Personalization has become a major buzzword for 2023 in the digital shopping experience as consumers increasingly expect retailers to tailor the products marketed to them.
According to a report by McKinsey, using personalization can reduce customer acquisition costs by 50 percent, increase revenues by 5 to 15 percent and increase return on investment for marketing by 10 to 30 percent. Moreover, McKinsey’s research found that 71 percent of consumers expect companies to deliver personalized and tailored interactions, with 76 percent of consumers expressing feelings of frustration when they don’t.
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To create a successful Black Friday and Cyber Monday, Amazon leaned into using personalization technology tools to help the e-commerce giant enhance the customer experience for the holiday shopping season.
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“Our vision, over time, is that we’re creating an entirely personalized deals event just for you as an Amazon customer or Prime member,” said Carmen Nestares, vice president of U.S. Prime and marketing tech at Amazon. “We think of this as a unique shopping experience that is tailored and curated for you, where all the deals served to you are spot-on with your specific shopping needs, interests and inspirations.”
The company has reported that from Prime Day 2022 to Prime Day 2023, it has seen a 75 percent increase in more items purchased year-over-year through its personalized recommendations. Amazon extended the holiday shopping event to 11 days to accommodate more deals over more days.
Nestares said that Black Friday and Cyber Monday was the most personalized shopping event yet for Amazon customers. The highest performing personalized collections were titled “Deals related to your wish list,” “4+ Star deals for you,” “Deals on holiday gifts for you in [Category, e.g., Fashion, Home, Beauty]” and “Deals inspired by your recent views.”
While personalization has been a major play by retailers over the past year, it has been part of Amazon Shopping’s DNA since 2021, said Nestares. The company first introduced a personalized deal category for customers through roundups of recommended deal suggestions on the homepage, which is unique to every shopper.
“We want to meet the needs of the customer who shops early and have deals for those who wait until later — which is why we’ll be dropping new deals every day through Dec. 24, helping customers save on a wide selection of products with fast delivery to cover all of their holiday needs throughout the season,” Nestares told WWD.
Bestselling categories for Amazon include electronics, toys, beauty, fashion, fitness and home. The major brands found on the e-commerce platform in the “new and noteworthy” section include BareMinerals, Coach and Hydro Flask, among others.
On Prime Day 2023 the e-commerce platform increased its personalized recommendations from last year by over 2.5 times, which in turn, drove four times the consumer engagement. Back in 2021, Amazon had just one personalized feature deal, whereas today the company has more than 40 features.
New enhancements within Amazon’s personalized recommendations include access to a “deals” feed within the “keep shopping for” section with personalized recommendations deals taken directly from consumers browsing history. Shoppers can also find deals on previous purchases with the “buy again” feature and at the top of the “buy again” section of the Amazon Shopping app where customers can access a “deals” feed.
“We are rolling out a new lists experience to help customers find deals on items they’ve previously saved to their lists,” said Nestares. “Previously saved items will now be automatically grouped into relevant product categories, featuring all saved items that are on a deal in one list.”
Nestares explained that Amazon’s recommendation algorithm is based on numerous factors, such as looking at what products the shopper browses, previous purchases or additions to their lists. Consumers can also manage their recommendations by editing their browser history and excluding purchases not relevant to their future recommendations.
“Amazon is investing in our customer experience strategy long-term to deliver a personalized shopping experience for Amazon customers,” said Nestares. “Our overall goal is to make shopping as easy as possible for customers to navigate by finding deals they care about based on browsing history, likes, lists and past purchases, while also discovering deals on new products they may be interested in.”
With more than 200 million paid Prime members and counting globally, Amazon said that it will continue to use personalization tools to offer all its shoppers the best deals not just during the holidays but throughout the year.