Lessons From Five E-commerce Companies Acing Personalization


Ecommerce retailers, today, know how important it is to capture customer attention using personalized marketing.

A RedPoint Global survey conducted by The Harris Poll notes that 63% of customers have come to expect personalization as a standard offering.

Market leaders keep a close eye on every action shoppers take, for instance the recommendation engines powering Netflix and Spotify learn more about your tastes and preferences every time you pause a show or abandon a song midway.

A Forbes article reports that Netflix runs 250 A/B tests per year, and harvests personalization information from 300 million profiles to drive its watchlist curation.

The world’s biggest brands are simply better at the personalization game.

They stay ahead of the curve by actioning the sophisticated intelligence they have on consumers, and act on data they have collected from billions of transactions across different platforms.

As a product marketer at a large or small Ecommerce firm, you too, can learn how to build and rollout campaigns that are hyper-relevant, timely, and compelling.

In this article, we will quickly take you through some examples of companies that are acing Ecommerce personalization.

“When best customers produce 18 times the revenue of the average customer a retailer must prioritize giving the shopper what she wants.” RJ Metrics

  1. Stitch Fix

Forbes describes Stitch Fix not just as a fashion company but also as a data powerhouse. The company has accomplished the incredible feat of consistently personalizing the shopping experience for millions of its customers.

Stitch Fix goes the extra mile to customize product recommendations.

First, customers are prompted to answer a series of questions that helps the brand better understand their sense of style.

Next, the brand collects a rich array of data from a variety of sources, including pictures, social media profiles, feedback surveys and more.

All this information is fed to algorithms that help pinpoint exactly what every individual is looking for, and lastly, a human adds the finishing touch – with fashion stylists approving product recommendations before actual products are shipped to customers.

Individual boxes containing five different articles of clothing or accessories, to suit their size, budget, tastes and lifestyle, are sent to customer homes. And what makes the experience extraordinary is that shoppers have the freedom to try on their purchases, and pay only for the items they keep.

They can send back products they do not like, at no additional cost. Stitch Fix gains traction by asking for feedback at every step.

Customers are only too happy to share data on what they liked about the products they decided to pay for, and offer feedback on items they wish to return.

Feedback mechanisms are integrated seamlessly into the customer journey, and shoppers don’t mind collaborating with Stitch Fix, because they see the value in sharing granular data with a company who is getting to know them better knowing that they can expect an incrementally smarter shopping experience every time they log on.

This approach pays off. Stitch Fix has built an incredibly loyal customer base and the company has an astonishing six-month retention rate of around 30%, significantly higher than any other player in the space.

2. Yelp

Yelp turned 15 last year and has over 200 million reviews from users, till date. The app displays restaurant listings, user reviews and information about local businesses, to users in a reassuringly familiar manner.

But last year, Yelp began to focus on personalising its recommendations in never before ways. The Yelp app now lets users specify dozens of things about their likes and dislikes, food preferences, and lifestyle, before it matches them with a business.

For instance, if you love Japanese cuisine, are a vegan, and are looking for a pet-friendly dining room in Nolita, Yelp is happy to recommend a restaurant you will love!

Yelp is finding new ways to win at personalization to meet customer needs better. Their co-founder and CEO, Jeremy Stoppelman told Fast Company, “One of the things that we’ve heard time and time again is, ‘Hey, I’m a vegetarian’ or ‘Hey, I’m a parent’ or ‘Hey, I have a dog…All these personal aspects weren’t necessarily being captured and then taken into account in search results.”

Yelp is now building out new features and adding functionality to address these need gaps to ensure that it stays relevant even during the upcoming decade.

Their Chief Product Officer, Vivek Patel says, “Throughout the years, if you were doing the same search in the same spot, you would get the same results, but everyone’s different. Everyone has different tastes, and I think we can do a lot to help surface the things that resonate with people, at that moment in that context.”

