Deep diving into the promises, potentials, and problems of personalized e-commerce experiences.
We can glorify e-commerce personalization as a wonderful way to build strong and long-lasting relationships with customers, but if we care to put it bluntly: personalization is just another tool for companies to sell more by optimizing recommendations and experience. In a world edging closer to ecological collapse thanks to excessive and unnecessary consumption, it is overdue to ask ourselves: what are we doing using design influence and tools, like personalization, to encourage customers to buy crap they don’t need?
In this article, I invite you to think critically about personalized e-commerce experiences.
I love getting random, crappy recommendations
I get the most random crap recommended to me when I shop online. The other day I added a jumper to my cart on Shein (of course, for research purposes, no shopping from Shein or Temu in this household), and I got recommended more jumpers…pants, so far so good… these weird plastic socks, that I never understood why people wear, just by looking at them makes my foot stinky…a foot warmer thingy, huh?…and a toy telescope with flashlight, what is that even?
My recommendation section in Shein’s cart
I’m personally not offended when I get crappy recommendations, because
I’m happy I’m not tempted to add more things to my order, you know trying to keep my consumption minimal, climate crisis, environmental impact and stuff.I’m happy that Shein doesn’t have enough information about me to recommend things I might actually like.
But I seem to be in the minority with this perspective.
Consumers want, indeed expect and crave personalization
“Consumers today expect personalized experiences across all digital touchpoints” (source)“The question isn’t whether shoppers want personalization. It’s very clear that they crave it.” (source)
There are even some numbers supporting these bold claims:
66% of consumers share that coming across content that isn’t personalized would deter them from purchasing. (source)91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them. (source)56% of customers are more likely to return to an e-commerce site that offers product recommendations, while 74% of customers feel frustrated when website content is not personalized. (source)Gartner found that customers who find company emails irrelevant and annoying “unsubscribe” (48%) or “stop doing business” with that brand (14%). Ouch…
After reading all this, it seems like customers want companies to take their personal data and use it to target them with more things they could buy.
But why is that?
Why are customers ready to give up their personal data in exchange for tailored recommendations and shopping experiences?
Most of us probably think about it as a compromise. I’m going to let this site/company use my data so in return I get the benefit of:
Saving time and effort. There is so much stuff to buy. Like sooo much. Finding the one thing that you are actually looking for can take ages and drain you mentally. Of course, lifting off the weight of the search through recommendations, search results, and offers tailored to your taste, will make your life easier.Feeling valued and understood. Despite all the screens and AI we live with, we are still humans craving connection and recognition. We want others to notice and appreciate us. So when massive companies send us tailored communication with our name highlighted, recommending products we actually like, we happily take that on the surface level and thank them for understanding us so well. We might even forget that in reality, we are just a number in their CRM system, where all this personalized content is automated, just so they can sell more to us.
And there are some people, like me, who are not ready to give up their data in exchange for convenience and recognition, but it is taken anyway. Without asking, or through deceptive cookie policies.
As one article put it: “Is there any worse feeling as a consumer than being marketed to with personal information you didn’t freely provide to a company? It’s an awkward way to learn that a brand is hunting down your personal data, and it doesn’t help build a trustworthy relationship.”
No, it does not.
Dear massive corporation, please don’t stalk me!
We need to talk about the personalization-privacy paradox
Apparently, for personalization to work, “you need a deep understanding of [your users’] interests, behaviour, and preferences.” (source).
Am I the only one reading this and screaming “No thank you!”?
Dear massive corporation, please do not understand my interests, behaviour and preferences so you can exploit them for profit.
But it gets worse. Some companies argue that “in the hypercompetitive world of personalization, this surface-level data is not enough. Enhancing your customer’s profile will require you to collect relevant data about how your customer interacts with your brand on all channels, what motivates them to purchase and what makes them tick …”
Hmm..doesn’t this sound a little dystopian? Corporations understanding my essence to make me consume more!? Sadly it has been happening for decades and the technology to collect and use this data is just getting better.
The different ways to collect data about users. Source: bloomreach
I feel the more pervasive the data collection is, the more desensitised we are to it. Like when we are furious that companies can detect when someone is pregnant by crawling through their data, who cares if they collect our location without asking? It seems insignificant in comparison, yet it is not.
