eCommerce June, 2024

What is eCommerce personalisation and why is it important?

eCommerce personalization is the practice of using customer data to tailor the shopping experience to each person.

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Imagine a new user buying furniture online. A traditional website might show them a static image of a sofa. But with the help of a configurator, the customer can choose the size, color, fabric, and even the style of the sofa legs, creating a truly personalized product. This level of customization not only leads to happy customers but also provides valuable data about their preferences. What is e-commerce personalization?

E-commerce personalization is the practice of using customer data to tailor the shopping experience to each person. This can include everything from showing product recommendations based on past purchases to creating targeted marketing campaigns. By personalizing the experience, businesses can increase customer engagement, conversion rates, and overall satisfaction.

One of the most important roles in personalizing the experience is played by e-commerce product configurators. These interactive tools allow buyers to customize products to their exact specifications.

Understanding eCommerce personalisation

E-commerce personalization goes beyond simply addressing a customer by name. It’s about creating a dynamic shopping experience that caters to their unique needs and interests. This is achieved by leveraging various data points, such as:

  • Browsing behavior: What products are customers looking at? How long do they spend on specific pages?
  • Purchase history: What have customers bought in the past?
  • Demographics: Age, location, gender, etc. (if provided with consent)
  • Interests: Inferred from browsing behavior, social media activity (if integrated), and past purchases.

By analyzing this data, businesses can then personalize elements of the shopping experience, including:

  • product recommendations;
  • search results;
  • homepage and category layouts;
  • marketing messages.

 

In today’s crowded online marketplace, personalization is no longer a fad; it’s a critical differentiator. Studies by McKinsey & Company show that personalization can increase website conversion rates by up to 500%. Moreover, Monetate reports that companies that personalize their marketing messages see an average increase in sales of up to 20%. That’s why:

  • Personalized experiences feel more relevant and engaging, leading to customers spending more time browsing and interacting with your website.
  • When customers see products they’re genuinely interested in, they’re more likely to make a purchase. Studies by McKinsey & Company show that personalization can lead to a 5-8% increase in sales conversions.
  • Feeling understood and valued fosters customer loyalty and satisfaction. A Statista report reveals that 73% of US online shoppers would be willing to pay more for a personalized experience.
  • Personalization helps keep customers engaged and coming back for more. A Forbes article highlights a study by Epsilon indicating that personalized experiences can reduce customer churn by up to 10%.

The role of product configurators in customers personalisation

Product configurators directly contribute to the personalization of e-commerce by:

  • Expanding customer choice options. Customers can personalize various product characteristics such as size, color, material, engraving, etc. This allows them to create a product that truly reflects their individual style and preferences.
  • Providing valuable data. By interacting with the configurator, customers generate valuable data about their choices and preferences. This data can be used to improve product offerings, tailor future recommendations, and personalise marketing campaigns.
  • Increase customer trust. Real-time visualization of a personalized product builds trust in the purchase decision. Customers can see exactly what their final product will look like before they make a purchase.

E-commerce businesses can leverage different types of product configurators depending on their needs and product offerings:

3D Product Configurators

3D Product Configurators create a realistic, interactive 3D product model that allows you to create customised products with a full immersive experience. They are ideal for complex products, such as furniture or bicycles, where spatial visualization is crucial. However, they require significant investment in development and support.

Example of customizable components (3D Product Configurator)

2D Product Configurators

2D Product Configurators use static images or videos to demonstrate product customization options. They are a more cost-effective solution and are suitable for simpler products with fewer customization options.

Example of customizable components (2D Product Configurator)

Modular Product Configurators

This approach breaks down the product into separate modules that can be mixed and matched to create a customized solution. Modular Product Configurators are often used for IT products or office furniture where customers need to create a complete system from different components.

Example of customizable components (Modular Product Configurator)

Choosing the right type of configuration depends on the complexity of the product, budgetary constraints, and the level of customization desired.

What are 3D Product Configurators?

