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Reaching the utopia of ecommerce personalisation – where are we now?

AI is helping deliver businesses smarter customer communications at the right time, but ethical, legal and technological challenges remain, according to experts

Online Shopping

While digital commerce is a relatively new voyage for many companies, with pandemic-induced lockdowns forcing businesses of all sizes to open up online, the unfinished quest to provide genuine and valuable personalisation for e-commerce customers is decades long. Along the way, there have been missteps aplenty – such as the “technical” slip-up made in early 2020 by insurer Aviva when wrongly addressing several thousand customers as “Michael” in an email.

Those leading the charge have spent years trying to create bespoke experiences and digital exchanges that provide consumers with precisely what they want, when they want,wherever they want. But achieving tailored, value-adding interactions often remains elusive, with many obstacles impeding meaningful progress. 

What, then, does the utopia of ecommerce personalisation look and feel like? Anirban Bardalaye, chief product officer at Bloomreach – a cloud-based ecommerce experience platform specialising in marketing automation, product discovery, and content management systems – says: “It’s understanding who the shopper is, what their interests are, what they have done in the past, what they are likely to do in the future, and using that to deliver genuine value, irrespective of the channel used to engage with the brand,” he says.

Ideally, this communication could be via on-site search, email, SMS, or any other digital method. The key, continues Bardalaye, is crafting interactions unique to that individual, irrespective of channel, by leveraging all available data, from their browsing and purchase history to real-time site behaviour.

Marcus Oughton, global head of digital commerce at footwear brand Clarks, believes personalisation should “be about surprising and delighting customers – a marketing fundamental, by ensuring that content and offers are relevant” But he cautions against fixating just on “personalisation” per se, and believes the value is in driving a truly ‘connected retail’ experience which is a more beneficial and strategic approach – both for the consumer and the brand. Aligning communications, the proposition and brand experience as well as access to purchasing across digital and physical brick and mortar environments. 

James Rose, head of UK, Ireland and North America at sexual wellness ecommerce company Lovehoney, echoes Oughton’s point around simplification. “Everyone’s trying to build something much bigger when it comes to the utopia of personalisation,” he says. “It becomes this big scary monster that is unfeasible to deliver.” Instead, Rose recommends starting small and gradually building more sophisticated experiences over time. 

Interacting with intent

For Tony Preedy, managing director of Fruugo, an artificial intelligence-powered online marketplace operating in over 40 countries, personalisation is more about styling interactions to the customer’s location and intent at a particular moment. He argues less weight should be given to historical data. “When the customer comes to your website to buy thing x, they’re looking for thing x,” he advises. “So, optimise that aspect of their journey in the here and now, rather than pay too much attention to what they did six months or a year ago.”

Preedy explains how Fruugo employs personalisation primarily through targeted advertising and delivers value for businesses by connecting them with high-intent consumers abroad. “We’re effectively using personalisation by targeting those adverts to consumers based on their behaviour.”

Rather than explicitly reflecting users’ data back at them, Fruugo shows relevant ads to audiences more likely to convert. This win-win value exchange earns consumer trust and engagement. 

Bearing in mind cross-border transactions are projected to drive 60% of ecommerce growth over the next five years, according to Preedy, are UK businesses limiting their reach due to cultural norms borne out of island living? “British retailers have a danger of being too insular, too locally focused,” he says, compared to Switzerland and Southeast Asian countries at the other end of the scale.

Sian Davies, global head of digital consumer insights at drinks company Diageo, agrees personalisation means different things at different stages of the customer journey. She posits that mass brand communications need not be overly tailored, but relevancy increases closer to conversion. 

“When someone is actually looking to purchase, particularly within ecommerce, that’s when personalised recommendation becomes incredibly important,” Davies says. In addition, pitching the right tone and using appropriate language are vital. Advancements in AI are improving capabilities to provide a better service. For instance, even regular whisky drinkers might not know the difference between “peaty” or “floral” tasting notes. 

Having realised that many potential buyers have this sinking feeling, Diageo has developed a “what’s your whisky” tool that asks users questions about their preferred flavour profiles to recommend the perfect bottle for their palate. The interactive online quiz guides drinkers through a potentially intimidating category using accessible vocabulary. “It’s also useful for gift-givers spending £100 on a bottle of whisky,” Davies adds. “Personalised content is critical in reassuring people for high-cost and potentially high-risk purchases.”

