FITA INSIGHTS
By
Biki John
May 5, 2021
4 min read
This week marks the continuation of our personalization series. To launch this theme, we published an article that focused on the importance of personalized shopping in today’s e-commerce climate. This week we will be exploring how Amazon set itself apart from other e-commerce stores by making commendable strides in personalizing their customers’ shopping experience.
The Value of a Personalized Online Experience
Today’s shoppers want a fluid shopping experience across a retailer’s communication channels. In addition to this, they crave real-time personalization and for online stores to highlight products that are tailored to their needs and preferences.
A survey done by BCG showed that “when the shopping experience was highly personalized, customers indicated that they were 110% more likely to add additional items to their baskets and 40% more likely to spend more than they had planned.”
Over the years personalization has become more deeply rooted in the customer experience. A survey conducted by HubSpot showed that 74% of online shoppers do not like when websites show them offers and ads that do not align with their needs or interests.
Savvy retailers know that when carried out properly, personalization can support a business’s key objective – to convert browsers into customers. They are also aware that to retain brand loyalty, the shopping experience offered needs to be tailored, seamless and fast across all their touch points.
In a smartphone era that’s void of human communication, a personalized online experience is a key way of bridging the gap between the offline and online shopping experience. So personalized marketing can make customers feel more connected to a retailer’s store which increases loyalty.
Offering a unique experience throughout a shopper’s journey is likely to put a financial burden on online stores. Rather, the key is to use technology to personalize the most important touch points.
How Amazon’s Personalized Shopping Experience Paved the Way in Retail
Considering that when Amazon launched in 1994, Jeff Bezos and his wife were selling books out of their garage, it’s a remarkable feat that it was able to grow into the global empire we know today.
In one of our earlier articles, we focused on how apparel retailers could look to Amazon to improve their position in the competitive apparel retail sector. In this article, we are more focused on the achievements Amazon has made in offering customers a tailored shopping experience.
Amazon has taken specific measures to optimize their customers’ journeys, particularly through the recommendation engines behind their “Frequently Bought Together” feature.
Putting the customer’s needs and preferences first have played a key role in Amazon’s success which is why it’s revered for setting the blueprint for personalization. As the retailer has evolved over the years, here are some of the features it has introduced to embed personalization into their customers’ shopping journey:
In 1999, Amazon made it possible for shoppers to enter and save their payment information and shipping preferences for future purchases. It was called one-click purchasing and this intuitive feature put it ahead of the masses when it came to shaping the personalized shopping experience.
In 2010, Amazon introduced product recommendations to its customers. In the early days, this feature gave customers the option to buy items that were related to their purchase. Eventually, Amazon added more recommendation features like the ‘Your Recommendations’ link which allows customers to view a page of products that have been selected from different browsed categories (with the aim of showing the customer products they are likely to be interested in and buy).
Amazon continues to add more features that support retail personalization like its ‘Frequently Bought Together’ feature. This upsell feature is fueled by the browsing and purchasing habits of customers and is designed to encourage shoppers to add more products to their order.
Amazon’s personalization efforts have more than paid off. “35% of all their sales are generated by the recommendation engine, thanks to their ‘deep learning’ technology that makes recommendation engines learn and scale efficiently, which looks at people’s purchasing habits and makes the appropriate pairing decisions.”
The Future of Personalized Shopping for Amazon
As Amazon is a customer-centric business, there is no doubt that it will continue to fine tune its model so that it finds new ways to guide its customers. With regard to what lies ahead for Amazon in the personalization field, it will be interesting to see how it develops its voice shopping features – Alexa (virtual assistant) and Amazon Echo. As more people rely on these devices to recommend products they are likely to favor, there is no doubt that Amazon will find new ways to ensure these features provide a more enjoyable shopping experience.
Merchant Words rightly claim that what “has continuously driven Amazon forward is their focus on customer demands and desires,” so it will be interesting to see what new tools or features Amazon introduces in their bid to offer their customers’ an unmatched personalized shopping experience.
We advise that e-commerce stores keep a close eye to see what they can learn from this e-commerce giant and more importantly, how they can utilize Amazon’s success to improve their business.
Photo credits: Daniel Eledut and Piotr Cichosz
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