AI-Driven eCommerce Personalization in the SME Market and The Key Benefits
A Society of Artificial Intelligence Bed Fellows
2020 heralds the start of the decade, where people are familiar with Artificial Intelligence (AI). AI home living in Netflix, Alexa, Google, and Apple, home security, and utility management is quickly becoming the norm.
We know customers’ lifestyle expectations are rapidly changing, now commanding immediacy, immersion, relevance, ease, and convenience. With AI slowly becoming hardwired into society in some shape or form, these expectations require attention across both the offline and online world.
How Can SMEs Compete?
We also know that providing a good customer experience online is essential to any business that trades online. But how can SME’s effectively compete with their larger competitors with their smaller budgets and lower workforce levels?
One aspect that SMEs can easily match, or even surpass their larger counterparts like for like, is by offering their customer’s personalized online shopping experiences. This is easily fulfilled through the adoption of AI-driven eCommerce personalization into their online tech stack.
Implementing an effective e-commerce personalization strategy can be one of the most cost-beneficial decisions SMEs can make towards growing their business online. The fact is, now, in 2020, 85% of internet users expect and accept personalization as a part of their online retail experience, and those businesses who fail to step up will struggle to keep up.
‘85% of internet users expect and accept personalization as a part of their online retail experience.’
What Is eCommerce Personalization?
In a nutshell, AI-driven eCommerce personalization is all about providing your online customers with a relevant and targeted online shopping experience.
The entrenched and ever learning AI can and will predict what customers might be looking for and show them relevant products, brands, and offers that will engage them to buy and, in most cases, spend more than was originally intended.
Customers will be so delighted with their experience that they will return to your website safe in the knowledge that they will easily find what they are looking for and probably be rewarded for their loyalty.
Suitable for All Business Sizes
Adoption rates of AI-driven eCommerce personalization are growing quickly in the SME market, and the preconception that AI applies to enterprise-sized businesses is being heavily challenged. Most SME businesses have good online stores on which they sell to multiple customer groups. The prerequisite checklist of having omnichannel selling routes, bricks and mortar, and multinational web stores is now redundant.
Adopting eCommerce personalization can be hugely beneficial to all businesses regardless of company size, product range, or customer data.
If this is something, you haven’t yet considered, here are six great reasons why eCommerce personalization should be easily added to your SME tech stack.
- Increases Your Online Revenue
Websites that offer targeted offers, promotions, and show products or brand recommendations relevant to the visitor are three times more likely to convert to a sale than those that don’t. Gone are the days of a vanilla web experience. Customers now expect a degree of personalization when shopping online, helping them make the right choice and seeing additional relevant options that will be of interest to them. Whether a visitor is on your store for the first time or they have browsed a few times, eCommerce personalization enables them to see content, offers, and promotions that are relevant to them throughout the entire shopping experience, changing and adapting in real-time with every click. The ROI that is experienced by using affordable eCommerce personalization solutions will outweigh many other marketing investments. Businesses in the SME market should usually expect a 26% increase in revenue in the first year.
‘Businesses in the SME market should usually expect a 26% increase in revenue in the first year.’
- Builds Customer Loyalty and Lifetime Value
Customers love a good online shopping experience. Many usability factors lead to a good experience. These include;
- web speed
- effective search and filters
- ease of use of checkout and payment option
- a convenient and affordable delivery and returns policy
But how do you stop people bouncing from your site as soon as they come across these issues? The answer is by creating relevance and a 1-2-1 dialogue with them as soon as they arrive. By engaging with customers as soon as they land, you will start to build trust with them, establishing that they are not just a web stat but a valued customer that you would very much like to forge business with. Good relationships build loyalty, build your customer retention rate, and build your customer lifetime value.
- Build Your Customer Retention Rate
As an SME business, you are probably already investing in offsite and onsite SEO, PPC, social media, affiliate marketing, email marketing, display, and retargeting to gain more new visitors to your website. I’m sure that it’s a substantial part of your overall budget, but did you know that it is seven times more expensive to acquire a new customer than it is to retain one? Most businesses see a customer churn of between 20% and 40% each year. With eCommerce personalization, it is easy to minimize this churn more towards the lower 20% mark. The dynamic nature of AI-driven eCommerce personalization means that your site will always be relevant to each visitor. This, coupled with providing incentives and discounts where necessary, will keep customers coming back for more.
- Increases Your Average Order Value
Once a customer starts to visit your site and purchase regularly, it’s then time to incentivize them to increase their spend with you. There will be a tendency to see each of your customers fall into a certain price point, and, with eCommerce personalization, you can encourage them to increase the frequency of purchases and the amount spent. This can be done through AI product recommenders for cross-sells, upsells, and free delivery on basket value incentives. Not only does eCommerce personalization create loyalty, but it encourages customers to spend a little more (between 16% & 20%) each time they purchase.
- Saves You Time and Money
Translating the enormous amount of real-time customer data that your company creates into something tangible and effective can be extremely time-consuming, labor-intensive, and costly if misinterpreted. The beauty of AI-driven eCommerce personalization is that all these challenges are taken care of.
Through advanced algorithms, the AI will know everything about your customers’ behavior, including;
- who they are, what their profile is
- which customer segment they should be in
- where they are located
- previous history of behaviors and purchases
- where they have come from,
- Likes and dislikes
With this real-time data, the AI ensures that the best recommendations are presented in real-time, in the correct places, and at the correct times for maximum conversion. Freeing up your time to concentrate on other areas of your business while the AI does all the hard work for you.
- Works with Any Amount of Data
The more you understand about your customer data, the better an online experience you can offer. But what if you don’t have a large amount of data?
SMEs could have low data sets for a few reasons. Whether it’s because they are just establishing themselves or having a niche high-end product range, the reasons may vary. One myth to bust here is that eCommerce personalization software needs a large amount of data. Using sparse data analysis algorithms, the AI finds and recommends products with similar product properties within the core data set. This algorithm is highly effective in personalizing recommendations for businesses with low customer data volumes.
SMEs with low customer data volumes can see results as quickly as enterprise-sized businesses, safe in the knowledge that the AI will be constantly learning and building data 24/7 from the minute it’s implemented.
To learn more about AI-driven eCommerce personalization tailored for the SME market, visit PureClarity, and ask how soon you can start to reap the rewards of these great benefits.
Author: Joanne Burman
Head of Marketing