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Notes from eTail West: Part 1 - The Prioritization of Personalization

From February 17-20, I left the frigid east coast to visit Palm Springs for eTail West, the premier online retail conference attended by many eCommerce innovators. I have been attending this event for many years and I was glad that it was once again in Palm Springs - not just because of the great weather and palm trees but it is where my mind associated with the event and the venue - since I first attended eTail West years ago.
After a great week of learning and networking, I wanted to take a moment to share my key takeaways from the conference; both from speeches and workshops I gave as well as those I attended, in a three-part blog post series. I hope these posts will provide insight into some of the key trends driving innovation in eCommerce. And for those of you who couldn't make it here is a little taste of Palm Springs.

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I see much of the programming focus at eTail West, and the convergence of eCommerce trends in general, as falling under the umbrella of Customer Experience. Customer Experience could be the perceived speed and security of your site, the way it handles the many different devices a customer uses, or how you bridge the gap between online and brick-and-mortar. Let's follow the Customer Experience path and touch on three particularly notable areas of development in the eCommerce space: Personalization, Mobile Usability and Responsive Web Design. One focal point of my eTail West Keynote, "Trends shaping the future of Commerce," is the prioritization of personalization among online retailers. Forrester reports that 75% of retailers put personalization technology as a top investment priority, making it the number one focus for eCommerce companies in 2014. Their priorities are well placed -- tools like optimized search, localization and dynamic recommendations can have a significant impact on engagement and overall revenue for retailers.

Many retailers I've spoken to want to advance their personalization efforts but have difficulty articulating exactly how to do that beyond the most common examples such as Product Recommendations, Customer Name and Shopping Cart Reminders. They realize that they have many useful pieces of data but getting all this Big Data together in a way that is useful can be difficult. This is also noted in a recent Retention Science Marketer survey that highlighted the lack of personalization efforts from some of the biggest online retailers in the US. Nearly one-third of online retailers with annual marketing budget exceeding $1 million do not yet personalize their website in any way.

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Data source: Marketing Profs

Throughout 2015, I'll be keeping a careful eye on the efforts not only among personalization technology innovators, but also to see how those playing catch-up with the market leaders identify and implement new personalization strategies. The customer experience you provide is a key differentiator from your competition and customers expect a seamless experience across the many different devices and networks they may use to access your site.

While there are many vendors making great strides in developing solutions to handle some of these common problems with personalization such as Big Data, data fragmentation and cross device personalization, there is another element to consider when thinking about ways to make sure your content caters to your visitors - anonymous personalization. It is very valuable to be able to properly target and optimize the experience for your return customers and to utilize aggregate data for things such as product recommendations, however if you think about the average bounce rate for many sites hovering around 30-40%, that's a large percentage of your visitors that you are missing with that targeted message. The great news is there are many ways to optimize for this user segment. For example you could segment by device, channel or geo to offer the most optimal call to action.

A cool example of this comes from Burton Menswear. Burton personalized their homepage to display weather appropriate products depending on the current forecast based on the user's geographic location. The beauty of this approach is the combination of product specificity and geo-location, which allows retailers to jointly promote deals on sunglasses for fellow eTail West attendees while highlighting a sale on parkas and earmuffs for my Akamai colleagues in chilly Cambridge. For Burton, the end result was an impressive one - a 11.6% uplift in conversions across all users.

Not to leave out the brick and mortar, I would like to point to Macy's use of the recently expanded shopBeacon by Shopkick (built upon Apple's iBeacon Bluetooth Low Energy (BLE) protocol), which by spring of 2015 will allow Macy's to personalize by departments the shopping experience for customers, guiding them through the store and communicating with them on a first name basis and suggesting items they might like. This allows the retail store to personalize the customer experience in real time - bringing a web like experience to the store.

It's a big step forward for retailers both in terms of embracing personalization efforts like localized marketing and focusing on the omni-channel customer experience to increase sales and customer loyalty.

While these developments are exciting and progressive, approaches like shopBeacon and other mobile personalization developments rely not only on the ubiquity of mobile devices, but on the ability of retailers to deliver consistent, high performing web experiences to users regardless of browser, device type carrier, or network....but that's a conversation for another blog post.