The Significance of Real Time Personalization
 

The Significance of Real Time Personalization

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This article has been written by Suresh Harikrishnan, CEO, Nudgespot. This article was published in issue 07 of Social Technology Quarterly. ...

This article has been written by Suresh Harikrishnan, CEO, Nudgespot. This article was published in issue 07 of Social Technology Quarterly.
Summary: Real-time enables e-commerce companies to efficiently handle shopping cart abandonment through relevant offers, recommendations, and marketing that can improve conversion rates.

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    The Significance of Real Time Personalization The Significance of Real Time Personalization Document Transcript

    • TheSignificanceofReal-timePersonalization
    • Kuliza Social Technology Quarterly Issue 07Real-time enables e-commerce companiesto efficiently handle shopping cartabandonment through relevant offers,recommendations, and marketing that canimprove conversion rates.by Suresh HarikrishnanPhoto Credit: schizoformAccording to econsultancy’s latest report on conversion rates,optimization in e-commerce companies and conversion rates arefalling and are at 3.8%, down 8.4% year-on-year. Approximately,only 10% of your visitors add products to their cart when they are onyour store, yet, about 70% of them do not complete their purchase.This is both a huge opportunity and a problem at the same time.Shopping cart abandonment is a key issue e-commerce retailersencounter. Users visit your e-commerce websites but leave withoutbuying. No amount of marketing budget is likely to fix this. In fact,your ROI on marketing spend will only come down as you spendmore. Research shows that the two biggest reasons for peopleabandoning their shopping carts are: 1) they find it difficult to makeup their minds and 2) pricing. People who have abandoned theircarts have already expressed their interest by adding products onyour store, so it only makes sense to understand and engage thesecustomers. E-commerce majors have used a variety of solutions toaddress these, including - integrating with social networks throughtheir widgets, offering discounts, reducing the number of steps in thecheckout process, email reminders, and so on. You can improve theeffectiveness of these in leaps and bounds by making these relevantand real-time.Real-time marketing can make a huge difference to your conversionrates. Most customers are used to discounts and deals online; thesehardly make a big difference to your conversion rates. However,when these promotions are personalized to different visitorsegments, and offered when they are browsing on your store, youare bound to see much better conversion rates. Consider this casestudy of one of our customers.The customer is an e-commerce store that sells baby care productsCommerce
    • 24Real time provides a uniqueopportunity for brands and retailersto influence pre-purchasingdecisions. Real-time personalizationis about focusing on drawing the rightvisitors and making offers and dealsthat are relevant to them. By doingso, digital marketers and brandsare making a radical shift in theway they sell. As brands understandmore about how customers purchase,real-time personalization is key tomaximizing sales.Photo Credit: xavi talleda
    • Kuliza Social Technology Quarterly Issue 07 25Kuliza Social Technology Quarterly Issue 07
    • online. Their cart abandonment rates were about 65 percent. Overa month, real-time promotions resulted in over 1,200 purchases.But the most important fact here is that, cart abandonment ratesdropped to as low as 25 percent when customers were shownreal-time promotions. Therefore, there can be no second thoughtson the effectiveness of in-store marketing that is both relevantand real-time.So how do you get started with real-time personalization? Thereare two parts to this. First, it boils down to understanding yourcustomers. Once you understand your customers, you need to putthe insights into actions by personalizing sections of your store forbetter conversions. Let us look at these in detail.Understand CustomersIt is easy to understand customers’ behaviours in the physical retailworld. You cannot do this in the online world. But this is whereanalytics tools facilitate better sales. Using analytics tools likeGoogle Analytics, you can build conversion funnels and understandwhich segments of your customers are likely to drop out withoutcompleting their purchase. Understand how these visitors find yourstore, what they are looking for, and at what stage do they drop outof your conversion funnel. Do they drop out after they begin thecheckout or is it before? If they are returning customers, what mighthave stopped them from buying? Do you find people abandoningmore items in certain categories of your product line? AnsweringPhoto Credit: net_efektthese questions will help understand and identify target segments ofcustomers to engage. Ensure these segments are neither too smallnor too big - smaller and bigger groups are difficult to analyse andtest your personalization efforts.Real-time Actions, Just More RelevantOnce you have identified your target segments, identifying relevantmarketing is your biggest challenge. In an age of social networksand smart phones, context plays a key role. What are your targetcustomers looking for? Do you know what category of productsthey are interested in? Do you know how much they are likelyto spend? If these customers are visiting your store via a paidmarketing channel, do you know what their acquisition costs are?All these play a part in choosing a relevant action. Whether youchoose to use promotions, ads or recommendations, make sure itis relevant to your target visitor.Relevance comes not just from the right marketing tool, time tooplays a significant role. Remember, we are talking about real-time- can you offer these promotions just when a customer is decidingon the purchase instead of offering it beforehand? The best time forthese actions differs for each visitor segments. While it is better touse these for new customers, it might make sense to delay it as longas possible, when targeting returning customers. Use analytics toolsto gauge the best time to bring up these marketing.The process does not stop here, in fact, this is the beginning. There
    • Kuliza Social Technology Quarterly Issue 07is no reason that whatever personalization you choose will work.A culture of analysing, testing, and fine tuning these changes arecritical for better conversions. Major e-commerce companies useA/B testing as a way to choose what works best for them.A/B Testing to Measure FeedbackGone are the days when you can rely on your survey and supporttools for customer feedback. Most customers neither have timenor motivation. Set goals and A/B test your changes and measurewhat works best. There is no better feedback than measuring howeffective your customers are in meeting their shopping objectiveson your store.There is an unprecedented amount of consumer data available tomarketers these days. Through this data, it is easy to understandwhat causes customers to drop out before completing a purchase.The question then is how willing are companies to understandtheir target audiences better: ranging from their demographics,psychographics, interests, opinions to their intent. As a believerin a personalized e-commerce world, I can vouch that relevantin-store marketing can go a long way in improving conversionson your store.As more shoppers move to a social, personalized world withproliferation of smart phones, tablets and social networks,shopping needs to be equally convenient and personalized.E-commerce stores seem to be caught up in legacy in how thestores are built and used online, and real-time personalizationcan go a long way in making shopping a fun and social experiencethat it is. In a highly competitive market that it is, real-timepersonalization is critical to stand out.ReferencesMoth,David.“Basket abandonment:case studies and tips to help improve yourconversion rates.” Econsultancy: Digital Marketing Excellence,26 Nov 2012.Nicholls,Charles.“The Science of Shopping Cart Abandonment.”SeeWhy.TheConversion Academy.Shuki, Idan Dr. “The Impact of Real Time Promotions in Digital ServiceOfferings.” Better Marketing Center.Pontis,09 Jan 2008.Gunning, Paul. “Real-Time Marketing is Upon Us - Here’s How AdvertisingNeeds To Adapt.” Fast Company.