The rise of relevance for ecommerce. By Michael Rochon
There is a great irony that brand loyalty is waning at a time when reaching customers has never been more straightforward for most retailers.
As retailers go to ever greater lengths, both online and in real life, to reach their target audiences, consumers are becoming increasingly selective about where they spend their time and money.
This shift is partly because consumers have many options and are behaving more frugally under the pressures of high inflation and economic uncertainty. However, it also coincides with the industry moving away from third-party cookie-based attribution, meaning that brands must place much greater reliance on first-party data to provide direct insights into consumer behaviors.
Far from being a point in which retailers should simply accept these uncertain times as the new normal, there is fertile ground for ecommerce to nurture customer loyalty by doing even more, with less.
AI, machine learning, and first-party data
Doing more with less will be a core element of AI’s mainstream adoption across the e-commerce industry this year. AI tools for monitoring first-party data are growing in abundance while first-party data and AI can help brands and retailers understand their customers and provide them with the best possible experience. By using and analyzing their own first-party data, brands gain a powerful advantage in predicting and meeting customer needs. They can use this information to personalize their marketing campaigns and create products, services and experiences that meet specific needs of each customer.
Leveraging AI and machine learning will help to harness the power of first-party data and save time; understanding customers based on demographics, behavior, interests, and context, providing the most relevant messages in their marketing campaigns. AI-powered algorithms combined with first-party data allow ecommerce retailers to drive up sales by creating highly relevant experiences.
Winning hearts and minds
The industry’s shift away from third-party cookies and towards privacy-forward, scalable technologies, raises questions around whether consumers feel ready for such change.
A global study by Rokt in partnership with The Harris Poll confirms that consumers already have the appetite for improvements driven by AI, with younger shoppers in particular (88 percent of Gen Z and 77 percent of Millennials) agreeing that AI can improve online checkouts. Furthermore, 55 percent of Gen Z and 52 percent of Millennial shoppers would welcome an AI shopping assistant.
These are promising signs for the future of ecommerce but decision-makers in the sector must remember that the sheer volume of promotions and advertisements at any time of year can be overwhelming, never mind at the point of sale.
Among US survey respondents to the same survey, 73 percent said they often experience some form of frustration or barrier at checkout, including having to log in/make an account (33 percent), too many ads at checkout (34 percent), or irrelevant ads and product recommendations (33 percent).
When encountering a frustrating checkout experience, 40 percent of US consumers have reconsidered their purchase or removed items from their cart, 37 percent have abandoned their cart and not returned to it and 22 percent say that kind of experience has lowered their perception of the brand.
The potential for a loss of sale is high at the point of checkout; unfortunately, many brands get it wrong. Relevance, powered by technology, is so important as it minimizes options and cuts through the noise.
Ensuring privacy
While consumers appear to be embracing change on the whole, ecommerce platforms and their end customers will need to provide increasing reassurance that relevant, personalized shopping experiences can be achieved without compromising on privacy.
With the convergence of global privacy regulations and big tech platform adjustments to limit the way the traditional open web RTB ad-tech ecosystems use (and potentially exploit) user data, publishers and ecommerce companies are finding new, innovative, privacy-focused ways to continue to serve relevant content.
This shift has highlighted the value of using first-party data in a limited context (without sharing, disseminating or exposing it to third parties) where brands can provide full transparency and control to customers over how their data is used. Solutions like data clean rooms and private marketplaces will continue to adapt and evolve, as they allow companies to collaborate with brands and enable connected ecommerce experiences without the inherent risks associated with the conventional RTB supply chain.
Relevancy is key for 2024
In the end, the goal of any retailer is to make the customer’s shopping journey as seamless and rewarding as possible. Especially in e-commerce, where an abundance of options is available. The paradox of choice highlights the ongoing importance of reducing clutter and achieving more, with less.
For retailers, advertisers and customers, this will mean embracing AI and new technologies to shape a future where digital advertising is increasingly relevant, effective and respectful in the ever-changing world of e-commerce.
Michael Rochon is VP of Client Success. He leads Customer Success for Rokt’s key markets. Rokt is the global leader in ecommerce technology, enabling companies to drive incremental value from every transaction by unlocking relevant messages when customers are most likely to convert. Rokt’s machine learning platform, built over the last ten years, and scaled network powers billions of global transactions annually for the world’s leading companies, including Live Nation, AMC Theatres, PayPal, Uber, Hulu, Staples, GoPuff, Lands’ End, and HelloFresh. Headquartered in New York City, the company operates in 15 countries across North America, Europe and the Asia-Pacific region and has been recognized as one of the fastest-growing private companies in the US by Inc. for the last three years in a row.