“E-commerce is not an industry; e-commerce is a tactic,” said Tobias Lutke, founder and CEO of Shopify, an ecommerce company based in Ottawa, Ontario, Canada.
Today’s retail environment is dominated by consumer preference: shoppers want brands to offer what they want on whatever digital channel they use. And the only way to engage shoppers with brands is to provide an individual experience shaped by their preferences, including who they are, how they shop, and what products they use.
Retailers see personalization as a way to connect customers to products they will love and create long-term loyal customers, not single, willing buyers. But personalization is more than meets the eye.
Personalized marketing can impact retailers in ways they may never think of, and have huge benefits for businesses.
Here are some reasons why personalized shopping is important.
Customer service can be at the center of complaints and more than the customer experience:
When customers are dissatisfied with a product, the first contact customer service directly. Maybe the product doesn’t match, they don’t like the color, or they just hate the product in general. With personalized communication, customers are shown only products that make sense to them and in their specific size. That doesn’t mean shoppers will always be happy with a product, but they tend to be – meaning fewer dissatisfied customers turn to customer service.
Brands are better able to estimate inventory
Brands need to consider how customers behave and what products they interact with in order to successfully personalize their marketing. Only then can they use technology to make accurate decisions about what buyers want to buy next. This data can also be used outside of marketing and, surprisingly, in warehouses.
Some retailers who have made personalized marketing a priority are also paying attention to the impact on their supply chains.
Brand go green and increase resilience:
Almost every brand wants to integrate some aspect of sustainability into their business. For some, this may mean selling products made with eco-friendly fabrics, while for others, it may be a company contribution to the environment. And personalized marketing? It can also be sustainable.
Buyers who only buy the products they choose are less likely to make returns. Reduced returns mean less CO2 emissions from transport back to storage and less packaging waste. And often the results are disposed of completely and end up directly in the landfill. By matching shoppers with the products they want — and which fits — and avoiding returns, retailers are also more resilient.
Brands are experiencing a margin revival:
With a personalization strategy, brands can focus more on how they push their products. Brands can provide personalized recommendations based on the items shoppers already have in their cart to increase basket size and minimize initial fulfillment costs (multi-item orders cost less than three single-item orders).
Product recommendations aren’t the only type of personalization that affects margins — personalized offers and promotions can also significantly impact a retailer’s bottom line.
GroupBy Inc. develops software as a services platform. The Company offers e-commerce solutions that transform the way retailers interact with their consumers online. GroupBy software is focused to increase its branch in many other places with the aim to support many other new e-commerce businesses to grow.
