A Thorough Analysis of Personalisation in eCommerce and Digital Marketing

Unpacking the Pros and Cons of the Digital Shopping Experience: A Thorough Analysis of Personalisation in E-commerce and Digital Marketing

Have you noticed how much emphasis there is on digital marketing and eCommerce this year? With shopping online behavior has changed, more and more businesses are turning to online methods for success. Things like SMS, Instagram Ads, TikTok, and Buy Now Pay Later options are becoming extremely popular, frequently used by different segments of society and reaching customers on platforms they visit the most. Even as physical stores reopen, I personally find online shopping more convenient. Generally, I have a clear idea of what I want to purchase, and I may visit a physical store only when I have spare time and wish to explore new products. In fact, online sales are booming for many businesses, as more people shift towards online shopping.

According to the Global Customer Insight Pulse Survey conducted by PWC in February 2023, there is research on shopping habits. When considering in-store shopping, there has been a decline from 45% in 2022 to 43% in 2023. This suggests that customers have shifted their shopping preferences towards online platforms.

With an increasing number of shoppers turning towards digital channels, businesses are fighting to cover every digital channel and attract both new and existing customers as quickly as they can.

What's the next big thing in the digital shopping experience space? I’m going to give you two examples. Firstly, delivery methods like one-day delivery or Uber delivery parcels, are a fast growing trend to keep a watchful eye on. Click-and-collect, is surging in popularity, not only for groceries but also for online retailers who are realising the potential of offering this service as part of their enhanced CX strategy. One-day delivery is no longer the only competitive way to satisfy customers and these new options have only hit the market in the last few years - proving to be the evolution of on demand services.

Another important trend is payment methods. Afterpay is a must-have if you want your website to be competitive, and of course, PayPal is always an option. As you have seen, there are many new alternative options to consider as a standard checklist for online businesses. These options are not only for being more outstanding but also for providing a common convenience for customers. If you think these options are only for D2C businesses, not anymore! I recently spoke to a finance professional who told me about their equivalent of AfterPay which is available for small business owners andB2B too. This blew my mind - how convenient it is to be competitive in both the D2C and B2B markets!That’s cool, isn’t it?

You're probably wondering how to offer the BEST option for your customer, right?

My advice would be to focus your attention on deeply understanding your customer, in knowing their preferences inside out so you can recommend products and provide services you’re sure they’ll love. At this point, this is how personalization usually starts for most online retailers.You can use a solution provider or any technology with which you feel comfortable implementing, but it must be reliable to ensure accurate data. This can lead to your website recommending products based on customer behavior, advising them on items they may not have even known they wanted!

You don’t necessarily need to be the BEST option, instead focus on understanding your customers better, try not to make assumptions and make information as transparent as possible so they have fewer questions when they visit your website, leading to a better experience of your brand.

Now you understand my point. If a business not only provides a better shopping experience, but also offers shortcuts for customers based on their preferences, it can make the business more competitive in the industry in 2023. This strategy is called "Personalisation".

So, what is personalisation in eCommerce and digital marketing?

Personalisation is gaining traction, and many businesses are using it to improve customer satisfaction. For example, AI has been a big talk this year, with many experts discussing whether AI will replace humans. What do you think? I can provide some key reasons why most people are afraid of AI replacing humans. However, AI represents technological advancements that improve the ability to personalise online experiences. Let me add a bit more detail here: AI can not only analyse customer behavior and come up with product recommendations but also match this with personalised pricing based on the customer's behavior. This can help customers find what they are looking for and feel comfortable with their purchases, which is a very good point for customer satisfaction. And that's not all; AI-powered chatbots are also popular tools as personalised assistants that can answer customer questions in real-time based on their preferences.

So, that’s why personalisation has been popping up everywhere lately and spicing up many businesses' strategies. And you know what? This is a strategy that can benefit multiple digital channels. That’s why it is one of the hot topics in 2023.

I can suggest using the email channel to emphasize how personalisation can be utilized effectively. For instance, it can serve as a follow-up method based on customer behaviors. If a customer has recently shown interest in a specific product, you can send them an email providing more details about the product or even offer an exclusive discount. Another example is customised product recommendations, which are highly popular among online retailers aiming to enhance the customer journey and satisfaction. These recommendations are based on a customer's browsing history, purchase history, and preferences. Such personalised recommendations ensure that customers discover only relevant products, making their decision-making process easier.

