The Benefits of E-Commerce Personalization and 5 Must-Haves to Achieve It

In an era where tailored experiences are the currency of the digital world, the major benefits that come along with effective e-commerce personalization have become every e-commerce marketer’s north star. The first key question to answer is of course, do I have what it takes to achieve that perfection? Below, I’ll dive into the must-haves to efficiently accomplish e-commerce personalization and the benefits of those efforts. 

1. Clean product tagging and catalog

A clean product catalog is the foundation of effective e-commerce personalization. This means every product detail tagged – from its image, description, price, to availability – is accurate, consistent, and easily accessible.

Clean data leads to clear insights. Imagine recommending out-of-stock items or mismatched products to a shopper. It’s both embarrassing and potentially devastating to building customer relationships.

These are the main aspects that you should cover to achieve a clean product catalog:

  • Good data hygiene: Ensure consistency among your product attributes. Just as you wouldn’t mismatch socks, avoid jumbled product tags for a seamless user journey.
  • Banish duplicate tags: Periodically cleanse your system of duplicate products. No one needs to see the same item twice – it's not a magic trick.
  • Fill in the gaps: Generate any missing product properties with smart product inventory management system, a reliable generative AI, or a data enrichment solution from an AI e-commerce platform like Crossing Minds. It’s like ensuring every book in a library has a summary.

Your users don’t want to navigate a maze. They seek a clear, coherent journey that is one step ahead of them.

E-commerce personalization benefit achieved from clean product tagging and catalog: Customers discover products that speak to them sooner, leading to quicker and more frequent conversions.

2. Capture real-time customer interactions on your website

Tracking and saving how users interact with your website during a session – what they click, view, or even how long they hover over an item – is critical to achieve successful e-commerce personalization. It’s the digital version of watching a customer windowshop.

Why is it important? These interactions give invaluable insights into user preferences, intentions, and potential pain points. If a user consistently clicks on red shoes but never buys any, there's an opportunity (or a problem) worth addressing.

Here’s how you capture customer interactions effectively:

  • Leverage GA4 from the outset: Google Analytics 4 is a treasure trove of insights. Configure it thoughtfully from day one. And the cherry on top? It’s now free to export this data to BigQuery.
  • Consider a CDP: If your resources allow, use a Customer Data Platform (CDP) to collate, analyze, and act on user data.
  • Track the elusive session ID: While capturing full user IDs can be challenging without log-ins or surviving cookies, you can always monitor session IDs. Think of it as recognizing someone from their silhouette, even if you can't see their face.

E-commerce personalization benefit achieved from capturing real-time customer interactions on-site: You’ll learn what makes your customers tick – even in the absence of third-party or demographic data – which allows you to personalize their experience to the best of your ability. 

3. Clearly defined KPIs

Before venturing into the dense forest of e-commerce personalization, ensure you have a compass (your KPIs) and a clear path (your business objectives).

Personalization is not an end but a means. If you don’t understand what success looks like for your business, you may end up personalizing things perfectly for absolutely no return. 

Here are some relevant points to consider when thinking about your KPIs:

  • Diversify KPIs across pages: The KPI you emphasize on your homepage might not be suitable for your cart page. While the homepage may prioritize click-through rate (CTR) to guide users deeper into your site, the cart might focus on strategies to increase the average order value (AOV). Understand the unique role each page plays in the user's journey.
  • Seamlessly connect KPIs: Personalization is a marathon, not a sprint. Ensure your KPIs flow logically and connect across the entirety of the customer journey. This connected view helps in crafting a coherent and effective strategy.
  • Beware the sirens of clickbait: Prioritize genuine engagement over shallow metrics. Use analytical tools that allow you to isolate KPIs per session, ensuring a more accurate understanding of user behavior and intent.

Understanding your KPIs is not just about numbers and targets; it’s about crafting a narrative that aligns with your business objectives while resonating with your customers. Remember, every data point tells a part of the story, so ensure it's a story worth telling.

E-commerce personalization benefit achieved from clear KPIs: Taking the guesswork out of how your campaigns are succeeding or failing will help you make more informed, intelligent business decisions on everything from marketing to merchandising.

