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Personalized Web Experiences – How Far Along Are We?

This post is a long overdue follow-up to a blog post I wrote back in June, 2010. In that post, I complained, kvetched even, that this false notion that what we do on the internet should be more private than what we do in the outside world is actually getting in the way of  more personalized web experiences. I still believe this to be true, but at the same time, I am seeing more and more big retailers going through significant efforts to personalized the web experience, mainly as it pertains to personalized shopping experiences. So it appears that these privacy sensitivities are starting to give way to corporate Amercia’s desire to truly know their customers.

Half of the top 500 US retailers said they were using personalization on their e-commerce sites in 2011, up almost 18% from 2010. By and large, this is thanks to ‘Big Data’. Major retailers like Wal-Mart, NetFlix and eBay are harnessing Big Data in ways to provide real-time personalized online shopping experiences like we’ve never seen before. eMarketer’s principal analyst Jeffrey Grau has been studying the online personalization practices of the top 500 US retailers and has summarized his findings in a report “How Retailers Are Leveraging ‘Big Data’ to Personalize Ecommerce.” Based on Grau’s findings, it is quite clear that many of these online retailers are not at all concerned about privacy issues as they track customer behaviour on their sites.

“In addition to monitoring shopping behavior on their sites for clues about customers’ immediate purchase intentions, these early adopters are also trying to gain insight into broader consumer trends based on the likes and interests people express on social media,” said Grau. “Retailers see opportunities to use this data not only to better personalize product recommendations but also to influence merchandising decisions on their sites, and in the case of multichannel retailers, at the local store level.”

The expression “this is just the tip of the iceberg” is especially useful here. Let’s pretend this iceberg contains layers upon layers of extremely valuable customer data that once mined, will undoubtedly yield enough knowledge about each customer to finally deliver the fully personalized web experiences. Now think of mining that iceberg with just an ice pick. Many retailers’ personalization efforts are unsophisticated and struggle to make data actionable and drill down to personal level. In fact, a 2012 joint survey of US marketers conducted by Columbia Business School and New York American Marketing Association found that the biggest obstacle is the lack of sharing data across an organization. See, much more than the privacy issues, it is the technical and organizational obstacles to mining this data which are truly holding us back. But new tools and platforms are advancing the technology every day. It seems that the proverbial icebreakers seem to be on their way to replace the ice picks.

“The good news for smaller, less-technically savvy retailers is that a new group of product and service providers has come along with platforms that offer some of the personalization muscle being flexed by the industry leaders,” noted Grau.
So how far away are we from a fully personalized web experience? With privacy issues being less of a concern to the major retailers (if they ever were truly a concern at all), we are starting to see a focussed effort on big data mining that will surely yield to more and more personalized shopping experiences online. These efforts are already paying off with reports of higher customer spending and customer retention. As long as retailers continue to see a profitable return on these efforts, they will continue to advance their efforts. Still a ways to go, but personalization is finally safely aboard the progress train.

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