As someone who is a digital marketing and eCommerce professional and frequently shops online I have experienced the benefits and drawbacks of personalisation in eCommerce and digital marketing. Let's explore the pros and cons of this trend and its impact on our online shopping experiences.

Personalisation can certainly improve the digital shopping experience by making it more convenient and efficient. Let's take Amazon as a great example, as their system is very powerful, especially in terms of SEO analysis. When I shop on Amazon, the site recommends products based on my past purchases, browsing history, and search queries. This saves me time and effort because I don't have to sift through pages of irrelevant products. You can see this example on the Amazon homepage, which sets it apart from other D2C sites.

(This screenshot is from the Amazon website. I searched for ghd a week ago, and when I opened the site again, you can see that there are two recommendations based on my behavior on the main homepage)

Another way personalisation enhances the shopping experience is through customised email marketing campaigns I like it when retailers send me promotional emails with products that fit my interests and needs. It feels like they're paying attention to me as an individual. On top of that, personalisation can create a sense of brand loyalty, which is a must-have program nowadays. It's like the retailer is showing an understanding of their customer's preferences, making the customer more likely to return to their site for future purchases. It builds a connection between the consumer and the brand, which can be a win-win situation.

However, there are also challenges and risks involved in implementing personalisation in e-commerce and digital marketing.

One of the main concerns is privacy, which is a very sensitive topic worldwide. Collecting and using consumer data for personalisation purposes can be seen as intrusive and even creepy. It’s important for retailers to be transparent about their data collection practices and allow consumers to opt-out if they choose. This can also indicate that the data collected by retailers may be of low quality when they analyse it, leading to errors or mistakes in the implementation of personalisation.

Another challenge is the potential for personalisation to backfire. For example, if a retailer recommends products based on a consumer’s past purchases, but those purchases were for gifts or one-time uses, it can lead to irrelevant recommendations and frustration. Or, if a retailer sends too many promotional emails, it can come across as spammy and turn consumers off. I would say those examples happen to be seen from many brands frequently.

The most interesting point of the negative side is that personalisation can create a filter bubble, where consumers only see products and content that align with their existing preferences and beliefs. This absolutely affects the limitation in terms of exploring new products.

So, how can retailers strike the right balance with personalisation?

When it comes to data collection and control over customers' information, it is crucial that businesses prioritize customer trust and privacy. For example, businesses can benefit greatly from customer reviews, as it not only allows them to gain insight into their customers but also helps them improve their brands, products, or services. This openness is the kind of space businesses provide for their customers. However, it can also be tricky if the reviews are used in the wrong way. Another point is assumptions should not be made about customers' needs or preferences, and the final decision should always be made by the customer.

Ultimately, personalisation in e-commerce and digital marketing has both benefits and drawbacks. It can enhance the shopping experience by making it more convenient, efficient, and engaging. However, it also presents risks and challenges, particularly related to privacy concerns. Consumers are increasingly experiencing friction due to the control exerted over their personal data. According to a research conducted by PWC in 2023, when asked about their level of concern regarding personal data privacy during routine activities and interactions with different entities, almost half of the respondents expressed being extremely or very concerned when engaging with social media (47%). Another example is the potential for filter bubbles. By striking the right balance and prioritising consumer trust and diversity, retailers can make personalisation a valuable tool for enhancing the shopping experience.

I hope you found this written interview helpful. If I were to sum up my thoughts in just two takeaways, they would be as follows. First, while personalisation can have its pros and cons, I think it can greatly enhance your understanding of your customers. After all, the more you know about your customers, the better equipped you are to market your products effectively which doesn't sound bad at all! And second, don't limit yourself to just one channel when implementing personalisation. Give it a try across multiple marketing channels and it may turn out even better! And of course, be careful in how you implement this strategy to ensure that you take full advantage of its benefits.

Frame Paladsang, Digital Marketing and eCommerce Specialist for Chemcorp International

Join Frame Paladsang on the All Star Panel to hear them on the Rethinking segmentation – "As the path to purchase becomes exponentially more complicated, how can you stay relevant and measure behavior in a way that allows you to anticipate future changes and capitalise on emerging trends?" on 7th June @ 3:10pm at Equarius Hotel,Sentosa