY

SPOTLIGHT

GOAL

We try to excite customers and open their eyes to other items

they don’t know about. It’s guided ‘self-discovery,’” Turner

Fielding says.

HOW IT’S DONE IN STORES

In the retailer’s boutiques, a customer might come in once

or twice a year to buy the standard gold Valentine box from

the core collection. Associates can ask, “Did you know

we also carry pretzels, biscuits and coffee?” to expand

a shopper’s knowledge of what Godiva has in stock and

entice a larger purchase.

HOW IT TRANSLATES ONLINE

With algorithms for search results and related products,

Godiva can take a data point it has collected on a customer’s

preferences—that she buys dark chocolate—and serve up

related items such as dark chocolate-covered almonds and

truffles. “When we can recommend items they might not

think of us for or just aren’t our signature pieces, that helps

us stay top of mind,” Turner Fielding says.

“When we can recommend items they might not think of us for or just aren’t our signature pieces, that helps us stay top of mind,”


19%

90%

60%Consumer respondents have purchased a related product with greater frequency than “rarely” (i.e. combined responses for “sometimes,” “most of the time” and “always”)

Top 100 merchants showed additional products somewhere on a product page, but most of these were just similar items or a regurgitation of items a shopper recently viewed

Retailers studied offered recommended items on product pages in a more advanced way

68.6%

50.2%Consumer survey respondents expect a retailer to remember them and recognize their shopping habits when switching between devices

18- to 29-year-olds expect the same

CONSUMERINSIGHTS


CONNECTED SHOPPER JOURNEY

And anything that decreases friction leads to more revenue

for retailers. According to Reflektion, digitally savvy customers

demand seamless interactions with retailers’ brands and a

unified experience across browsing sessions and devices. When

a customer can pick up where she left off the last time she was

poking around for a cocktail dress, she is already farther down

the path to purchase.

Yet a dismal 7% of top 100 merchants remembered shoppers’

user names. And only 33% of retailers customized recommended

items on the home page from a previous visit before a shopper

logged into her account. Once a consumer signed in, 46% of

merchants recommended products either on the home page,

product pages or main account page that were based on prior

browsing history. Additionally, 19.2% preserved a search history

from the previous visit for quick reference. These personal

touches—or lack thereof—signal to a consumer whether a

retailer is paying attention to her shopping patterns and tailoring

what she sees on the website experience to her previous activity.

It’s especially important to remember shoppers when they are

browsing on their mobile phones. The majority of consumers

surveyed—50.2%—expect a retailer to remember them and

recognize their shopping habits when switching between devices.

And the percentage jumps to 68.6% among 18- to 29-year-olds.

Yet here lies another disconnect between what consumers want

and what they’re getting. Just 17% of home pages on retailers’

mobile sites featured personalized product recommendations

based on shoppers’ browsing behavior from two prior desktop

site visits while logged in with the same account. Now that more

than half of online retail traffic stems from mobile devices,

retailers should take care to be sure their personalization

strategy factors in cross-device shopping behavior.

From one site visit to another, recognition of a shopper’s identity, product preferences and order history delights the would-be customers with little time to spare.

And anything that decreases friction leads to more revenue for retailers.


EMAILS BRING BACK CUSTOMERS

Others go so far as to place an item in the shopping cart but then

turn back, deciding to leave it behind. Now, armed with email

lists, retailers can beckon customers to return to the fold with

reminders and promotions. But again, not everyone is employing

these techniques, despite resounding evidence that they work.

Retailers with a healthy email subscriber base and a program

in place to remarket to those customers will have a competitive

advantage, experts say. Studies of retail clients that send

shoppers browse- or cart-abandonment messages—or emails

to remind them that they were eyeing a particular item or left

something in their cart without checking out and suggest taking

a second look—reveal the power of this strategy time and time

again: These campaigns lead to higher conversion rates and

produce a lift in revenue, retailers say.

The Internet Retailer consumer survey tells a similar story.

After receiving a cart-abandonment email, 70.5% of respondents

said they have returned to a retailer’s site to complete the

purchase. One in 10 do so “always” or “most of the time.”

While email retargeting clearly works, only 25% of top 100

merchants sent a browse-abandonment email and 49%

delivered a cart-abandonment message.

The results are even more disheartening when considering

whether these emails are personalized. Browse-abandonment

emails—which require a more concerted outreach given that

consumers aren’t as far along in the shopping journey—should

highlight the item or items recently browsed, recommend

products in the same category or subcategory and suggest

products around the same price point, experts say. The top

100 retailers who sent these messages did OK in this regard,

with all but one retailer personalizing these messages in some

manner. But among those who sent cart-abandonment emails, the

percentage of top e-retailers that provided similarly personalized

messages dropped to 86.5% (when adjusting for multiple emails

from the same retailer with varying success on this metric). So less

than half—just 45%—of all of the top 100 merchants ever engage

with shoppers here in a way that individualizes marketing based on

individual site usage.

