Many sites have been doing some form of personalization for years. This often includes relatively “wide” customer segments like new vs repeat visitors, and relatively static discount or product promotions. Now imagine doing promotions that are customized with every page view, to the specifics of each individual visitor. That’s dynamic personalization. It’s the next killer app in ecommerce.
In a blog post a few weeks back, I wrote about dynamic personalization as one of the top strategies for next-generation ecommerce. Dynamic personalization is a hot topic at Ai, and our clients are leveraging it with great results.
Many sites have been doing some form of personalization for years. This often includes relatively “wide” customer segments like new vs repeat visitors, and relatively static discount or product promotions. Now imagine doing promotions that are customized with every page view, to the specifics of each individual visitor. That’s dynamic personalization.
What It Is
Have you ever been on Amazon and seen “customers who bought X also bought Y” after you added an item to your shopping cart?
That’s dynamic personalization. Specific product (or content) recommendations based on your unique behaviors. These behaviors include what you have browsed and searched for, the products you’ve viewed, your ratings and reviews (if any), and your purchase history.
How it Works
All these behaviors are compared in real-time with the behaviors of other shoppers. The result is a match between things you’ve implicitly expressed an interest in, and the interests others have expressed. This type of dynamic personalization uses collaborative filtering, a fancy way of saying that it uses the wisdom of the crowd, and represents the most common method by which dynamic personalization works.
The D in Dynamic
As customers continue to visit a web site, browse and search, view products, and purchase, this data is fed into the personalization database. As the site owner adds products, content, and promotion, this information is fed in as well. In this way, the dynamic personalization system continues to evolve as it learns more about what is popular and relevant right now.
If a hot new toy is released, this product will come to the fore in recommendations as a result of customer interest. As it fades in popularity, it will be replaced by something more popular.
This adaptive learning and re-adjustment happens thousands of times per day without any explicit setup or maintenance. Additionally, the type of recommendation presented can be dynamically customized to the type of product displayed. Quantity discounts might be appropriate for cleaning supplies, but not for dvd players. Feature-based upsells and accessory cross-sells might work for a TV, but not for a book.
Why It Matters
A very small percentage of what you have available on your site is relevant to any one customer at any one time. Getting users to view what is relevant to them–making them aware that you have what they need, that they are in the right place and (by the way) there are other options they may not have thought of that are also relevant to them–is a sure way to greater sales and customer retention. Traditional methods of updating and optimizing your site through analytics and testing are great, but rely to a certain extent on guesswork and can be too slow to react to a trend.
Dynamic personalization relies on what your customers are actually telling you about what they prefer. If you don’t have the time to update your site thousands of times per day and provide live customer service chat to every customer, you should probably look into it.