Leveling up ecommerce search with AI-enabled personalization

A lot of the “luxury” of luxury brands comes from the personalized attention they give every single shopper. When a store really knows you, you feel like the VIP you are.

With the right technology, ecommerce sites can treat everyone like a VIP. AI-enabled personalization is helping ecommerce retailers learn more about customer preferences, behaviors and needs to enhance the shopping experience. Powerful algorithms trained on shopping behaviour and trends anticipate what shoppers are looking for and make helpful suggestions when they don’t know what they want — or don’t know it exists.

The result is a richly curated experience that merges seamlessly into your customer’s day. That ease and sense of belonging goes a long way when it comes to deciding what and how much to put into a shopping cart.

That can mean a serious improvement on critical KPIs. For instance, after personalizing the shopping experience with AI-powered tools, Decathlon Singapore increased its click-through rate by 36% and grew conversions by 50%.

If you’re wondering how they did it, our ebook can help. Leveling up search with AI-enabled personalization covers the basics about AI-powered personalization tools for ecommerce so you can decide whether and when to get on board. We pulled out a few of the key points to get you started.

What is ecommerce personalization?

Ecommerce personalization is a set of technology, design, and merchandising optimizations that tailor the search and discovery experience to suit individual shoppers’ needs and preferences. Things you can do with AI-enabled personalization:

• Reorder search results so the brand the customer bought last time appears at the top.
• Add a “recently viewed” section to the search page to help discovery
• Address the customer by their first name on product pages or at checkout
• Provide a personalized carousel of new or seasonal product promotions based on previous searches or purchases

How does AI-enabled personalization work?

The actions customers carry out across digital and physical touch points — such as clicks, search words, and purchases — are gathered and analysed. Machine learning algorithms weigh and measure these data events to create user profiles.

Those profiles are then optimized to drive engagement and business results. The search term “chips” might mean salty movie night snacks to one shopper and sweet baking essentials for another. AI-powered search tools leverage user profiles to enable dynamic adjustments to the shopping experience, such as:

• Anticipating what site visitors are looking for from the very first keystroke
• Personalized facet reordering that reflects individual shoppers’ needs and tastes
• Personalized product recommendations

Sophisticated user profiles deliver the right results to the right person at the right time, making the shopping journey feel effortless and serendipitous – not like you’re scrolling someone else’s shopping list.

What do you need to get started with AI-enabled personalization?

To work well, AI-enabled personalization needs data. Organizations can collect data explicitly, through polls, questionnaires, and quizzes. They can also ask customers to consent to cookies, which monitor digital interactions to enhance site performance. In either case, ecommerce businesses need to be transparent about what data they’re collecting and how they’re using it.

But data is only part of the puzzle. While AI-enabled personalization relies on state-of-the-art data science, the technology needs to be applied well to work well. For that, you need savvy marketing and business teams that understand data-driven techniques and can fine-tune the machine learning model over time as:

• Datasets grow larger
• Shopping behaviors change
• Business priorities shift
• Your tech stack evolves

Any AI-enabled personalization strategy should consider data sources, infrastructure, and technical capabilities. When personalization is built on top of strong foundations, ecommerce businesses boost Customer Lifetime Value (CLV) and deliver ROI from deeper and repeated customer engagements, higher order values, and conversions.

The key to satisfying customers and outpacing performance on critical KPIs is AI in the merchandising toolbox. Staples Canada used past shopping data to make personalized product recommendations and raised conversion rates by double digits. Huckberry used AI-enabled personalization to match user preferences to real-time product availabilities, resulting in a 9.4% revenue increase.

Is AI-enabled personalization right for you?

If you’re looking for similar sales uplift, AI-enabled personalization has proven its worth. However, not every ecommerce retailer is ready to deploy and not every target audience expects it or desires it. A look at the market and at competitor activity is the right place to start.

Data is another key component. Businesses should ask themselves whether they have, or can collect, sufficient data to support a tailored strategy. The question often dovetails with technical capabilities. It’s important to ensure you have team members who can optimize the technical demands to meet your intended sales objectives.

One more thing to consider is: Should you build from scratch? If you’re not sure, there are ways to smart small – with personalized search rankings, for instance. Another ideal way to get your toes wet and explore the possibilities of personalization is by partnering with a SaaS platform like Algolia. Search and personalization capabilities come together in an all-in-one solution that your teams can deploy via easy-to-use dashboards.

Without a doubt, personalization is paying off

In today’s digital marketplace, customers are seeking personalized experiences and rewarding retailers that provide them.

Research by McKinsey shows that customers spend 40% more when results are personalized. World-leading digital providers like Amazon and Netflix are increasingly built on personalization — and raising the stakes for every other site. Customers raised on these search experiences expect the retailers they visit to know their tastes and anticipate their needs.

Some might not be ready to implement AI-enabled personalization, but every retailer should understand the advantages, the challenges, and how to get started. Our latest eBook is that informational starter pack.

Use it to figure out if AI-enabled personalization is right for your store. Get your copy here and start transforming the customer experience with brilliantly curated search.