How will personalisation in e-commerce look like in the future?

Certainly, we all came across some individualized product recommendations on Amazon or a personalized welcome message in our favourite online shop. But how will the future of advertising look like? The PR agency Frau Wenk has asked this question and invited us to give our opinion within the framework of their blog carnival.

Akanoo serves big online-shops and is in constant exchange with new prospects, partners, consultants and technology providers. We put together the recent and most relevant feedback which answers the question:

How will personalisation in e-commerce develop in the next five years?

Gwen Sahmoune, Country Manager France: “For me, the personalization will be through recommendations and marketing segmentations (what kind of persons are we targeting and offer proper items to this kind of persons). There will be less chatbots and display advertising. Chatbots because people are waiting for real persons to speak to. No robots and display advertising because users get irritated of the mass advertising. So I think users are waiting for advertisement to help them find what they’re looking for and not getting on their nerves.

A study from Netwave show that 64% of the users are expecting promotion as personalisation, 45% recommandations, 25% recommandations of articles in relation of what they previously bought and 26% content in relation of their search and expectations.”

Moritz Schott, Founder & Head of Sales: “Personalisation will be driven by new User Interfaces like Amazon Alexa, which lead to the expectation that there is always one answer to a specific request. These devices will remember the frequent needs of a user and remind him, that his coffee powder might be empty soon and new coffee powder should be purchased. Additional services will support these learnings and offer predictive services to customers. If coffee powder is somewhere on very good bargain they recommend to purchase the need for the next six months today. For all users will be in depth profiles available which describe their buying preferences to be served satisfacting. Mobile will even increase its overall market share as desktop and laptops are getting obsolete with streaming options on different screens.”

Torge Schmidt, Data Scientist: “I believe online shops will increasingly provide users with automatized personalized front-ends that differ in category selection, recommendations or even design. This automation is made possible by the increasing use of big data technologies.”

Stefanie Wolter, Account Director: “Data Collection and Analytics will be the key to keep up with the increasing needs and expectations of multi-channel customers. We will see an immense increase of persona driven and highly personalized customer loyalty incentives as well as real-time interaction across the full customer journey. On-site analytics will become even more in-depth and more predictable and will move in the focus of upper management.”

Kira-Konstanze Wewer, Account Engineer: “I think we are heading to a future pretty similar to the dystopian society of the film “Idiocracy“. What does it mean exactly?

Well, Idiocracy tells about a future where people just believe every claim a company or politician makes. Sounds like Mister President of the United States, right? His followers already believe in him as a brand. Credibility will become very important: Are we producing environmentally friendly? Are we producing in third world countries or in an area nearby?

The very important decisions will be made by the values a brand stands for, more than some of their product lines. To be honest, many companies do produce and sell very similar products – so why prefer X over Y will be an issue. Also, in Idiocracy the clothes are like advertisement with logos all over them. Try to find some branded products without the brand logo, it will become very hard. Customers are used to promote the brand by using them as a surface, while they think they promote the values I talked about.

So will this happen in the next five years? Maybe not. Hopefully. But as you can see the warning signs of it, you have to be prepared for a world where “choice” is an illusion, made by very clever marketing people. They will tell you about the advantages of their brand, while you don’t know it belongs to the same company as the brands you despise for their non-ethical behaviour. In your facebook filter bubble, it is already happening. But it will become normal for you to get filtered everywhere. A good algorithm already knows what you want before you made the decision about it. In Germany, too many people find this scary, but I think in a few years we will be grateful. Nobody can be up to date on every new cool product. Personalized marketing campaigns will help us to find what we believe we need.”

Jacob Thomsen, Account Manager: “For shops with a large heterogeneous range of products it will be more important to know what the customer is specifically looking for. The shop need to define user profiles or personas for certain product categories to address their customers correctly. The buyers shopping history will be important. What did the customer bought last? What products are interesting for him, but he hasn’t bought yet. To make special offers or deals for products, the customer who is not so likely to buy will play a major role in personalisation. Also, inspiring the clients with new products will be important. Stylefinders like Zalon are an example for inspiring the customer with products he could be interested in. This can be also be adapted to other branches, too.”