Most consumers like to be addressed by name, but on this test,

again the vast majority of Top 100 retailers fell short:

ONLY 1% OF RETAILERS PERSONALIZED

BROWSE-ABANDONMENT EMAILS WITH

THE SHOPPER’S NAME.

AND 8% PERSONALIZED CART-ABANDONMENT

EMAILS WITH THE SHOPPER’S NAME.

According to Reflektion, the volume of promotional emails sent has

risen by more than 20% year over year as retailers blast a deluge

of messages, but unique open rates have decreased by 7.6%, and

unique click rates are down 10.5%. The vendor says this is because

too many messages contain generic content not relevant for the

shopper receiving the email.

Marketers themselves recognize they’re floundering with email

personalization. Only one-quarter of email marketing executives

surveyed by The Relevancy Group, a market research and

consulting firm, said they regularly target customers based on

website behavior. Just 24% utilize life-stage marketing tactics

when reaching out to shoppers. The marketers surveyed identified

their top two email marketing priorities for 2017 as improving

segmentation and targeting plus utilizing real-time data.

There are a number of ways retailers can improve results in this

arena. According to Amede Hungerford, Chief Marketing Officer

at Reflektion, merchants should skip low-level marketing and

push for a more advanced game plan:

DO REACTIVATE SHOPPERS BY SENDING MESSAGES

THAT RESPOND DIRECTLY TO CONSUMERS’ BEHAVIOR

WHILE THEY WERE ENGAGED ON THE SITE.

DON’T SEND STATIC MESSAGES THAT INCLUDE

A PRE-DETERMINED SET OF PRODUCTS TO

APPEAL TO A BROAD SEGMENT OF CUSTOMERS.

DETERMINING WHICH ITEMS ARE MOST

PERTINENT FOR A LARGE GROUP, SUCH AS

EMPTY NESTERS OR YOUNG PROFESSIONALS,

Many times, online shoppers click around on a site and virtually head out the door without opening their wallets.


REQUIRES EXTENSIVE DATABASE,

MERCHANDISING AND CREATIVE WORK,

AND IT’S INEFFECTIVE.

DO ENSURE EACH MESSAGE SENT IS

INDIVIDUALIZED. INSTEAD OF PROMOTING

A LIMITED SET OF POPULAR ITEMS TO ALL,

CUSTOMIZE THE CONTENT BASED ON WHAT’S

ALREADY KNOWN ABOUT EACH RECIPIENT.

A big part of personalizing email is dynamic content. This is

content within an email that changes based on the shopper’s

behavior and other factors, including where she is when she opens

an email and products that she recently browsed on the website.

A retailer also can adjust the products promoted based on

available inventory—even after the email has been sent.

Experts say such “real-time moment marketing” tactics that allow

retailers to use contextual clues to make shopping predictions

dramatically improve email campaign results and return on

investment. Even merchants with above-average personalization

track records say they recognize the importance of staying abreast

of the latest email marketing tactics and are looking to improve

their campaigns.factors, including where she is when she opens

an email and products that she recently browsed on the website.

A retailer also can adjust the products promoted based on

available inventory—even after the email has been sent.

Marketers themselves recognize they’re floundering with email personalization - both promotional and behavioral.


WHAT YOUR CUSTOMER’S INBOX LOOKS LIKE

45%GENERIC CONTENT

53%MOSTLY PROMOTIONAL

INUNDATION

Campaigns are sent annually from a single brand

Shopper’s inbox is filled with promotional messages

Retail and e-commerce brands send the same message to each recipient

170


FINAL THOUGHTS

“There’s quite a bit of information available to leverage. If the same

customer keeps coming back to see the same product but not

buying, there’s no reason why you can’t figure out another way

to reach them and complete a sale.”

Digital personalization strategies offer an opportunity for more

advanced merchandising. Guided by research, these insights allow

merchants to influence customers at each point of engagement.

But consumers shouldn’t notice or perceive the algorithms

that are tailoring their experience, according to Reflektion.

In a contradictory age where consumers simultaneously are

skeptical of companies that collect data about their lives but also

respond to content that’s curated and customized on their behalf,

personalization is at its best when it unobtrusively operates behind

the scenes.

For now, though, there’s a large gap between what is and what

reasonably could be among major players in e-commerce.

Retailers that figure out how to replicate in-store experiences on

the web, serve up more relevant products and offer services akin

to personal shopping online—with a little help from the experts—

stand to benefit.

For now, there’s a large gap between what is and what reasonably could be among major players in e-commerce.

“How to bring individualized service—it’s a tough nut to crack. But without it, you’ve got a huge miss,” Turner Fielding says.


reflektion.com/demo | 866-REFLEKT | [email protected]

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