4. Flexible tech stack for A/B testing

The road to perfect e-commerce personalization is a journey, not a destination. The landscape is constantly changing; your business is changing, as well as your customers. What worked yesterday may not necessarily apply tomorrow. This is even truer for personalization. 

Therefore, having control over your website or e-commerce platform like Shopify is essential. You will need a platform that not only integrates seamlessly with other tools but also facilitates A/B testing. Imagine tailoring two different suits and watching which one garners more compliments at the party. It’s like ensuring your smart devices can all communicate. 

Your intuition can often be misleading. A/B testing ensures you're making decisions backed by data and actual user behavior, not just gut feelings. Plus, as your business grows, your technology needs will shift and evolve. A flexible tech stack ensures that these shifts don’t translate into massive technological overhauls.

Here are some relevant tools for A/B testing:

  • All-in-One: Shopify
  • CDPs (Customer Data Platforms): Such as Segment or mParticle are great for integrating with a myriad of other tools.
  • API-first platforms: Such as Contentful or Strapi allow for smooth connections.

Remember, the ultimate goal isn't just to have the fanciest tech in town but to ensure it's used in a way that consistently provides value to your audience. Testing helps validate those valuable use cases. And who knows? Sometimes, Option B turns out to be the real MVP.

E-commerce personalization benefit achieved from A/B testing and a flexible tech stack: Real-time polling is genuine feedback that can help you adjust your campaigns and merchandising accordingly. Having software that works together seamlessly to ingest and distribute that feedback makes things much easier.

5. Focus on the future of privacy

I am sure that you want to build something that lasts. In today's digital landscape, striking the right balance between personalization and user privacy is crucial. As you will aim for better engagement and tailored experiences, you must also be diligent in ensuring the security and confidentiality of user data.

  • Session-based analytics: First thing’s first, shift the focus from individual user data and to session analytics. By analyzing user sessions, you can gather meaningful insights about user behavior and preferences without risking the breach of personal boundaries. This strategy is both effective and agile, placing the emphasis on the quality of the moment rather than the identity of the user.
  • The power of first-party data: As third-party cookies face scrutiny and phase-outs, first-party data emerges as the gold standard for businesses. Platforms like Google Analytics 4 have been designed with this paradigm shift in mind, helping you acquire actionable insights without compromising user privacy. 
  • Transparency is key, especially in Europe: The introduction of regulations like the GDPR in Europe underscores the importance of transparent data practices. If you are operating in or catering to European audiences, it's essential to articulate how customer data is used clearly. Clear communication not only ensures regulatory compliance but also builds and maintains trust. Users are more likely to engage with platforms and services when they feel their data is handled with care and transparency.

As the digital realm evolves, it is important to prioritize a dual commitment: delivering personalized experiences while upholding stringent privacy standards. Focus on session analytics, leverage first-party data, and maintain transparent communication.

E-commerce personalization benefit achieved from focusing on privacy: Changes to privacy guidelines can feel like laborious task that can jeopardize your store’s future, but the reality is session-based analytics and first-party data do a better job of predicting what a customer will buy. So even though you obligated to comply, it doesn’t have to be a bad thing!

In conclusion, the future of e-commerce personalization is much more than just a tailored email or product recommendation. It's about creating genuine value, fostering trust, and anticipating needs. All of these e-commerce personalize benefits make the customer experience much better, which can foster loyalty and improve sales. And while it’s tempting to jump straight into the glamorous side of AI-driven personalization, remember: a house (or in our case, a perfectly personalized user experience) is only as strong as its foundation. 

Alexandre Robicquet
CEO & Co-Founder

Alexandre earned his first two Master’s degrees in Mathematics and Machine Learning at the age of 23 from ENS Paris Saclay. Alexandre had his work published at the age of 21 and held two 4-year positions as a researcher under Pr. Sebastian Thrun (founder of Google X) and Pr. Silvio Savarese. He received a third Master’s degree in Artificial Intelligence and started on a path for a Ph.D but chose instead to work on building Crossing Minds full-time.