Ralf von der Reith, Assistant Account Engineer: “I think the role of personalization in our daily lives will increase continuously. Not only in the field of e-commerce, but also in terms of election campaigns and other areas of life.

The ongoing development in computing speed and memory as well as progress in the field of machine learning allow us to evaluate large amounts of data and to respond in real time to customer behavior.

In addition to the real time analysis, I can imagine that in the medium term data from different sources, like from the shop and Social Media, will be combined, to gain deeper customer insights.

Especially with the wealth of information, it will be more important to show users offers that are highly interesting for them. One of the major challenges will I be not to target a customer based on his previous purchases, but to predict what he will buy.
The typical examples are some commercials on Amazon – After I bought a drill, I will see more drills as recommended products. I think there will be further developments in this area in the future.”

Frank Wolf, Senior Data Scientist: “There is a lot of unaimed and therefore ineffective advertisement out there right now. I think that will become even more obvious over the next years. Therefore companies will win that target customers individually and sensibly. Ultimately, this will lead to less but more intelligently applied advertisement campaigns benefiting the individual customer better and hence shops and ad-service providers. In that regard I think Akanoo’s future is bright as it draws conclusions from vast data sources to predict what will work for whom and when.”

Hendrik Köhnke, Account Manager: “Personalisation in e-commerce will more and more be specific regarding what the user wants and what he needs. It even might be possible that online shops at some point and with the help of big data will be able to show those products only to visitors that are really interested. In this way, shops for example could manage their stocks in a more efficient way.”

Which technologies will be important and why?

Gwen Sahmoune, Country Manager France: “Reco engines, Akanoo algorithm of course. ;) And engines that make the user experience positive.”

Stefanie Wolter, Account Director: “I believe that we will see lots of great technologies coming up in the field of CRM tools for persona creation and management to keep track of all customer needs. Also, data driven On- and Off-site targeting tools that put personalisation in their focus and data mining tools that ensure cross-device and omni-channel analytics will be important.”

Kira-Konstanze Wewer, Account Engineer: “Marketing has to understand, that banners do not work. People are exhausted by spam, clickbait and bling-bling on every page they enter on the internet. So just stop it. This has to be replaced by intelligent targeting, sold via cost per order. Only when it’s useful to the advertiser to show the campaign to the people who are really interested, the negativity about online marketing will perish. Instead, customers will be grateful for finding the right product for their needs, helping them to find a good deal or leaving them be if they are not interested.

We have to change from being a buzzing fly around their heads to becoming their shopping assistants. There are already good algorithms out there and very good chatbots who can help with individual problems. We have to transport a feeling of “your are important to us, customer” and “we see ourselves as your partner, not the salesman at your door”. Akanoo is able to do such personalisations. I am impressed on how neat our campaigns are compared to other companies out there. I believe our ideas will be the future.”

Jacob Thomsen, Account Manager: “Data Machine Learning for personalisation. I guess Virtual Reality will also play a role in getting the customer inspired with new products. This could be interesting for DIY projects, interior or travelling. The customer will be more likely to buy a trip to a hotel, when he can feel what it’s like to be there. Make the look and feel of product more accessible to the customer will be important to actually sell it. For fashion you can imagine to be in your dressing room, look into the mirror and see products screened to mirror to see how they would look on yourself.”

Frank Wolf, Senior Data Scientist: “On one hand, I think we will see more big data, more machine learning and more statistical testing. On the other hand, I think classical customer feedback processes will stay as important as ever: in the end we want happy customers and happy customers result in a better business. Innovation can only be advanced by humans with technology used as a sensible tool.”

Hendrik Köhnke, Account Manager: “As there is a trend of using artificial neuronal networks, this technology will certainly be an important tool for personalisation in e-commerce. This will help to find out what a potential customer really wants in a faster and more accurate way. This also will provide companies with much more data as they have now.”

Leonard Kleinfeld, Account Manager: “In the future, algorithms and bots will carry out large parts of our work. The future will only be controlled, filtered and less open.”