Personalization in Shopping Data from 150 Million Shoppers on How AI Impacts Revenue and the Shopper Journey 15+ 2 3 4500+ Table of Contents Key Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05 The Impact of Personalization on Conversion Rates and Shopper Spending . . . . . . . . . . . . . . . . . . . . . . 06 Innovation Q&A with a Data Science Visionary . . . . . . . . . . . . . . . . . . . . . . . . 10 Trailblazer Story: Stonewall Kitchen . . . . . . . 12 The Unique Traits of Shoppers That Engage with Recommendations . . . . . . . . . . . . . . . . . . 14 Trailblazer Story: PacSun . . . . . . . . . . . . . . . . . 17 5 Best Practices to Implement Personalization . . . . . . . . . . . . . . 19 Trailblazer Story: Room & Board . . . . . . . . . . 21 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Resources to Learn More . . . . . . . . . . . . . . . . . 24Key Findings The following is a summary of key personalization trends, findings, and benchmarks.1Product recommendations drive revenue. Visits where the shopper clicked a recommendation comprise just 7% of all visits, but 24% of orders and 26% of revenue. Page 6 Shopper spend soars with personalization. Purchases where a recommendation was clicked saw a 10% higher average order value, and the per-visit spend of a shopper who clicks a recommendation is five times higher. Page 7 Different devices mean different behaviors. For example, mobile shoppers that click recommendations complete orders at a higher rate than desktop shoppers. Page 8 A winning combination: personalization and site search. Shoppers that use search and click a recommendation convert 3.7 times more often than those that only search -- and 4.2 times more on mobile. Page 95Recommendations are directly linked to longer shopping visits. Shoppers that clicked a product recommendation spent an average of 12.9 minutes on-site vs. 2.9 minutes for those that didn't click recommendations. Page 14 Your recommendation-clicking shoppers have a high propensity to buy. Only 6% of shoppers clicked a recommendation, yet 37% of shoppers that placed an order clicked a recommendation. Page 16 Recommendations lead to sales. Nearly one in four products bought by recommendation-clickers came from recommended items. Page 1626374PERSONALIZATION IN SHOPPINGcommercecloud|3Methodology The Personalization in Shopping Report is an analysis of more than 150 U.S.-based direct-to-consumer digital commerce sites that used personalization on-site from March to June of 2017. The data includes shopping activity across more than 250 million visits, which created more than half a billion dollars in gross merchandise value. THIS REPORT ANALYZES SHOPPING ACTIVITY ACROSS250 150Million visits to ecommerce websitesTo qualify for inclusion in the analysis set, a digital commerce site must have transacted throughout the analysis period of March to June and met a monthly minimum visit threshold. Additional data hygiene factors were applied to ensure consistent metric calculation. Data footnotes are noted inline as appropriate in the report to provide additional clarity on analysis. This report is not indicative of the operational performance of Salesforce Commerce Cloud or its reported financial metrics, including GMV growth and comparable customer GMV growth.Million shoppers$550 320Million worth of ordersMillion shopper clicksPERSONALIZATION IN SHOPPINGcommercecloud|4Introduction Ask someone how they shop today, and you'll encounter nuances and technologies that were barely on a retailer's radar ten years ago. From artificial intelligence (AI)-powered product recommendations to receiving deliveries in less than an hour, shopping is being disrupted to an unprecedented extent.Technology makes it possible to connect with customers in new and exciting ways. But with increasingly mobile and task-switching shoppers navigating expanding product catalogs, retailers need to be ready with personalized content and intelligent recommendations. They must show shoppers exactly what they want to see, efficiently and in real time. They also must consider how to leverage the power of AI to anticipate their customers' next moves. That's why personalized shopping experiences are the future of commerce -- and the only way to compete amidst consumers' expanding expectations. Looking for proof This report analyzes the shopping activity of more than 150 million shoppers and their 250 million visits to ecommerce websites -- that includes $550 million worth of orders and 320 million shopper clicks. We'll look closely at this data as it relates to personalized product recommendations and how these recommendations impact conversion rate, average order value, per-visit spend, and more. You'll also learn about how to implement successful personalization tactics -- without an army of data scientists -- and hear stories from retail trailblazers. From this research, you'll discover that personalization is critical for a better shopper experience and increasing your sales dramatically and intelligently.YOU MIGHT ALSO LIKEPERSONALIZATION IN SHOPPINGcommercecloud|5The Impact of Personalization on Conversion Rates and Shopper Spending Providing your customers with a personalized shopping experience is now the cost of entry to retail. Fifty percent of consumers say they're likely to switch brands if a company doesn't anticipate their needs, and 58% of consumers say technology has significantly changed their expectations of how companies should interact with them.1 But personalization is more than a boon for customer experience; it is driving digital commerce sales. In this section, we take a deep dive into the business implications of AI-driven product recommendations. You'll learn the tangible financial results that retailers tracked when shoppers engaged with their recommendations. For the purposes of this research, a recommendation refers to a suggested product that a customer sees and can click or tap to reach a product detail page or category page, or within a cart (75% of total recommendations, 16%, and 5%, respectively). And if you're thinking AI seems out of reach, don't worry -- the basic recommendations you may already be generating on your site or encountering when you shop or browse Netflix are a form of AI. Eventually, more and more aspects of your site will be individualized, down to the content and offers. But implementing product recommendations, whether you manually generate or automate them, is a smart and profitable way to begin leveraging the power of personalization. 1. State of the Connected CustomerPersonalization and Revenue Today, most visits to an ecommerce site don't result in recommendation clicks -- but the visits that do are extremely productive. Visits where the shopper clicked a recommendation comprise just 7% of visits, but create 24% of orders and 26% of revenue.VISITS WITH RECOMMENDATION CLICKS7% VISITS24% ORDERS26% REVENUEPERSONALIZATION IN SHOPPINGcommercecloud|6SHOPPERS THAT CLICK RECOMMENDATIONS ARE: $96.00$96.00YOUR CARTXSSMLXLYOU MIGHT ALSO LIKEMORE LIKELY TO CREATE A SHOPPING CART4.5 MORE LIKELY TO COMPLETE THEIR PURCHASE4.5 $24.00 $37.00SUB TOTAL: $157.00 SHIPPING: $00.00 TOTAL: $157.00CHECKOUTIt's telling that such a small percentage of total visits accounts for such a large portion of total orders and revenue. Retailers have long surmised that recommendations were an important component of an ecommerce site, but this data shows how closely linked recommendations and high revenue are. The product detail page (PDP) is the new battleground, with 30% of site visits starting on the PDP.2 By shifting shoppers' attention to recommended products on PDPs and other key recommendation zones like category pages, retailers can