Where personalisation meets expertise

Building on this theme, Bardalaye points to Bloomreach Clarity, a new “conversational shopping product powered by the latest advancements in generative AI”, trained on real-time customer data, a business’ product catalogues, and search information. Essentially, a virtual expert provides shoppers with product expertise and recommendations depending on their behaviours, without being intrusive.

He gives the example of North American alcohol retailer Total Wine & More using Bloomreach Clarity to guide customers to suitable bottles. During these interactions, the brand gains valuable first-party data to inform future personalised engagements across channels.

“This world of online conversations and generative AI is going to take personalisation to the next level,” Bardalaye says. “It allows the brand to understand the user even more.” This breakthrough is crucial, he suggests, because there is a common “seeker shopper” pain point – “you know you’re looking for something, but you don’t know what exactly” – that many businesses struggle to solve. 

In-store sales assistants provide astute guidance. But online shoppers typically rely on broad searches and filters. Shorter, less specific queries lead to higher dropout rates. Hence, tools like Bloomreach Clarity offer a glimpse of the future of ecommerce personalisation.

Oughton, for one, is looking forward to leveraging AI and crunching more data for better outcomes for both brands and customers. “Until recently, the idea of ‘personalisation’ was putting the first and last name at the top of a generic email,” he says. Given the vertiginous rise of customer expectations, retailers must move with the times and be smarter with data to avoid putting off consumers. Oughton cites “relevancy and frequency” – not just content – as essential personalisation components today. Brands can also raise their appeal in other ways, such as having channel exclusive and launching unique collaborations.

Multiple sources of data

Despite new opportunities, brands face many difficulties in realising the personalisation ideal. Lessons are still being learnt from the uptick in traffic during the coronavirus crisis. Given the alcohol category enjoyed “10 years” of ecommerce growth in “just three months”, Davies says it might be hard to know where to invest without looking carefully at data insights. 

It’s about long-term vision with quick returns. As Davies says, the best strategy starts from understanding consumer needs, not flashy new tech. “We need to ensure we don’t fall into the trap of letting technology be a solution in search of a problem.” Resources should go where they most improve customer experiences, she adds.

What companies shouldn’t do is skimp on gathering quality data, stresses Davies. Diageo typically combines digital insights like search with traditional research. This holistic view builds a nuanced picture of customers’ drivers and motivations “We’ve found that you tend to get the richest and most valuable insights when you use multiple sources,” she says. “Search and social listening help us understand consumers even better.”

Keeping an ear to the digital ground is vital to adapt to fast-changing shopping behaviour. For example, rising demand for low-alcoholic drink options has precipitated Diageo’s launches of Gordon’s 0.0% gin alternative and, more recently, rum brand Captain Morgan Spiced Gold 0.0% Alcohol-Free Spirit.

Some companies – and sectors – are limited in their access to data. Rose expresses frustration at being unable to advertise Lovehoney’s products as freely as others on social media. “It’s heavily restricted. We are an adult brand for people over 18, but are often treated as explicit, meaning we can’t advertise our sex toys on Meta’s platforms.” 

As a “workaround”, Lovehoney has introduced a brand ambassador programme so influencers can review gifted products on social media channels. Rose has also improved access to the community forum so interested people can seek guidance from other customers.

Rose asks rhetorically: “When is personalisation too much? When is it too personal.” It’s a particular challenge for Lovehoney’s sexual wellness shoppers, who demand high discretion, generally. “Customers might not want you to bring up data or information that they may have given either inadvertently or explicitly to us through their interactions,” says Rose. Little surprise, the company’s SMS push notifications for purchase reminders were deemed a turn-off and quickly ditched following the negative feedback.

Bardalaye points out that email “definitely remains the most powerful engagement channel” and is much cheaper than SMS, for the moment. Legacy technology also inhibits connected experiences. He describes the complex web of vendor point solutions brands must stitch together for personalisation across channels.

“Personalisation is not one size fits all,” Bardalaye concludes. “There are different nuances of it that we need to think through. But we should be excited about the journey ahead.”

Please contact Bloomreach to find out more.