Retail TouchPoints: New Research Shows Online Shoppers Expect Personalized Merchandising
By Amanda Ferrante
Through a special arrangement, presented here for discussion
is a summary of a current article from the Retail TouchPoints website.
More
than 50 percent of consumers expect personalized merchandising, starting with
a personalized home page, while one in four look for these tailored experiences
at the search results, product, and category pages, according to recent research
from the e-Tailing Group and MyBuys, a provider of personalized recommendations
for multi-channel retailers.
The survey also found that 77 percent of shoppers
will make an additional purchase at least once when presented with personalized
recommendations, according to the report Consumer Insights into Multi-Channel
/Interactions: Practical Tools for Profitable Selling.
The e-tailing group
surveyed over 1,000 consumers to find out how shoppers interact with personalized
merchandising and where they expect to see personalized recommendations.
Other
findings:
- Asked how important are recommended products in the overall online shopping
experience, 11 percent said “very important,” 28 percent said “somewhat
important,” 39 percent were “neutral – sometimes valuable,
sometimes not valuable,” 14 percent indicated “somewhat unimportant,” and
eight percent said “not very important.”
- Over 60 percent expect merchants to recommend similar products in addition
to related items.
- Sixty-eight percent of shoppers say recommendations play a valuable role
beyond shopping, including convenience and time-savings, while also aiding
selection.
- Fifty-four percent of shoppers say personalized recommendations that can
be purchased directly from an email or ones that redirect you to the product
detail page are very influential in making a purchase.
Discussion Questions: When, where and how should personalized merchandising
become part of the online shopping experience? What retailers are doing the
best in personalizing the online shopping experience?
This is a chicken and egg question. To some extent, shoppers certainly want this. However, it is also true that digital shoppers have been “trained” to expect this.
“Shopper training” is a significant factor in many areas of retail. For example, have you ever noticed how cookies and crackers share the same end-of-aisle display and thought about that? These products are completely non-substitutable for one another. One goes with cheese, the other…yeech! One is sweet, the other savory. It is because the same companies make both products and run their trade deals with retailer merchandising performance that way. It makes no sense, but it has always been that way and no shopper thinks it’s strange.
It’s about packaging the personalized message, i.e., how it’s presented. If consumers sense the retailer is perhaps thanking them for their purchase, and making the e-effort to assist them further, there’s a good chance the retailer’s image will be enhanced and the sale made. If consumers perceive the retailer to simply be pushing another purchase, it will have a negative impact. Bottom line, there will be no sale and there will be a negative score for the retailer.
Amazon.com is probably the best known practitioner of “people who bought X also liked Y” marketing (AKA, personalized merchandising). This type of automated recommendation, often called “collaborative filtering,” can be remarkably effective. Anecdotally, Amazon recently suggested I’d like to read “The Big Short” by Michael Lewis, since I liked “Liar’s Poker” and “When Genius Failed,” and I immediately added it to my wish list.
Netflix is also famous for using the accumulated preferences of its users to help it do a better job recommending new movies that a particular member might like.
This type of recommendation marketing is, if anything, under-utilized today. I’d like to see more retailers, both online and off, leverage the “network of preferences” that their purchase history database represents to help shoppers find out about new products and encourage additional purchases.
I enjoy the online shopping convenience especially for items like shoes or my golf toys. It is always seemed to me to be an asset to have items suggested, the process of “I know you bought this, you may be interested in that,” have made suggested sales that would not have been top of mind as well as made my exploring the site that much more intense and effective.
Indeed, many consumers expect an email after an online purchase, but that doesn’t mean that they necessarily want/need such an email or would be upset by the absence of one. Most consumers would gladly trade off such “personalized” services for meaningful improvements on more fundamental attributes: easier browsing during the purchase process, product selection/quality, convenience, and price.
As there is a balance between annoying spam and informative follow up emails from the retailer, I believe most customers will appreciate on-target communications.
Consumers expect a personalized experience when they shop online. We always recommend that our clients create customized landing pages for their websites. This allows consumers to find the information they want quickly and accurately. No one wants to waste time clicking through pages looking for information. By flattening the site and putting all of the valuable information on the landing page, consumers are greeted with a positive experience and are more open to purchase recommendations.
