For Marketers, Merchandisers & eCommerce Professionals · Making the right decision from the ... It allows you to immediately provide a more relevant shopping ... Data is the fuel

Understanding Personalization Capabilities

For Marketers, Merchandisers & eCommerce Professionals

Learn More | www.certona.com | [email protected] | 858.369.3888

Personalized shopping experiences have drastically changed the way consumers want to shop and engage with retailers. Consumers now expect individualized experiences at each phase of their shopping journey, which is why you now need to rethink your approach to digital commerce.

According to Gartner Research: “By 2018, organizations that have fully invested in all types of online personalization will outsell companies that have not by more than 30%.”

There are many flavors of personalization solutions on the market today. Therefore, it’s important to look for a platform that can address all of your pain points and a provider who can support all stages of personalization.

To make an informed decision, you should outline your short and long term business goals, identifying key milestones and growth strategies. Making the right decision from the start will save you time and money.

After all, not all personalization platforms are created equal.

Importance of personalizationShoppers in the U.S. are projected to spend $440 billion in online retail purchases in 2017*, according to eMarketer. That is around a 12% increase from 2016 – a rate that is growing nearly 5x faster than the growth of in-store sales. For this reason, implementing a personalization strategy to drive online and omnichannel growth is essential.

Personalization spans a broad spectrum and means different things to different people. You should very clearly define business goals and shopper experience objectives before evaluating personalization providers who might have very different capabilities and approaches. Defining your business goals up front will instantly help to narrow down apotential personalization partner.

Here are the six different levels of personalization capabilities we will discuss in this eBook:

THINGS TO LOOK FOR IN APERSONALIZATION PROVIDER

Expertise The right personalization partner will influence all aspects of the shopping journey on all channels, as opposed to just various components throughout the shopping experience. Expertise in your industry will be crucial for driving success.

Experience Many personalization providers lead with the same messaging and claim to have the same features and capabilities. Be sure to ask how long they have been in business. Request the size of clients and projects they have deployed and the value delivered to the client.

Scalability Selecting a provider whose solution offering can grow with your business is critical. There are many phases and approaches to personalized shopping experiences so choosing a partner who can adapt to changing and growing business requirements is a must.

Support While personalization capabilities itself are important, the support a provider offers is equally critical for achieving success. Make sure you understand support offerings and select a partner that matches your expectations.

*https://www.internetretailer.com/trends/sales/us-e-commerce-sales-2013-2017/


COLLABORATIVEFILTERING

1

CUSTOMERSEGMENTATION

2

RULESBASED

3

REAL-TIMEPROFILING

4

PREDICTIVEMODELING

5

DATAINTEGRATION

6

PERSONALIZATION

CAPABILITY LEVEL


Understanding personalization capabilitiesEvery shopper is different. Whether they are a first-time visitor or a loyal customer, the need to deliver a relevant and personalized shopping experience is the same. Personalization allows every shopper to have in-the-moment, highly individualized experiences based on behavioral profiles and predictive analytics.

Here are the top personalization capabilities you should understand when evaluating platforms:

Collaborative Filtering

What is collaborative filtering? Better known as "Wisdom of the Crowd." Collaborative filtering only focuses on collecting behaviors and preferences from a group of shoppers. It then drives recommendations based on what the “crowd” did when they interacted with a specific asset on your site. Collaborative filtering does not focus on the specific behaviors and preferences of the individual shopper.

How is collaborative filtering used for personalization? Although collaborative filtering does not personalize at the individual level, it is a useful approach for unknown or first time visitors. It allows you to immediately provide a more relevant shopping experience by leveraging contextual data and blending it with the “wisdom of the crowd” to present relevant content and products versus having no personalization at all.

NEW VISITOR

VISITS FASHIONWEBSITE

COLLABORATIVEFILTERING

EXAMPLE

BEST SELLERS

TRENDING IN YOUR AREA

OTHERS ALSO BOUGHT

1Collaborative filtering is a useful approach for unknown or first time visitors.


Customer Segmentation

What is customer segmentation? The process of dividing shoppers into subsets of perceived common behaviors, interests and priorities. Segmentation allows you to implement strategies to target the subset groups based on the specific demand and attributes of each segment.

