CleverTap Report: Personalization Strategies in eCommerce

 CleverTap,  the all-in-one engagement platform, today released its industry data-science report ‘Navigating Personalization: A Balancing Act for eCommerce’ showcasing the importance of tailored personalization strategies across various eCommerce applications. The findings are based on a detailed analysis of 500,000 messages across 43 global eCommerce businesses.

Personalization eCommerce

CleverTap found that eCommerce businesses leveraging use-case based personalization strategies saw 6x more purchases than the industry average, and 7x more purchases than businesses relying on blanket, one-size-fits all personalization strategies. This, alongside the various other insights within the report will help eCommerce marketers drive organic conversions and higher app activity.

CleverTap assessed personalization via three channels – email, push notifications, and in-app messages. The report establishes the 4 levels of personalization (L1 - L4) and advocates for an optimal blend across different levels to maximize results. These four levels of personalization from least to most personalized are:

• L1: Tailors recommendations and promotions based on demographic data, ensuring relevance for distinct customer segments.
• L2: Delves into behavior-based segmentation, crafting messages from past customer actions.
• L3: Predicts preferences and intent, tailoring content and offers accordingly.
• L4: Leverages real-time data, triggering immediate, highly relevant messages based on current behaviors and events

The report discovered that businesses with higher levels of personalization tend to have better business outcomes. It categorized these businesses into three groups—

Striving: Businesses that use limited personalization with higher send frequencies.

Steady: Businesses that use a high degree of personalization but have lower send frequencies.

Stellar: Businesses that use a high degree of personalization and optimal send frequencies.

Striving businesses, on average, sent 22 messages to users every week with minimal (L1) personalization, leading to them underperforming the industry benchmark by 77%.

Steady businesses overlooked L1 personalization; underestimating the power of simple demographic personalization which limited engagement at the generic level. But by prioritizing more advanced levels of personalization (L2 and L4) they outperformed industry benchmarks by 74%.

Stellar businesses adopted the optimum blend of all four personalization levels, with an emphasis on L4, outperforming the industry benchmark by 500%. Compared to striving businesses, they achieved nearly 7x more purchases.

Stellar businesses used L1 personalization to successfully promote large-scale events that impacted the customer base at large. Simultaneously, through more granular levels of personalization, they were able to guide customers towards subsequent conversion events. These stellar businesses prioritize behavior-based and real-time messaging over activity-based communication. This approach minimizes intrusive messages following specific customer activities and, instead, focuses on nudging customers only when behaviors of intent are shown.

“When it comes to personalization, often businesses can be myopic in their decision-making – thinking personalization of any shape or form will help achieve the lofty goals they set,” said Jacob Joseph, VP – Data Science, CleverTap. “While it's true that some personalization is better than none, over-relying on any one type of personalization will deliver subpar results compared to businesses with a more holistic approach. With a strategic mix of personalization techniques eCommerce businesses can overperform industry benchmarks by 6x; elevating their brands from striving or steady to stellar status.”