Joey Greenwald
April 4, 2024

Online Retail Leaders Share Excitement About Personalization — But Admit They Aren’t There Yet

Business insight comes in many forms. One of my favorite ways, especially post-pandemic, is to exchange stories and lessons over a good old-fashioned business dinner. So, we were excited to recently dine with a small but important group of digital retail leaders in New York City. 

The goal was to share intel about the current state of customer engagement and behavior in online retail. As we at OwnID continue to hone our e-commerce tech, we wanted to explore how today’s retail leaders view their current digital capabilities. To understand what they are most excited about. And to hear the honest truth about the problems and barriers they face. 

At the highest level, we found unbridled enthusiasm about the future of online retail — particularly when it comes to using technology to deliver truly personalized shopping experiences. These kinds of personal engagements, brands firmly believe, will increase sales, enrich the customer journey, and ultimately boost their bottom line. But we also heard clearly that there’s a long way to go to get there. 

Here is a summary of five takeaways we took from our discussions with these digital leaders. 

1) The mobile web is at odds with personalization

Since the early days of mobile, website designers have struggled to create experiences that work well across mobile phones and computers. Information-rich websites designed for bigger screens simply don’t translate to the small ones. 

Mobile-first design principles have, to some degree, helped remedy this challenge – putting focus on the most important information by building for mobile devices first. 

However, personalization, a top trend in virtually every digital and marketing article you can find online, adds a new challenge to mobile. Online retailers desperately want to personalize the experience of their website visitors, offering custom offers and information alongside the basics. But the precious little real estate of a phone screen also makes this more challenging. 

Perhaps more importantly: Personalization isn’t possible if a site’s visitors are anonymous. And the digital leaders we spoke with shared the sentiment that on mobile, site visitors are more likely to be anonymous. And these visitors are also less likely to create or sign into an account. Worse, mobile visitors are more likely to bounce off of a website more quickly, putting pressure on brands to instantly engage and deliver compelling content — too slow and it may be too late.  

It’s worth noting that some brands are serving up personalized, data-rich experiences in their custom-developed mobile apps. But only the most dedicated customers download and sign into these apps.

So, while brand leaders desperately want to create these personalized experiences, they’re struggling to simply convert anonymous visitors into users (and customers) they know anything about. Especially on mobile.

2) Retailers want the online experience to be at least as personal as in-store

Brands have the potential to know more about their online customers than those who shop at their brick-and-mortar shops. After all, a customer’s purchase history, account details, browsing history and much more data could be available just as soon as the customer authenticates on a website. 

And the promise of that online data offers vast potential for retailers to personalize the shopping experience to the person. They could use AI and other tech tools to instantly extend offers that are proven to drive sales among those in shared cohorts. Except that most visitors remain anonymous. 

Retailers are only able to learn anything about those anonymous visitors after they complete a purchase. And even then, if they purchase as a “guest,” they don’t get the chance to re-engage with them post-sale. They never get added to loyalty programs, and can’t receive promotions via email campaigns. 

In reality, our dinner guests told us, today’s in-store experience is still far more personalized than online. Even though you may not know a customer who walks in the door, associates can see them browsing sections of a store, offer to help, and ask questions about their preferences. They can even usher them to the cashier's stand to complete a purchase. 

The digital leaders we spoke with crave the ability to deliver at least as good of an online experience as they do in-store. But most believe, that with the right tech, online could be even better. 

3) Personalization is hard to scale and tech is immature 

Since the dawn of the internet, marketers have faced this question: As you segment customers more deeply, how do you market to smaller groups at scale? 

In a way, personalization is anti-scale. Creating unique and tailored content for each individual customer can be resource-intensive and time-consuming, especially for large retail brands with extensive product catalogs and customer bases. There’s simply no way a small digital team can manually serve up these experiences for thousands of potential online shoppers. 

The emergence of personalization technology, powered by machine learning and AI, promises to help automate these personalization efforts. But it’s still early days. And the digital leaders we spoke to say they are still in the infancy of exploring how to use these algorithmic e-commerce platforms. To truly personalize experiences, brands require both data maturity and (human) experts to manage and optimize these platforms. 

On the path to personalization, leaders say they are only currently executing on surface-level segmentation  — offering tailored promotions and content based on basic attributes such as gender or location. 

4) Repeat customers come at different frequencies

When we think about e-commerce buyers —  and metrics like repeat purchase rate or average order frequency — we often picture the Amazon customer. We envision someone who goes to a site several times a week and orders and re-orders a wide variety of small(ish) ticket items.

But when talking about the customer journey with a variety of e-commerce leaders, it’s clear that frequency-based metrics look very different based on the type of product or service a brand is offering. 

For example, the typical customer journey for a luxury brand that sells high-end apparel or fashion accessories starkly contrasts with high-volume retailers like Amazon or Target. The luxury brand customer may only buy once or twice a year — but when they do, they spend a lot

And, importantly, when your best customers only come to your website a few times a year, these more infrequent digital engagements become even more high-stakes. There’s less margin for error — nor room for extraneous friction. Because there are, simply put, fewer opportunities to sell. 

That’s all the more reason for high-value, low-volume retailers to invest in nearly frictionless authentication tech that makes it simple to sign in and complete purchases, along with tech that allows brands to personalize and maximize those infrequent visits.

5) Brands know they should be doing more with past customers 

We all have things we know we should be doing, but we can’t quite get there. For the digital leaders we spoke with, that “thing” is investing more time and money in nurturing their past customers. They know that every dollar or hour spent with past customers will yield a better return. Yet…

Delivering completely personalized digital experiences to past customers is atop the proverbial “Maslow’s Hierarchy” for brand leaders — but today that’s more idealistic than realistic. Many currently execute more traditional marketing programs designed to bring past customers back — such as loyalty rewards, email promotions, and web retargeting — but probably not as much as they could or should. 

That’s because many leaders still feel somewhat stuck at the bottom of the pyramid. Stuck trying to simply acquire new customers and gathering enough data so they have the means to re-engage with them. 

As our Ben Jackson wrote recently, the friction of account creation is still the biggest obstacle to fulfilling the promise of the customer journey. 

“Long before we can re-engage our customers with new perks, memberships, and loyalty programs, they need to make it through our account setup processes,” Ben wrote. “And we watch, horrified, as our top-heavy funnels hemorrhage potential customers at each step in the purchase process, until only a fraction of a fraction of a fraction complete a purchase.”

So, before they can invest in and truly deliver personalization, digital leaders recognize, they need richer customer data — and more customers — in their database. And to get there, they need to make it easier for customers to sign up for an account — and easier to sign back in when they return. Only then will it make sense to climb up the hierarchy. 

Joey Greenwald is a seasoned GTM professional with over 15 years of experience in B2B SaaS and enterprise technology. He is now the VP of Marketing at OwnID, helping enterprise eCommerce companies and Fortune 500s deploy next generation Customer Identity and Digital Commerce technology solutions.