How is customer segmentation used for personalization? Segmentation on its own can be very targeted, but when combined with individualized behavioral profiling and predictive modeling, it takes the shopping experience to a whole new level. By leveraging historical cross-session data, contextual information (such as geo-location, weather, time of day or day of the week) and real-time activity for each shopper, true personalization is enabled delivering highly targeted content, offers and individualized recommendations to each shopper within a segment.

Demographics

CUSTOMER SEGMENTATION TYPES

Geographic Psychographics Behavioral

AgeGender

Marital StatusOccupationEducation

Income

ContinentCountry

StateCity

Zip CodeRuralUrban

Contextual

Health ConsciousActive LifestyleEnjoys MoviesLikes to Cook

Fan of BaseballPlays PianoLikes Cats

Buys SneakersLikes Sales

Reads ContentNever Buys Pants

Shops at NightLoyalty Member

2

Segmentation allows you to implement strategies to target the subset groups based on the specific demand and attributes of each segment.


Rules Based

What are rules? Influencing shopping experiences based on business objectives such as merchandising, marketing and eCommerce strategies/initiatives. Business rules enable you to define, test, execute and maintain business strategies easily and efficiently. This enables you to deliver the best experience for your shoppers while meeting business goals such as increased visibility to a new product line.

How are rules used for personalization? Only a few personalization platforms have the capability to empower merchandisers with a business rules option. This gives you extended functionality to meet the standards of shoppers but also internal business strategies. This flexibility in functionality allows for an art and science approach that enables business goals while still delivering a 1:1 personalized shopping experience.

Advanced Merchandising Curation

Related Category FeatureShowcase products from a related category

Cross-sell & High MarginIncrease profitability by cross-selling items with high margin

Excess Inventory in Women’s ShoesIncrease visibility and sales for clearance or sale items

EXAMPLE

3

Business rules enable brands to define, test, execute and maintain business strategies easily and efficiently.

COMPLETE THE LOOK

COMPLETE THE LOOK


Real-Time Profiling

What is real-time profiling? One of the most powerful aspects of personalization isreal-time personalized shopping experiences. Real-time profiling instantly collects behavioral and contextual traits to create shopper profiles that boost the shopping experience towards the individuals in-the-moment needs.

How is real-time profiling used for personalization? Real-time profiling allows you to profile anonymous and known shoppers by observing shopper behaviors and identifying contextual information within 3-4 clicks on a site. This information enables better predictions of the shopper’s intent and allows the personalization engine to serve up the most relevant experience in real time during the active browsing session.

SHOPS FOR RUNNING SHOES

REAL-TIMEPERSONALIZATION

PERSONALIZED PROMOTIONS

NEW PRODUCT AWARENESS

PERSONALIZED CONTENT

REAL-TIME BROWSE & CART ABANDONMENT RECOVERYReal-time personalization is extremely effective for browse or shopping cart abandonment recovery. By remarketing to abandoners with real-time personalized advertisements and emails, you can quickly increase the chance to recover potential lost sales based on the most recent interactions.

EXAMPLE

4

Real-time profiling allows you to profile anonymous and known shoppers by observing shopper behaviors and identifying contextual information within 3-4 clicks on a site.


Predictive Modeling

What is predictive modeling? Predictive modeling enables you to collect shopper contextual and behavioral data, and model it to predict individual affinities and the next-best-action in the shopper’s journey.

How is predictive modeling used for personalization? Predictive modeling uses many techniques from data mining, statistics, machine learning and artificial intelligence to analyze and model shopper data to predict future behaviors.

By leveraging predictive modeling, you can become extremely targeted when it comes to presenting what your shoppers are looking for. From increasing engagement and loyalty to more strategic promotions and offers, predictive modeling allows you to deliver the most relevant, in-the-moment shopping experience to a segment of one, across the different digital retail channels.

5

Predictive modeling allows you to deliver the most relevant, in-the-moment shopping experience to a segment of one, across the different digital retail channels.

EXAMPLE

FIRST-TIME SHOPPERLOOKING FOR

NEW DRESSES ON SALE

PREDICTIVE MODELINGCAPTURES AND ANALYZES

Where is she located?

What is her device?

What day is it?

What is her referral source?

What is she looking aton the site?

BROWSES DRESSESON SALE

SHOPPER SEES


Data Integration

What is data integration? Data integration is the process of accessing and leveraging information from various sources to gain additional business insights to enable deeper targeting. By connecting to these data sources, you can uncover richer and more useful information that allows for better engagement.

