Getting up close and e-personal

In most high-street stores, the best shop assistants are the ones who size you up and tailor their sales pitch. They know your habits through basic profiling, your needs with a few questions and your desires as they observe you browsing in-store. Now, this personal approach to retail is fast maturing on the web.

“In the past, retailers asked ‘Will my customers visit us online?’ Today, the question is ‘How can I get customers to shop more online with me and not with my competition?’ The answer is personalisation,” says John Raap, chief commercial officer at Fredhopper, a global leader in on-site search, merchandising and personalisation.

The global e-commerce landscape is continuing to evolve rapidly with retailers eager to mimic bricks-and-mortar experiences in their online stores. This involves the right blend of on-site search and merchandising. Together, they can help mimic the in-store experience of product placement, convenient shopping and checkout experiences, as well as brand consistency.

“Retailers are being challenged to come up with new ways to retain customers and ensure brand loyalty online. Offering personalisation is the next natural evolution that will enhance current merchandising strategies,” explains Mr Raap, whose company Fredhopper works with more than 200 retail brands globally, including Thomas Cook, Debenhams and Asos.

“When you add that little extra touch, your customers notice and respond, so by offering a more customised experience, each shopper will feel as though your brand is made just for them.

“Retailers that want to excel online must always first ensure their search and merchandising are optimised, constantly updated and refreshed.”

The next frontier is adaptive personalisation, where the online retailer customises the shopping experience on the fly

Then the smartest retailers will use big data, coupled with the latest technology, to find new ways to make every shopping experience personal. This strategy goes beyond simply remembering a previous shopping trip and offering up something similar.

“Current personalisation techniques are based on algorithms and are usually applied to recommendations on product detail pages or some landing pages,” Mr Raap continues. “But an average of 70 per cent of all retail site traffic takes place on search result, navigation and category pages. This is the kind of real estate where intuitive, less obvious personalisation can really take effect.”

Many retailers talk about offering a personalised service, but in reality most e-commerce sites just apply segmentation. Grouping shoppers into various types and then offering items which might appeal to that specific demographic.

“Retailers will need to invest more in advanced personalisation that is more intuitive and granular. It’s not just a matter of turning personalisation on and off. Companies will need to personalise a specific row or even a single product in their search or navigation pages to appeal to each specific customer,” says Mr Raap.

The next frontier is adaptive personalisation, where the online retailer customises the shopping experience on the fly. This is based on behaviour and studying click-through patterns, as well as real-time activity rather than past purchases.

“A shopper may be looking for dresses for his girlfriend during his last visit. But this time, he’s shopping for jeans for himself. Advanced algorithms can spot the difference and act,” Mr Raap explains. “But for the best effect, retailers should blend current behaviour with more static customer data from previous purchases, like colour affinities, sizes or birthdays.”

There are no doubts in the retail industry that strategies which deliver the right message, at the right time, on the right channel will be successful in the e-commerce marketplace. Think of walking into a physical shop and the “new arrivals” shelf is personalised just for you. Standard merchandising can take care of the rest of the shelves. Personalisation has already done its job.

“However, there are challenges. Personalisation is different for every retailer. You must first know what your customer wants before you can deliver what they need. There are also different kinds of personalisation for different levels of interaction. It’s important to get the right formula for your brand,” says Mr Raap.

“Customers often don’t log in until they are ready to check out. So it is important to find personalisation techniques that work around anonymous shoppers or encourage shoppers to sign in sooner.”

Off-the-shelf technology cannot deal with this type of personalisation. You also will not find your solution by copying other retailers. What you need instead is to collect and analyse large amounts of customer data to discover what is really relevant, analyse it and apply machine-learning.

“Small, incremental personalisation efforts and accompanying A/B testing can help to determine what works best for your audience. It will also help you to collect more data. You’ll learn a lot simply through practice,” explains Mr Raap.

App users are a captive audience since they are always logged on and they are happy to share data. The mobile marketplace is therefore a great proving ground to test personalisation techniques. Online shoppers are sometimes happy to give up some data if the retailer provides a nice incentive, such as a discount or reward.

“But be careful about the kind of personalisation you apply to mobile,” Mr Raap warns. “Standard, out-of-the-box personalisation tends to fall away on the mobile interface. There’s simply not enough real estate to support recommendations. This is where search and navigation personalisation is crucial.”

There is no end-game for search, merchandising or personalisation. All three are constantly changing and all three can always be optimised further. “The key is to get started and keep working. Soon, you’ll discover the best time, place and amount of personalisation for your audience,” Mr Raap advises.

Fredhopper is at the forefront of on-site search, navigation, merchandising and personalisation. And is working with leading retailers and brands in a bid to improve the online experience and help e-commerce providers achieve better conversion rates.

“As e-commerce matures, we find retailers need to fight for every purchase and have to focus more on retaining customers than growing their customer base. To deal with this new reality, retailers need new strategies and technologies,” Mr Raap concludes.

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