Not all data is created equal. According to 2022 Statista data, “80 per cent of responding consumers believed that it was appropriate for marketers to collect the brand purchase history of their clients.”
What data users feel is okay to collect about them. Source: Statista
However, less than half of respondents thought it was appropriate to collect data on a user’s important life events.
A Gartner report found that 57% of consumers say they will unsubscribe, and 38% will stop doing business with a brand in response to perceived creepiness. Customers are ready to “punish brands if their excessive use of data points makes the personalization so detailed as to appear downright creepy or invasive.”
So it seems users are ready to share SOME of the data about themselves to get the benefit of saving time and feeling understood, but is it also clear that they are SENSITIVE about which and how much personal data brands use in their personalization efforts.
More importantly, customers want to BE IN CONTROL of what data is collected and how it is used to personalize their experiences. (source)
Data is also expensive
“Our ability to gather data far outpaced the ability to make sense of it” (source).
As a Gartner report highlights, “In recent years, e-commerce brands have become data collection powerhouses. The only problem is that massive volumes of data remain disorganized and inaccurate.” In the picture you can see that only a fraction of the companies that collect data actually use it.
Data collected vs. Data used from 2019 Gartner report
Not to mention that the more data you collect, the more liability you invite on the company. Luckily today we have laws and regulations in place to keep companies accountable for safeguarding customer information. “In the age of increasing breaches, you really want to minimize the risk and liabilities that can lead to massive financial cost.” (source)
On top of this, storing data, especially when it just sits unorganized on a server, has a high cost. Both financially 💸 (paying for storage) and environmentally 🌱 (read more about the environmental impact of servers and data storage here).
Personalization is a key business move in today’s cutthroat competition.
“Companies that fail to offer unique, tailored experiences that foster customer engagement and develop brand loyalty will fall behind.” (source)“And quite frankly, this [extreme] level of personalization is what’s necessary to succeed in the e-commerce market today.” (source)
In today’s cutthroat market competition, a massive amount of companies are fighting for the same set of customers’ money. To get customers to buy from them instead of a competitor, companies have to show something exceptional. According to a Shopify article: “Personalization is the key to stand out on the market.”
And why do companies want to stand out in the market? To earn more money, that’s right!
“[Personalization] drives sales, increases conversion and gets [the users] to come back for more.” (source)“[Personalization] improves satisfaction and engagement, leading to higher conversion rates and lower abandonment.” (source)“Personalization leads to higher average order value: Personalized product recommendations can help cross-sell and upsell complementary or higher-value items.” (source)“By receiving this consistent level of personalization across all channels, consumers will be inclined to purchase more and to purchase again from the same brand that made them feel seen and heard.”“eCommerce personalization is like having a savvy shop assistant who knows just what you’re after. It jazzes up the shopping journey, making it tailor-fit for each user, which means more sales and fewer abandoned carts.”Let me put this plainly: eCommerce personalization is just another tool to drive excessive consumption so that companies earn more money.
What exactly is wrong with getting users to buy more through personalization?
If you think like business, you likely rejoice at having personalization as a super-weapon to sell more. Selling more in the current economic system is good…the best that can happen to a business. More often than not, selling more is the only metric that matters to a company.
In the meanwhile the planet is turning into a dumpsterfire 🔥 because of our excessive consumption of things we don’t need and don’t even bring value to our lives. Keeping this level of material consumption is taking us towards an unlivable climate and environment.
Not everyone working with e-commerce connects the dots between selling stuff and that stuff’s actual environmental impact. Or maybe they do and just conveniently ignore it so they can keep working for companies like Shein and still sleep well at night.
Environmental impact of pushy e-comerce
Part of the problem is that as designers we are not thinking about our design decision in the big picture. We are great at focusing on local impact like “we helped our user to find more things to buy and reduced the number of clicks to complete the purchase”, yey for convenience. We might add “we also helped decrease cart abandonment rate”, yey for revenue. Job well done!
Oh wait a minute…we forgot to mention that 90% of the things we sell end up in the landfill after a week because they are completely useless, a fad, or just fall apart.
As designers understanding that our design decisions have a widespread and manyfold impact in the “real world”, we must realize: when our planet is devastated by excessive consumption, we simply can’t use our influence and design tools to push for more mindless shopping.