In its new avatar, Yelp asks customers to fill out a short survey about themselves, so their data collection process is transparent, and uses these insights to display ‘Picks for You.’ The app impresses users with its ability to combine knowledge about their preferences with rapidly-changing information.

For example, Yelp now knows that you like Sushi and suggest a restaurant close to you where the wait-time is under 20 minutes, making its recommendations invaluable, highly-contextual and very actionable.

These features are helping Yelp become more popular with 2.4 million users a month making restaurant reservations or wait list requests, and 2.2 million requests coming in for allied services, like plumbing, home repair, and accounting, across 300+ categories.

3. Starbucks

Starbucks has been working towards reducing its mass-market spending by focusing on building relationships with customers, one on one. The brand has been a first-mover in the loyalty program space, by launching an app-based customer rewards program way back in 2011.

Customers can also customize their drink and order products via the app. In 2014, Starbucks introduced gamification as a hook to engage with customers in-app, and two years later, it began personalizing the games it pushed onto user’s screens.

These interactive games became a fun way to reward loyalists and motivate them to try new products and visit stores more often.

The introduction of the rewards system saw Starbucks’ revenue soaring to $2.56 billion, while the app has generated around 6 million sales per month, accounting for about 22% of all U.S. sales. Starbucks builds on the app-centric data they collect to drive real-time personalization.

Their AI based engine serves up individualized offers for customers, based on their activity, past purchases, location and preferences.

Starbucks fans are willing to share a wealth of personal data about themselves because they know delicious rewards are in store, and analysing interactions on the app allows the brand to create more effective marketing campaigns. So it is a win-win for both the customer and the brand.

The Starbucks app interface is personalized for each individual user, and the brand is able to send more than 400,000 variants of hyper-personalized messages, highlighting deals and updates, almost guaranteed to meet the needs and habits of their most-engaged followers.

This approach has proven to be very profitable. As per a study, personalized games have helped to triple Starbucks’s marketing campaign results, double email redemptions, and generate a threefold increase in the incremental spending of customers who redeem offers.

4. Forever 21

This California-based fashion giant has continued to decrease its brick and mortar footprint and is turning to Ecommerce in a bigger way after filing for bankruptcy in 2019.

The fast fashion brand has now launched an international site to target consumers in Asia, the Asia-Pacific region, Canada and Latin America. Not surprisingly, personalization is a big priority for them.

“Changing the homepage based on behavior is the most popular action for 36% of sites”Bloomreach

Returning personalized search results, offers, and product recommendations is one of the ways Forever 21 is capturing customer attention. They pay attention, for instance, you can see how the search results get increasingly relevant with every click on their homepage.

In the example below, when searching for sweaters, at first, the results show women’s clothing but the first time a shopper browses through men’s listings, the search results begin displaying more men’s clothing options.

Forever 21 is actively listening to what every customer is telling them and tweaking the experience so it is more engaging for the customer every single time. This dynamic personalization incentivises customers to browse for longer and will typically increase the likelihood of a purchase.

5. Amazon

No article on personalization in an Ecommerce context can afford to ignore Amazon. When it comes to behavioral targeting, predictive modeling and contextually-relevant marketing, Amazon aces the game because of the sheer amount of data at their disposal.

Amazon has access to data points like your full name, search query, average time spent on search, past purchase history, brand affinity, category browsing habits, time of past purchases, average spend amount and more, and it crunches all this information to truly understand customer preferences, aid product discovery and market continually better. Their ‘frequently bought together’ and ‘customers who bought this item also bought’ prompts work incredibly well, with over 44% of customers buying basis these recommendations.

Amazon is always one step ahead of the customer, anticipating what the products they will need and want to buy.

Every time you visit their marketplace, you are shown a personalized homepage based on unique factors like your historical shopping habits, wishlist, and real-time shopping cart data, to aid new product discovery.

No surprise then that, compared to other E-Commerce brands, conversions from Amazon’s on-site recommendations are 60% higher.