This article has been written by Suresh Harikrishnan, CEO, Nudgespot. This article was published in issue 07 of Social Technology Quarterly. Summary: Real-time enables e-commerce companies to efficiently handle shopping cart abandonment through relevant offers, recommendations, and marketing that can improve conversion rates.

1. TheSignificance
ofReal-time
Personalization

2. Kuliza Social Technology Quarterly Issue 07
Real-time enables e-commerce companies
to efficiently handle shopping cart
abandonment through relevant offers,
recommendations, and marketing that can
improve conversion rates.
by Suresh Harikrishnan
Photo Credit: schizoform
According to econsultancy’s latest report on conversion rates,
optimization in e-commerce companies and conversion rates are
falling and are at 3.8%, down 8.4% year-on-year. Approximately,
only 10% of your visitors add products to their cart when they are on
your store, yet, about 70% of them do not complete their purchase.
This is both a huge opportunity and a problem at the same time.
Shopping cart abandonment is a key issue e-commerce retailers
encounter. Users visit your e-commerce websites but leave without
buying. No amount of marketing budget is likely to fix this. In fact,
your ROI on marketing spend will only come down as you spend
more. Research shows that the two biggest reasons for people
abandoning their shopping carts are: 1) they find it difficult to make
up their minds and 2) pricing. People who have abandoned their
carts have already expressed their interest by adding products on
your store, so it only makes sense to understand and engage these
customers. E-commerce majors have used a variety of solutions to
address these, including - integrating with social networks through
their widgets, offering discounts, reducing the number of steps in the
checkout process, email reminders, and so on. You can improve the
effectiveness of these in leaps and bounds by making these relevant
and real-time.
Real-time marketing can make a huge difference to your conversion
rates. Most customers are used to discounts and deals online; these
hardly make a big difference to your conversion rates. However,
when these promotions are personalized to different visitor
segments, and offered when they are browsing on your store, you
are bound to see much better conversion rates. Consider this case
study of one of our customers.
The customer is an e-commerce store that sells baby care products
Commerce

3. 24
Real time provides a unique
opportunity for brands and retailers
to influence pre-purchasing
decisions. Real-time personalization
is about focusing on drawing the right
visitors and making offers and deals
that are relevant to them. By doing
so, digital marketers and brands
are making a radical shift in the
way they sell. As brands understand
more about how customers purchase,
real-time personalization is key to
maximizing sales.
Photo Credit: xavi talleda

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5. online. Their cart abandonment rates were about 65 percent. Over
a month, real-time promotions resulted in over 1,200 purchases.
But the most important fact here is that, cart abandonment rates
dropped to as low as 25 percent when customers were shown
real-time promotions. Therefore, there can be no second thoughts
on the effectiveness of in-store marketing that is both relevant
and real-time.
So how do you get started with real-time personalization? There
are two parts to this. First, it boils down to understanding your
customers. Once you understand your customers, you need to put
the insights into actions by personalizing sections of your store for
better conversions. Let us look at these in detail.
Understand Customers
It is easy to understand customers’ behaviours in the physical retail
world. You cannot do this in the online world. But this is where
analytics tools facilitate better sales. Using analytics tools like
Google Analytics, you can build conversion funnels and understand
which segments of your customers are likely to drop out without
completing their purchase. Understand how these visitors find your
store, what they are looking for, and at what stage do they drop out
of your conversion funnel. Do they drop out after they begin the
checkout or is it before? If they are returning customers, what might
have stopped them from buying? Do you find people abandoning
more items in certain categories of your product line? Answering
Photo Credit: net_efekt
these questions will help understand and identify target segments of
customers to engage. Ensure these segments are neither too small
nor too big - smaller and bigger groups are difficult to analyse and
test your personalization efforts.
Real-time Actions, Just More Relevant
Once you have identified your target segments, identifying relevant
marketing is your biggest challenge. In an age of social networks
and smart phones, context plays a key role. What are your target
customers looking for? Do you know what category of products
they are interested in? Do you know how much they are likely
to spend? If these customers are visiting your store via a paid
marketing channel, do you know what their acquisition costs are?
All these play a part in choosing a relevant action. Whether you
choose to use promotions, ads or recommendations, make sure it
is relevant to your target visitor.
Relevance comes not just from the right marketing tool, time too
plays a significant role. Remember, we are talking about real-time
- can you offer these promotions just when a customer is deciding
on the purchase instead of offering it beforehand? The best time for
these actions differs for each visitor segments. While it is better to
use these for new customers, it might make sense to delay it as long
as possible, when targeting returning customers. Use analytics tools
to gauge the best time to bring up these marketing.
The process does not stop here, in fact, this is the beginning. There

6. Kuliza Social Technology Quarterly Issue 07
is no reason that whatever personalization you choose will work.
A culture of analysing, testing, and fine tuning these changes are
critical for better conversions. Major e-commerce companies use
A/B testing as a way to choose what works best for them.
A/B Testing to Measure Feedback
Gone are the days when you can rely on your survey and support
tools for customer feedback. Most customers neither have time
nor motivation. Set goals and A/B test your changes and measure
what works best. There is no better feedback than measuring how
effective your customers are in meeting their shopping objectives
on your store.
There is an unprecedented amount of consumer data available to
marketers these days. Through this data, it is easy to understand
what causes customers to drop out before completing a purchase.
The question then is how willing are companies to understand
their target audiences better: ranging from their demographics,
psychographics, interests, opinions to their intent. As a believer
in a personalized e-commerce world, I can vouch that relevant
in-store marketing can go a long way in improving conversions
on your store.
As more shoppers move to a social, personalized world with
proliferation of smart phones, tablets and social networks,
shopping needs to be equally convenient and personalized.
E-commerce stores seem to be caught up in legacy in how the
stores are built and used online, and real-time personalization
can go a long way in making shopping a fun and social experience
that it is. In a highly competitive market that it is, real-time
personalization is critical to stand out.
References
Moth,David.“Basket abandonment:case studies and tips to help improve your
conversion rates.” Econsultancy: Digital Marketing Excellence,26 Nov 2012.
Nicholls,Charles.“The Science of Shopping Cart Abandonment.”SeeWhy.The
Conversion Academy.
Shuki, Idan Dr. “The Impact of Real Time Promotions in Digital Service
Offerings.” Better Marketing Center.Pontis,09 Jan 2008.
Gunning, Paul. “Real-Time Marketing is Upon Us - Here’s How Advertising
Needs To Adapt.” Fast Company.