It is time for e-commerce design to evolve from pushing excess and impulse purchases to supporting intentional and thought-through buying decisions.
Now the question is: how can e-commerce personalization be a part of that?
Personalization is a double-edged sword
Now that we have a good understanding of how personalization can be a means for excessive consumption, it is time to be a bit more nuanced.
Personalization is not all bad, it can indeed be an aid in being more mindful consumers. For example, when we serve exactly what the user is looking for in the recommendations, we can help them avoid purchasing the “wrong” thing(s). This reduces unnecessary purchases and is ultimately good for the business too, since we can cut down on the cost of handling returns.
Of course, we can’t escape the system our business operates in. The e-commerce businesses we work for make money by selling stuff. So however much I would like personalization to be purely about “being nice to the user and helping them buy intentionally”, it won’t be. The underlying goal is always profit, yet I believe there is a difference between:
Using personalized cross and upsell recommendations to encourage impulse purchases and squeeze the maximum amount of money out of our visitors. orUsing personalization to build long-term relationships with our customers based on trust so they are going to come back to do business with us
Can you guess which one is the more (environmentally) sustainable approach?
Here is how we could think about personalization in a more environmentally sustainable way
If using personalization to push impulsive, excessive consumption is an unsustainable approach, we want to move towards the opposite: using it to help mindful, intentional consumption.
Instead of going for a short-term spike in sales, let’s focus on nurturing long-term connections and thus increase lifetime value.
We align our personalization strategy to achieve this by using it to
Build trustRecognize the userProvide value
Building trust means user control and transparency over data collection and use
Here are some ideas on how to achieve this:
1.Use zero-party data above everything else
Zero-party data is data that a customer intentionally and proactively shares with a business. It can be collected through questionnaires or forms where the user purposefully discloses preferences, purchase intentions, personal contexts, and how they want to be recognized by the brand. “The real value in zero-party data comes from your customers’ intent to give it to you. First-, second- and third-party data are not freely given by the customer and it matters when data privacy concerns are at an all-time high.” (source)
My Jewellery “Style Profile test”.
2. Make data collection opt-in
If you want to use other than zero-party data, let users choose and agree on what data is collected about them.
First-party data, eg. location, browsing behaviour, purchase information/history, cart abandonment behaviour.Third-party data: forget about this. It is a mish-mash of unrelated data from unreliable sources, it has no direct relationship with the user and it quickly becomes outdated. Just don’t.
3. Disclose benefits clearly
If you want users to opt into sharing their data, tell them why they should. What is the benefit they are getting from sharing their browsing history?
What if Shein had a transparent, privacy control panel?
4. Collect only the data you need
Be strategic about what data you need to collect (again, based on your personalization goal) from the get-go and collect only those.
TO SUM IT UP
Personalization is a tool, and like all tools, its impact can be positive or negative depending on the outcome we want to achieve. As long as the personalization goal is “get users to buy more” in the middle of a climate crisis…we have a problem.I understand why personalization is important. It is a way to provide value to the user and stand out in the market. But isn’t it better to stand out in the market by being kind and transparent with the user as opposed to just exploiting them as most of your competitors do?Designers working with e-commerce need to understand the impact of their design decisions in the real world. On the brim of an ecological collapse, using design influence to get users to buy more, buy mindlessly is unethical to say the least.
Final thoughts
If you are working in eCommerce now you might be pulling your hair, or just smiling dismissively: she has noooo idea what she is talking about. Designing for reduced consumption…never going to happen.
And you know what, that’s okay. I know I have a wild idea, advocating for supporting mindful consumption in a world built on consumerism and perpetual growth. I’m well aware that there is a whole industry focused on optimizing shopping experiences to the last pixel to turn the maximum profit.
Yet, I feel there needs to be a discussion. We can’t blindly accept a dysfunctional status quo and design our way into collapse.
So please share your thoughts, I’d love to hear what you think.
Hi, I’m Anna and I drive Kind Commerce. I write and talk about the intersection of design, consumerism and sustainability, so if these topics sound interesting, let’s connect on LinkedIn or subscribe to my newsletter.
E-commerce personalization: helping users or exploiting their personal data? was originally published in UX Collective on Medium, where people are continuing the conversation by highlighting and responding to this story.
