Aunt Emma reloaded in German online shops?
Personalization is much more than just one of the buzzwords in the e-commerce year 2018. It is THE must-have for online shops that want to shine in front of their customers with an excellent shop. The study 'The Power of me: The impact of personalization on marketing performance' by Epsilon even revealed that 80 percent of consumers are more inclined to buy from a company, if it offers them a personalized customer experience. What can you conclude from this?
Right! The good old corner shop flair is finding its way into e-commerce. Because Aunt Emma from the Corner Shop greeted us personally, knew us very well and knew what we were looking for or what recommendations she could lure us with. By the way: “Aunt Emma Store” is a symbol in the German language for a really personal corner shop in the 1950s. "What worked at Aunt-Emma won't be so wrong," -many companies think, and are increasingly jumping on the bandwagon of personalization. But this courage to change has not yet returned everywhere. Because personalization is easier said than done. We have set ourselves the task of learning more about personalization and have therefore thrown ourselves into the world of e-commerce.
A perfect stage for this research was provided by DMEXCO, the trade fair for digital marketing in Cologne. There we conducted a survey on the subject of personalization in online shops with 101 trade visitors from the marketing sector (86 of them from e-commerce). The experts represented a colorful mix of e-commerce sectors:
Personalization is so attractive
Personalization is not the same as personalization. If one clicks through the depths of the online shops, one can be welcomed as a user at different touchpoints by personalization measures. For online merchants, it is important to select the right methods in order to use this potential as effectively as possible. But with so many possibilities, you quickly lose the overview. For this reason, the participants in our survey should rate the attractiveness of different personalization options using a weighted matrix table. The scale ranged from unattractive (1) to very attractive (6).
The clear winner in the attractiveness battle is the personalized recommendation with a weighted average (average mood) of 4.54. This is followed by personalized advertising (4.49), personalized addressing (4.46), personalized search results (4.45), omnichannel personalization (4.27) and personalized product lists (4.09). The taillight is the personalized check-out (4.05).
The potential of personalization
In the next step, our 86 e-commerce experts were asked to assess the potential of personalization in their companies. 50 people stated that they were already making full use of this potential. The fact that there is still room for improvement in this area is shown by the 36 respondents who have indicated that the potential has not yet been fully exploited.
The exact areas of application of personalization were determined in the following question. The trendsetter here is the personalized approach (28) closely followed by the personalized recommendations (26), which had already been classified as very attractive. This is followed by the areas of personalized advertising (24), personalization in product lists (22), in search results (17), in the checkout process (13) and least of all in omnichannel personalization (7).
Since a personalized address in the online shop is no longer a witchcraft, the personalized product recommendations emerge as worthy runners-up in this race. These are used by our participants on the product detail pages (25), on category pages (20) and in the shopping cart (13). Of those who have so far been able to do without personalized recommendations, 16% (8) said they were already planning this possibility for the future. More and more companies are jumping on the bandwagon of Amazon & Co and making suggestions for products that might also be interesting. But how smart is the good old advice from Tante-Emma really? In order to make personalized recommendations, you need to know your customers and what they really want to see. Only then can individually relevant suggestions be implemented at various touch points in the purchasing process.
Why do many companies not use personalization options?
The 36 e-commerce experts, who have not yet used personalization, were asked to evaluate for us, why they are not yet personalizing (light blue bar).
In addition, those companies that already use the advantages of personalization for their online-shops should state the reasons they see for the non-action of their colleagues (dark blue bar).
The result is clear: The lack of resources is the main reason for the non-personalization of online shops too. Especially the relevant user data, which are necessary for personalization solutions, present companies with great challenges: The new basic data protection regulation makes it even more difficult to offer an individual shopping experience by making user data available.
The two groups of participants are no longer in complete agreement on the further assessments. However, by calculating the average of the added votes of both groups, two further central reasons for the non-personalization can be identified: On the one hand the lack of technical know-how and on the other hand the current software, which is not able to provide the necessary capacities, e.g. extensive customer data. It therefore fails in the broadest sense because of the processes that take place in the background of personalization.
What can be achieved with personalization measures?
Companies that have not personalized before need to be strong now. Because personalization can achieve some important business goals. For our survey, each of the 101 trade visitors gave their own assessment of which of the company's goals are right at the top.
According to the survey, the goal of improving the customer experience is most likely to be achieved through personalization. 80 out of 101 participants agree on this. The goals of "increasing sales" and "improving customer satisfaction" are also considered to be easily achievable. The improvement of the conversion rate is also right on their heels. It is therefore noticeable that personalization is not only intended to increase sales, but also to focus on the customer.
Personalization as a future trend?
In the last part of the survey, all 101 trade visitors were asked to provide feedback on theses on personalization. They could fully agree, agree, be neutral or disagree. The fact that the improvement of the Customer Experience represents an attractive outcome of personalization was already confirmed by the respondents in several voices.
But what do the participants think of the statement that an individual customer experience will become more and more important in the future through personalization in the online shop? Long question, short answer: 36 participants fully agreed, 48 of the trade visitors agreed. Only 12 were neutral and 5 rated the statement as inapplicable. As the previous assessment already clarified, the customer is increasingly the focus of e-commerce.
Just like in a good old corner shop, customers want to be greeted with individually relevant products as soon as they enter the shop. That's what our experts think. Only 5 participants fear that customers cannot do anything with a personalized online shop. Thus, personalization emerges as a clear future trend. 43 of the 101 trade visitors rate the trend as important, 47 experts even rate personalization as a future trend.
How far can personalization go?
The status quo - and therefore the quintessence of our survey - is that more and more companies are jumping on the bandwagon of personalization. For example, they are trying to create an aunt Emma shop flair for their online shop, especially through personalized recommendations. But not all personalization is the same. Because so far only 20% of the customers who visit an online shop are known. The remaining 80% are anonymous. Where Tante-Emma listens to your gut feeling with unknown visitors, the usual personalization tools reach their limits. Many companies make it easy for themselves and rely on personalized speeches and play out the uniform mush of product recommendations à la "that could also interest you" to the visitors. Many personalization potentials are not exhausted and are pushed aside due to inhibiting forces such as lack of tool capacities, lack of technical know-how or lack of customer data. Product recommendations and personal addresses are already familiar to visitors and therefore no longer represent a unique selling proposition. The real sales potential therefore lies in even less widespread forms of personalization, such as personalized search or product lists. These must now be exploited to the full.
The solution is called situationalization
This is where situationalization comes in. This method operates regardless of whether a user is known or not and without personal data. Only the use of the current shopping situation is decisive for the creation of an individually relevant online shop tailored to the needs of the respective visitor. A user who opens an online shop with his smartphone via a business newsletter on his way to work will be shown a different shop than a user who starts his shopping trip on a Sunday morning via the Google search on his laptop.
Situationalization goes one step further than aunt Emma and thus also as many personalization tools. Because with situationalization you know how to address 100% of shop visitors exactly without knowing them personally. This enables personalized shopping experiences on the entire customer journey. Situationalization enables individual sorting in the product lists, suggests personalized search results and plays out product recommendations tailored to the visitor's needs. In addition, situationalization can be integrated into the system quickly and easily. This means that companies that are afraid of the technical background can breathe a sigh of relief. Numerous interfaces to different systems are already available. Data can be used profitably from day 1 onwards.
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