In the world of e-commerce, businesses have few options to achieve true differentiation. Some brands have established themselves through reputation, it’s true. But how many of them did so exclusively after the dawn of the digital age? Think luxury, Rolex, Louis Vuitton, Dom Perignon. They had already set themselves apart well before the internet existed.
For the most part, the online scene gives relative newcomers two ways to differentiate: price or value. Winning the price wars is a difficult proposition. When you’re facing giants like Amazon, with their ability to leverage economies of scale, the only real option is to go extremely niche.
Niche also helps a business deliver value because it focuses on serving a narrowed-down slice of the market. But the nature of the internet fosters imitators. Whatever innovation you have up your sleeve, you can never truly corner an audience segment for long.
Yet what if you could partner with the consumers themselves to create a different and valuable experience? This personalization method promises to deliver success, both now and in the long term, to those who can harness it successfully.
Getting consumers more involved
Even the least savvy businesses engage in personalization of some sort. When you have a VIP client, you might not literally roll out a red carpet, but you do hire limousine transport to pick them up at the airport. You have a junior partner show them around company facilities while employees are notified to perk up and be on their best behavior.
We do these things and make exceptions for VIPs. They matter. The challenge with personalization for consumers is to make them feel as though they, too, matter.
Nike often leads the pack in strategy, and this area is no exception. The company has long offered a service called NikeID, which lets shoppers customize a wide variety of shoes and other apparel. Through the Nike website, they can select individual parts of a shoe and explore how different colors and materials would look. The whole experience is engaging and interactive, making consumers feel uniquely invested in the product.
Adidas has implemented augmented reality features in its iOS app as an alternative take on personalization, allowing shoppers to try on a selected range of shoes virtually. The user points the smartphone camera at their feet, and the virtual models will display as though you were wearing them.
Navigating the obstacles
Whether it involves creating actual products or simply tailoring the experience through smart marketing, personalization can be a win-win proposition. The consumer is more engaged and feels that the company has offered them unique value.
But there are many challenges involved for businesses to make it work. It takes more effort and resources to turn product design into a modular process. It’s that modularity that allows consumers to participate in a specific part of the design. You still need in-house designers, plus a dedicated team to craft that area of personalized interactions.
Personalization also requires the effective and deliberate use of data analytics. In recent years, this has become something of a sensitive issue. Consumers are willing to entrust brands with their data if it leads to better experiences, but they are also increasingly aware of instances where trust is broken.
Finally, you have to strike the right balance of options versus simplicity. Giving consumers too many choices can effectively overwhelm them with complexity. Instead of enjoying the personalization process, it becomes a burden.
An evolving process
Many businesses have already taken those first steps toward crafting personalized experiences. For instance, website cookies let you remember consumer preferences, and they can also keep track of interest in related products.
Care must be taken to refrain from overly aggressive data mining. But even without drawing from third-party sources, a company can use data from its own website or app to release small-scale, targeted changes.
Using A/B testing, for instance, lets you roll out a version of your website that’s different in an isolated way. Tracking user behavior across one metric tells you which version resonates better. In a series of iterations, you can paint a better picture of your audience and start giving them increasingly more personal options.
Unlike other forms of differentiation in e-commerce, the path of personalization is much closer to being an actual collaboration with consumers. You can’t really expect to get it right the first time. It’s something that has to evolve over the years. And the sooner you get started on the process, the more you’ll be able to set yourself apart gradually.