Providing service to customers is a tried-and-true way for a retailer to build business, and to do so online actually makes it easier. It’s technically possible and easier with registered customers. There are no reluctant store associates to try to persuade to be proactive with customers, sometimes with mixed results. And finally, online shoppers tend to be at the upper end of the economic scale.
For example, for department stores, according to Signature 9 earlier this using data from Google’s Ad Planner, J.C Penney had 3.06 million unique monthly visitors in 2009, whose income exceeded $100,000. Kohl’s had 2.52 million such visitors to their site. About 36% Bloomingdale’s monthly visitors enjoyed incomes of $100,000 or more.
In this context, high levels of service, recommendations, and personalized home pages really do make a great deal of sense.
Joel, thank you for reminding us of all the absurdities that exist in retail today that we take in stride simply because they’ve “always been that way.” I think the comments here implicitly call out a key difference: personalization vs. relevance. We often confuse these terms but it’s actually really important to separate them so as not to get into the creepy area of targeting where shoppers feel stalked. When a shopper makes an online purchase with a retailer, they know they’ve given the retailer a reason to communicate with them and specific information about their interests–great chance to personalize the communication providing shipping details, thank yous, surveys, etc. When shoppers are browsing I believe what they’re really looking for is relevance, not personalization: that’s why the Amazon engine works well. I’m not saying, “Hey, I see you visited these other four sites today so I’m guessing you’re looking for a BBQ grill.” I’m saying, “Hey, looks like you want something like this–and here’s what other people have liked” keeps it relevant to me without making me feel like the company is retaining way too much personal information about me.
In the rush to be connected socially and digitally, I think we often forget to let the customer control the pace of the relationship. Until they tell us they want to be personally recognized and known, we’re better off being highly relevant and someone impersonal. Otherwise we risk scaring them off.
Merchandising should be personalized whenever and wherever possible. The goal of any retailer’s e-commerce program should be a uniquely tailored experience for every shopper that seamlessly crosses all channels. As difficult is this is to pull off, remember that customers don’t know or care about all the behind-the-scenes effort it takes to make advanced personalization happen. They now expect it and at some point, delivery will become a minimum benchmark for online customer service rather than something to strive for.
Personalized online merchandising/marketing has come a long way in just a few years and certainly has much farther to go. Who knows what the best and brightest will do next? The obvious conclusion for any retail format purveying consumables is; you had better play in this arena if you want to stay viable.
Here’s the real scoop on personalized merchandising and the online shopping experience; asking consumers what they think in the form of a survey is probably not going to produce accurate findings! Truth is, consumers do not know how and when they want personalized merchandising online. Just do it! Moreover, do it right.
Ben Sprecher used the term “recommendation marketing.” Another way of saying that is “telling the shopper what to buy.” Or make it softer and say “suggest what the shopper should buy.” In every case it fixes the #1 sin of self service retailers, which is failing to TELL THE SHOPPER WHAT TO BUY!
Online retail is of course self service retailing, with electronic assistance because it is “online.” But the very same electronic assistance is already creeping into bricks-and-mortar stores through the use of the shopper’s own PDA or cell phone. It’s a trickle today, but will become a flood as “recommendation marketing” becomes the norm for ALL self service retailing, online and offline.
Seeing this coming, I have spent the past few years figuring out how self service retailers, WITHOUT electronic assistance, can implement “recommendation marketing” in current bricks-and-mortar self service stores. It is the doorway to astounding increases in sales and profits. But very counter-intuitive to the passive “pile it high, and let it fly” crowd.
How, where, when and why to draw lines is one of those insoluble problems that retailers confront daily. Every new marketing opportunity revitalises the debate. One person’s view that recommendations and personalised pages equate to “customer service” inspires another person’s fit of pique at being harassed and inundated with spam. If customers vote with their wallets, who spends (or desists from spending) more? I get more and more anti-study with every one that I read. Surely there are better ways to spend money, especially at a time when retailers are resorting to giving away their products for free in the hopes that that will encourage recipients to open their wallets rather than sitting on them.
Amazon.com is the best on line marketing company when it comes to the personalized shopping experience. Now add Zappos to their mix; and the shopping experience becomes even more specialized and definitely customer centric.
These companies are confirming the order, sending shipping information and following up in a non-invasive manner to let you know of similar items now available. I like how they manage their marketing and can easily see why others will be doing the same. Successful companies have a trail of “wannabees” following them.