eCommerce Personalization: Moving Beyond Demographic

eCommerce Personalization: Moving Beyond Demographic

eCommerce personalization has totally transformed the way consumers shop online.

Online shoppers have gone from being impressed with one-page checkouts to feeling frustrated when website content is not personalized to their wants and needs.

The concept of traditional content personalization is simple:

A brand collects customer data (like age, location, and past product purchases), and uses it to segment its audience into groups, clustering similar customers together in the process. Each segment is called a persona, which the brand can humanize and then create tailored content for. The brand’s digital experience platform then delivers tailored messaging and products exclusively to each persona — personalizing the customer journey for each persona-member in the process. Kind of.

While this demographic-based approach to personalization is useful, the world of eCommerce personalization has evolved — and it’s time your brand evolved along with it.

In this article, we examine why demographic personalization is on its way out, and why motivation-based personalization is the way forward.

 

How Well Do You Know Your Customers?

This should be a relatively easy question to answer right? After all, they’re the ones buying your products to keep your digital roof (or if you’re really old school, your physical roof) over your head.

And yet, most brands have little to no knowledge of their customers. Sure, you might have some data on their ages, locations, and product preferences, but more often than not, that data says very little about who your customers actually are, and what they want.

To truly succeed in the age of personalization, you not only need to know who your customers are, you need to break away from hypothetical personas based on flimsy data. Instead, you need to understand why they’re buying from you, and what their reasons for buying the things they buy. To do that, you need to tap into the emotional needs behind your customer's decisions — and demographical data can’t help you there.

"To win the #personalization game, you need to break away from the hypothetical personas"
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Demographic-Based Personalization

Demographic-based marketing was the eCommerce world’s logical first step into the world of personalization. But now that most brands are a few paces in, it’s time to analyze exactly what demographic-based personalization gives you — and what it doesn’t.

Let’s start with the basics. Traditionally, brands would build a range of personas to segment their audience based on demographic data such as:

  • Age
  • Gender
  • Income
  • Location

So for example, one persona may look something like this:

  • Name: Mandy
  • Age: 21-29
  • Income: $25,000-$45,000
  • Location: United States
     

And sure, it makes a lot of sense to send different emails and show different products to middle-aged women as opposed to millennial men, because those two persona types will naturally have innate consumer differences and preferences.

However, when it comes to eCommerce personalization in particular, relying on demographical data alone to personalize content is like seeing your customers through frosted glass — you get the picture, but the details are missing.

eCommerce Personalization: Relying only on demographical data

It’s similar to saying every US citizen loves Baseball (well, Baseball is the national sport, right?), and so you should, therefore, present all US citizens with plenty of baseball-related merchandise. When you think of it that way, there’s nothing very personal about demographic-based personalization at all.

 

Better eCommerce Personalization: Psychographic Profiling

For a deeper insight into who customers are, and what they want, eCommerce brands need to start supplementing their personalization strategies with data based on consumer motivations, rather than just their demographics.

After all, the reason why people are visiting your site is far more important than their gender or location. Perhaps that’s why Gartner predicts that by 2020, brands who are able to offer intent-based personalization will increase their profits by up to 15%, compared to brands who don’t.

Furthermore, demographic-based personas lead you down a never-ending path where marketers have to keep creating new personas every time a new type of consumer gets wind of your brand. And of course, with every new persona, you need to create a new set of “personalized” content for that persona, and that persona alone.

Psychographic profiling on the other hand, which produces motivation-based personas, intelligently limit your number of personas.

 

Less is More

With motivation-based personalization, you need fewer personas and thus fewer versions of your content. Yet, the end result is a more personalized experience.

Here’s how that works:

Multiple demographic-based personas often share similar motivations. Thus, if you switch your focus from demographics to motivations, you’ll be able to cover larger segments of your audience, but with fewer personas — and better still, your content will be more aligned with your consumer’s needs.

eCommerce Personalization: Psychographic Profiling

Let’s take a look at another example. With traditional personas, a book retailer may have two separate personas called Greg, a freelance photographer, and John, a bus driver:

Persona: Greg

  • Greg, freelance photographer
  • Age 31-45
  • Total household income $50-70k
  • Lives in a city
  • Enjoys watching Netflix dramas
  • Shops for books on Amazon

Persona: John

  • John, bus driver
  • Age 25-31
  • Total household income $50-70k
  • Lives in the suburbs
  • Gets his news via Twitter
  • Prefers to shop online and download audiobooks

As you can see, those two personas are only segmented based on age and location. But once you switch to motivation-based personas, you can suddenly combine both Greg and John into one persona that caters for them both:

Persona: Budget-Convenience-Techie

  • Budget-conscious
  • Make purchases based on convenience
  • Tech-savvy

Sure, demographics come into play (so you might want to create sub-personas to narrow down locations and ages), but the key here is that you’re addressing their motivations first. The end result is a motivation-driven persona that speaks to the consumer’s true wants and needs.

Suddenly, you don’t just know who your target market is in a vacuum. You know who they are in context.

 

Digging Deeper: 3 Ways to Engage In Behavioral Targeting

To go even deeper, you can glean data from your digital experience platform to give your motivation-based personas yet more context by analyzing behavior to deduct each consumer’s intent as they move through your website. This process is called behavioral targeting.

Blending behavioral targeting and psychographic profiling is the cutting edge of eCommerce personalization. Below we look at a few different ways we can break down customer consumer behavior, all of which can be paired with motivation-based personas to deliver uber-personalized customer experiences:

Behavioral Intent

Behavioral intent deals with a customer’s past actions, like their browsing history and purchase history on your website. Recommendations are then made based upon what your visitors have done in the past. For example, here’s what I got when I’ve been browsing for some short-sleeved shirts on ASOS (yes, I’ve been on a shopping spree).

eCommerce personalization: Behavioral intent by ASOS

 

Stated Intent

Stated intent deals with real-time visits to your site, where a customer’s actions determine the products, and messages on display. Here’s an example from the king of personalization, Netflix.

Nextflix recommended a related TV series - sneakily, it's their original TV series - based on the movie that I just finished. Looks like they REALLY want me to binge watch.

eCommerce personalization: Stated intent - Netflix

 

Search Intent

Search intent, as the name implies, takes keywords from a visitor’s search history to determine what they’re looking for. Here’s how noon, a UAE-based eCommerce site, does it.

eCommerce personalization: Search Intent - Netflix

 

So, Are Demographics Dead?

Demographic-based personas aren’t dead, they’re just primitive.

If you’re brand new to eCommerce personalization, demographic-based personalization should be your first step. However, to unlock the true power of personalization we need to combine consumer attributes with their motivations, as well as their intent. Only then can you get truly personal.

So while showing your female customers high-heels and your male customers work boots might lead to a slight increase in conversions, you’ll need to build far more context around your customers if you ever hope to deliver the type of personalized experiences that can attract the 77 percent of consumers who have chosen, recommended, or paid more for a brand that provides a personalized service or experience.

How else do you think eCommerce personalization is changing? Share your thoughts in the comments below.

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