Personalization tools and techniques are
considered significant building blocks for an ecommerce marketing strategy. Assuming
that a well-developed personalization strategy has been vetted, we can begin exploring
the ways to collect and analyze data most effectively to achieve our goals. The
good news for ecommerce retailers is that there are many options along the
price spectrum to consider, from revenue-based options to user-generated
recommendations/reviews to more complex home-grown customized applications.

As with most technology solutions, personalization
tools depend upon the data that must be collected from customers to provide a
meaningful analysis. This data can be gleaned from user activity online such as
clickstream behavior, or from user profiles, or by asking the user to answer
several questions. Whichever process is followed, the software will then
analyze this data via an algorithm that will then provide a unique experience
to the customer(s). For example, a common approach is to provide cross-sell
and/or upsell products based on adjacency or relevancy to a past or current
purchase. However, most personalization providers make a distinction on how
they display these results to the user (e.g. side-by-side, modal layer, etc.). Of
course, the intent is to drive revenues by converting sales based on
personalized results.

In order to increase online conversions, personalization
solutions generally fall into five categories:

1.
Versioning – displays different versions of
pages based on segmented customers

2.
Cross-selling – displays recommendations on
a page(s)

3.
Filtering – displays specific information
based on customer’s directive

4.
Custom – displays options specifically
aligned with an ecommerce provider’s differentiated offering

5.
User-generated – displays such as “top
rated” or “most recommended” products based on community feedback and actions

Although there are a variety of personalization
vendors, many of these are smaller VC-backed providers that are being
consolidated (e.g. CleverSet recently acquired by ATG). Therefore, the
alignment between strategic and technical capabilities should consist of a
roadmap for incorporating prioritized personalization features to meet the
overall ecommerce marketing goals.