Personalization Might Be the Future of E-Commerce, but First, We Have to Make It Cool — Not Creepy
Innovation in online retail hinges on technology, sure, but more importantly on earning consumer trust, says Ben Crudo, CEO and Founder of Diff, an e-commerce agency
If you shop for men’s suits, you probably know a “Sal.” He’s worked at your go-to menswear store forever and has been helping you for years. By now he knows what you want even before you do.
He shows you pieces that fit your budget, cuts that are complementary and brands you’ve liked before. In short, he’s the ultimate experience in personalized retail.
For online retailers, the Holy Grail of e-commerce is in replicating Sal’s talent with technology. The dream is to make online shopping just as frictionless, pleasant and carefully curated as an in-store experience with a great salesperson.
Online personalization is widely hailed as the future of retail, and for good reason: Retailers who take even the most basic steps toward providing a bespoke experience can see major boosts to conversion rates. Even something as simple as personalizing your email blasts increases transaction rates by 600 percent.
But here’s the thing. We’re not there yet — not by a longshot. Despite advances in artificial intelligence and more data at our fingertips than ever before, there are significant hurdles to clear before we can provide a personalized shopping experience that offers consumers anything near the value of our old friend Sal. For shoppers and retailers out there, here are what’s standing in the way and some ideas on how to really move the needle on personalization.
Overcoming the creepiness factor
We’ve all been there. You check out a new pair of shoes online and suddenly they start popping up on every site you visit. These “stalker ads” are the pinnacle of personalization technology right now. But while they might be appealing to advertisers seeking to boost their presence, they freak out prospective customers. In fact, 75% of consumers find most forms of personalization creepy, which is why Google now lets you opt-out of ads that know “too much” about you.
That big brother vibe is a result of metadata — things like your IP address, your geographic location, and even how you move your mouse — frequently collected by shared advertising platforms to enable ads to follow you from Amazon to Facebook to your favourite blog or news site.
In rare cases, this can be useful in getting consumers to cross the finish line and purchase products they really want (brands see a 400 percent increase in ad performance when they use targeting). But on the whole, it’s a clumsy and obvious process that, rightfully, creates a sense of paranoia in users that their every online move is being monitored — and ultimately sold.
To overcome the creep factor, we need to move away from blanket surveillance and instead create curated experiences that are as valuable for consumers as they are subtle. We’re already seeing this on subscription sites like Spotify and Netflix that make seamless recommendations based on users’ patterns — and, importantly, enhance their experience by doing so.
In the retail world, non-invasive personalization will take a slightly different form. Imagine browsing your favourite store’s site on a rainy day and being greeted with umbrellas and raincoats thanks to algorithms that use geography and weather reports to customize your experience. This is the kind of approach my company is developing for some of our clients now, but in order for personalization to truly make the leap from creepy to curated, retailers have another big hill to climb.
Earning information by earning trust
With privacy in the limelight right now thanks to the Cambridge Analytica scandal and the introduction of the European Union’s General Data Protection Regulation (or GDPR), people are starting to ask questions about where their information is going and getting more concerned about how it’s acquired.
Right now, it’s easy for companies to regard privacy as an afterthought, but stakes are being raised. Half of Americans feel their personal information is less secure than five years ago, and people are now more concerned about internet privacy than they are about losing their income.
New legislation like the GDPR is starting to shift that balance by requiring companies to tell people what information is being collected and how it’s being used, as well as to give them the right to delete all their data. In the not-so-distant future, we just might evolve to a point where people consciously opt to lend their information to a site for a given period of time, rather than unwittingly give it away forever.
This will be a great win for personal privacy. But it will also put the onus on retailers to show consumers a real return on the personal info they share. One company, like it or not, that does an exceptional job at this now is Amazon. Their personalization engine creates value for consumers by whittling down the milliodatans of products they sell to the select few that are most relevant. You go to the site to browse, but because the company has a record of all your past purchases and every click you’ve ever made on the site, the front page is going to be uniquely customized to your needs.
It works amazingly well. It also requires reams of personal data. The question going forward is whether retailers will be able to convince consumers to share the sensitive information necessary to make that kind of curation possible.
Getting to true personalization
Despite the growing volumes of personal data scraped off the web, the reality is we’re still a far cry from seeing the kind of personalization offered by a great salesperson like Sal. Those annoying banner ads for sunglasses may know you like RayBans, but they probably don’t know you need polarized prescription lenses and have astigmatism. Right now, most tech still dumps us into big demographic buckets, without actually seeing us as unique individuals.
Platforms like Dynamic Yield and Adobe Experience are doing a better job every day of more accurately gathering and guessing consumers’ personal preferences, and in the future this intel may well lead to unique landing pages curated to individual interests and needs. The end goal: create an experience so cool and so compelling that you’ll willingly lend your info to help make it even better — just as you’d happily volunteer size, cut and color preferences in your favourite brick-and-mortar store. Here’s hoping we get there sooner rather than later.