Today, it’s rare to visit an ecommerce website that doesn’t use at least some degree of personalization to improve the online experience. And research suggests it works: Accenture found 91% of consumers are more likely to shop with brands that recognize, remember and provide relevant offers and recommendations.
Despite this success, however, we have by no means reached the limit of what personalization can do. As technology evolves and we learn more about how consumers respond to personalized experiences, new trends and capabilities will emerge. With that in mind, here are five predictions for ecommerce personalization that are likely to surface in 2021.
AI-Powered Personalization Becomes More Transparent
There is a need to make AI decisions more transparent and less intimidating to consumers, and this is going to become more apparent in ecommerce.
For example, we’ll increasingly see AI-powered recommendation engines not only identifying the most relevant product recommendations to show to shoppers, but also automatically providing explanations that make it clear why and what data was used to select those products.
If a shopper is shown a shirt that’s “recommended for you,” he might be presented with a list of explanations such as, “it’s in your size,” “it’s slim fit like others you’ve purchased,” “it’s similar in color to your previous shirt purchases,” etc.
Image Recognition Creates New Possibilities
Online personalization engines will soon start to adopt image recognition functionality which will help them identify individual products within images and videos, as well as recognize specific colors and patterns.
Shoppers will be able to click on an item within a still scene or video, such as picking a side table they like out of an image of a living room or a handbag carried by a model in a street scene, and find out more about that product or add it to their shopping cart.
In verticals like fashion and interiors, this development means enhanced ecommerce capabilities to identify “shop the look” recommendations or to allow shoppers to more easily create their own look by searching for similar or matching products. It will also allow stores to create richer online experiences by presenting products as shoppable content within images and videos.
Psychographic Personalization Makes Its Entry
Ecommerce personalization and segmentation is commonly based on demographic attributes such as age, gender, and geography, as well as shoppers’ online behavior and preferences.
But it is more than possible that we’ll soon see the growth of new types of personalization that relies on psychographic profiling.
For example, algorithms being used to analyze visitors’ personality types: are they trusting, confident, or adventurous? This technology could learn the types of products, content, and online experiences that would most appeal in each case.
More of A Focus On The Long Term
Ecommerce stores today mostly use personalization to improve the customer’s online experience within the current visit – or if they return within 30 or so days.
Sooner or later, however, we’re going to see personalization supporting longer shopping horizons, thus looking at how people’s behavior now affects consumption patterns in the future. What does someone’s preferences and brand affinities in their twenties tell us about what their purchasing habits will be like in their 40s, for example?
Most likely, this kind of sophisticated personalization is going to focus on high price point purchases, such as cars. How does the brand of toy car people are given as kids, impact the auto brands they favor as an adult, for example?
Machine Learning Drives Opportunity Mining
There could be hundreds (or even thousands) of customer segments that a retailer can target with personalized experiences and content, and a lot of time and resources is eaten up in “mining” and researching the most profitable ones.
Machine learning algorithms will continue to help reduce this effort by providing a faster, more effective way to automatically pinpoint profitable visitor segments. As well as telling brands who to target, this technology will be able to advise on specific actions to optimize and personalize the experiences for those segments.
These are just some of the ways that personalization is likely to grow and evolve in order to drive richer, more relevant online shopping journeys in 2021 and beyond.
Jan Soerensen is General Manager, North America at Nosto