17 Feb Why Context Matters in eCommerce
Conversations with eCommerce experts inevitably touch on several buzzwords that have long been the cornerstone for increasing brand loyalty and conversion rates: “Personalization”, “Relevance”, and “Context”. It’s very easy to conflate the concepts that each of these terms represent because they are, in fact, very similar in purpose (i.e. how to make a meaningful connection with the customer). Where they differ is in both how they work and how effective they are. Understanding this can have a huge impact on your bottom line.
To fully cover the evolution from personalization to context, let’s walk-through some examples with a fictitious business, Underfoot socks.
In this scenario, I’d never bought socks online before. I popped open my laptop while on the couch, and with a little Google-fu (“funky socks for men”), I came across Underfoot. By clicking on a search ad, I landed on their site and was presented with some fun designs. I added a few to my cart, conceded to the “create a new account” flow, and checked out. Easy!
A few weeks later, I decided to go back to Underfoot and saw a “Welcome, Michael” message in on the page. Underfoot now knew more information about me and wanted to tailor the experience to be more personalized… or at least they would have done that, if I had been using my laptop rather than my iPhone the second time I visited them.
This is where personalization struggles: the over-reliance on knowing who the customer is based on a specific profile in order to present content that is tailored to their needs. Considering that on average over two thirds of traffic are coming from new customers, this can mean that for up to 66% of visitors to your site, you are flying blind. As both Google and Yahoo no longer pass search queries to your site, your only option for tailoring your content for new visitors is through the use of paid ad campaigns.
A short time later, Underfoot started sending me emails with special offers. These ads used personal information from my original purchase as well as inferred information (from my original search “funky socks for men”) to guess my gender and age. This made for a more relevant pitch that resulted in my returning to the site during some downtime on a winter trip to Canada. The weather outside was all snow, which was unusual for me coming from Southern California.
I liked the sock designs, but I wasn’t ready to buy another pair of socks with fun designs. I flipped back to my email and continued on. At least I gave Underfoot a glance to see what the deal was.
Relevance did matter in this example. It got the visitor to return to the site, and occasionally, it will result in a purchase. Relevance is about leveraging personal information along with statistics about what “should” matter to the visitor, and then giving recommendations and deals that are more targeted to that specific demographic. This is more effective than relying on personalization alone, but it still misses a key ingredient: the current situation. In the example above, what I – as the visitor – wanted was something thicker to keep my feet warm during my winter trip.
So, how could Underfoot know my cold weather situation since my personal data showed me to be located in a warm climate? One way is to look at my current location and use weather information for that area. Additionally, perhaps note that my current location differs from my “bill to” information, that I’m on a mobile device, that it’s during a seasonal time of year, and make some on-the-fly assumptions about what that might mean. This is where Relevance evolves into Context.
Context is all about leveraging the information you have right now about the visitor, combined with the historical information (like a visitor’s search), and any additional relevant data (like weather information). There is a wealth of (often ignored) information that provide clues on ways to move the customer along in their journey. For example, what device are they on? Where are they located? What browser are they using? How long have they been on the site or on this page? Device and browser types could provide information on the visitor’s affluence and technical savvy. Clickstream (journey) information can provide insight into where the visitor is in the sales funnel. It is from this context that you divine what truly matters: intent. If you know intent, you know how to sell to the visitor.
Context enables the right action at the right time. It can allow a business to provide an inexpensive gentle prod (maybe a coupon code) to move the customer forward, and an expensive live assistant at a critical point of struggle (on a checkout page).
Personalization vs. Relevance vs. Context
There are numerous articles that explore this topic in greater depth. But at the end of the day, conversion rates are higher when a site is able to recognize visitor intent, engage them correctly, and facilitate their purchase effectively. Solutions that focus on context are the only ones that can address each of those requirements for every customer.