3D Product Configurators are unrivalled in creating the most immersive and engaging personalization experience. These state-of-the-art tools use 3D modelling technology to give customers a photorealistic view of their customised product. Imagine designing your dream kitchen and being able to rotate the 3D model to see how different cabinet colours and countertop materials look together. This level of detail helps increase confidence in the purchase decision and significantly reduces the risk of buyer’s remorse.

3D configurators also offer clear business benefits. They can simplify the product design and manufacturing process by allowing customers to configure products within defined parameters. This eliminates the need for customised orders and reduces production costs.

3D Configurator Demo
Mimeeq 3D Product Configurator

In addition, 3D configurators can provide valuable data on customer preferences for materials, colour combinations, and popular features. This data can be used to further develop products and marketing strategies.

What are 2D Product Configurators?

While 3D configurators offer the most advanced approach, 2D Product Configurators remain a valuable tool for eCommerce personalization.  These user-friendly configurators use high-quality images and visuals to present product customization options. Customers can choose different characteristics such as size, colour, and material and see how the changes are reflected in a 2D image.

2D configurators are a cost-effective and versatile solution for a wide range of products, especially those that don’t require highly detailed 3D visualisation. They offer a simplified personalization process that engages customers and allows them to experiment with different options before making a purchase.

Mimeeq 2D Product Configurator

What are Modular Configurators?

For products with a high degree of modularity, such as furniture systems, shelving or computers, Modular Product Configurators offer a powerful opportunity for personalization. These configurators work like digital building blocks. Customers can select individual components such as frames, shelves, drawers or hardware and assemble their ideal product configuration.

Modular configurators perfectly meet a wide range of customer needs and preferences. They enable customers to create truly customised products that perfectly match their space and functionality requirements. This level of detailed control fosters a deep sense of ownership and satisfaction throughout the shopping journey.

Modular Configurator Demo
Mimeeq Modular Product Configurator

Challenges and solutions in e-Commerce personalization

While e-commerce personalization offers many benefits, there are also challenges that businesses need to address.

Challenge 1: data warehouses & segmentation

E-commerce businesses often collect customer data from a variety of sources, such as website behaviour, purchase history, and email interactions. However, this data may be stored in separate systems, creating data silos. This fragmented data makes it difficult to get a holistic view of customer behaviour and preferences, which hinders effective personalization.

Solution: Implement a customer data platform (CDP) to consolidate data from all sources into a single, unified profile for each customer.

Challenge 2: balancing personalization & privacy

Consumers value personalised experiences, but at the same time are increasingly concerned about data privacy. Intrusive or irrelevant personalization tactics can backfire, causing customers to feel alienated or distrustful.

Solution: Be transparent about how you collect and use data.  Allow customers to control their data and opt-in or opt-out of personalization. Focus on personalization that provides clear value, such as relevant product recommendations or targeted promotions.

Challenge 3: overcoming technical obstacles

Implementing effective personalization requires a strong technology infrastructure. However, companies may lack the technical expertise or resources to manage complex personalization tools and data analytics platforms.

Solution: Successfully integrating personalization requires a commitment of resources. This may involve internal training, potential new hires with specialised skills or collaboration with a software provider. While the upfront investment may seem significant, the long-term benefits outweigh the cost. Consider working with a personalization platform provider that offers user-friendly tools and ongoing support.

Conclusion

By using customer data and applying strategic personalization techniques, companies can create a more attractive and enjoyable shopping experience for their customers. This leads to increased sales, increased customer loyalty, and a stronger brand reputation.

Product configurators play a vital role in enhancing personalization by empowering customers to take an active role in creating products that meet their unique needs and desires. Whether you choose a 3D configurator for a fully immersive experience, a 2D configurator for a user-friendly approach, or a modular configurator for highly customizable products, these tools can greatly enhance your personalization strategy.

However, implementing personalization in eCommerce does come with some challenges. By being aware of potential obstacles, such as lack of data access, privacy, and scalability issues, companies can develop solutions that will ensure a successful and sustainable personalization strategy.