How is data integration used to enhance personalization? Data is the fuel for personalization. The more information you can incorporate about each shopper, the more individualized the experience will be. There are many different types of information about the shopper and your products that can be leveraged for personalization which will improve shopper profiling, relevancy of the experience and overall engagement.

Here are some examples of useful data sources to enhance personalization:

Point of SaleIncorporate any offline point of sale data such as in-store or kiosk to better connect purchase behaviors across channels.

CRMIdentify key customer attributes and purchase history to understand how they interact with your brand.

Demographics & LocationDistinguish your shoppers based on age, gender, occupation, income and current location to serve them more relevant content and products.

Personal Account PreferencesUnderstand how your customers want to be communicated with based on preferences such as delivery method and frequency of communications.

Product ReviewsLeverage reviews to recognize what products shoppers’ like and dislike.

Social Media InteractionsAnalyze your customers’ social interactions to better understand their interests and preferences.

6

The more information you can incorporate about each shopper, the more individualized the experience will be.

Things to keep in mindWhen evaluating personalization providers, there are many things to consider in terms of solution capabilities, performance track record, experience, flexibility and support. Ensure you are considering these common areas to avoid signing a contract with a provider that does not actually meet your specific personalization needs.

Go Beyond Manual SegmentationAlthough segmentation can be a useful strategy when it comes to targeting consumers, it’s a major differentiator amongst personalization providers. Most providers do not personalize beyond general segmentation and collaborative filtering, leaving out unique shopper attributes resulting in frustrating experiences. True personalization focuses on the individual shopper’s in-the-moment interests and past behavior, not just based on the “wisdom of the crowd”.

Analyze and OptimizeMany personalization providers will pitch you on their “easy button” approach to personalization giving you a black box solution. A black box approach eliminates merchandising curation flexibility, hinders the ability to define and refine business strategies, and lacks transparency into reporting and analytics. Look for a partner that offers clear and detailed reporting which can be analyzed to test, improve and grow your personalization program.

Get Real (Time)All personalization providers offer what they call ‘real-time personalization,’ but it’s what they do with that data in real time that matters. Most providers are capturing shopper behavioral data in real time, but they’re not processing it at the individual level, nor are they delivering any targeting or personalization in real time. Look for a solution that offers both individualized profiling, real-time targeting and delivery for an optimal shopping experience.

Your Product Data MattersData and user context are the fuel that drives personalization. The more product data attributes you have, the better the experience. Make sure to provide the most detailed product data feed you can access, which is usually the product feed used for your company’s finance department for reporting purposes. Financial product data feeds are commonly the most structured in terms of your product taxonomy by identifying a single value to represent the primary and sub-categories, which allows the personalization engine to better connect shoppers with the right products.

See example below of a good product feed.


Evaluate personalization providers by matching their capabilities based on your organization’s customer experience strategy and sales objectives.

Primary Category Outerwear Shoes Clothing Clothing Equipment Equipment

Category Jackets and Vests Activewear Shirts Shirts Running Accessories

Technical Pack

Subcategory Rainwear Running Shoes Tank Top T-shirts Running Watch Backpack

Gender Women’s Men’s Women’s Men’s Unisex Unisex

Summary

Certona Can Help!

Personalize Every Interaction Across All Channels

SEARCH& DISCOVERY

CONTENTENGAGEMENT

PRODUCTRECOMMENDATIONS

PERSONALIZEDREMARKETING

In conclusion, technology continues to transform digital retail. Personalization is a strategic competitive advantage for any retailer or brand who is looking to compete in the crowded digital retail world.

Remember, personalization is more than just product recommendations; it creates a completely individualized, in-the-moment shopping experience. Selecting the right partner will enable loyalty and increase overall sales.


Certona’s robust omnichannel personalization solutions power individualized customer experiences for over 500 top eCommerce websites in more than 70 countries. Certona’s platform delivers 60 billion personalized experiences per month and generated $4 billion in client revenue in 2016. The company’s Personalized Experience Management™ platform, powered by the Certona Predictive Cloud™, increases engagement and conversions by leveraging one-to-one behavioral profiling, Big Data insights, and real-time predictive analytics to present individualized content, promotional offers and product recommendations across all customer touchpoints. For more information, please visit www.certona.com.

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For Marketers, Merchandisers & eCommerce Professionals · Making the right decision from the ... It allows you to immediately provide a more relevant shopping ... Data is the fuel