🙅🏻‍♂️ You don't know me!

Take a journey with me for a sec.

We’re in San Francisco. COVID is over. We just ate some dumplings. We’re having a nice time. A little gassy from the dumplings - but, otherwise, things are great.

We pass by a dispensary - Apothecarium - we’ve heard about it from friends, but we’ve never been inside. “I could go for a pack of Wylds or a pre-roll or something,” I say. “Sounds neat,” you reply.

We enter the lobby. The foyer is beautifully appointed, and the product offerings look incredible. We’re ready to buy.

At that moment, we branch off into two different directions in the store, and we are greeted by two different budtenders. This is where our collective journey diverges. Until that point, we had experienced the exact same thing - from our friend’s recommendation to the sign on the building to the feng shui of the couches - but now, with a personalized consultation, we might as well be in two different stores.

Our budtenders ask us about our wants and needs - do we like to smoke, are we having trouble sleeping, what are we looking to accomplish, what have we liked in the past, do we have any medically-relevant ailments, etc. They take a brief testimony and start making gentle suggestions on products we might like. We ask questions about the products, they answer. We land on a few items, and we buy them. We walk out, we discuss, we try and we share.

Everything that just happened can occur - and occur more efficiently - in a digital environment.

🤔 What is personalization in eCommerce?

Kibocommerce says it’s this:

That’s a good definition.

I’ll put a simple spin on it, too: personalization is when an online retailer tries to guess what delights you most based on your behavior. If you’re more delighted, you’ll purchase more products, more often.

(Btw, here is my take on sales being the ultimate proxy for delight, and delight being the ultimate goal of a retailer or brand, which is required reading for this discussion)

Here’s what it looks like - it’s not dissimilar to the conversation I hypothetically had with the budtender at Apothecarium; the data is just collected in a different, digital manner:

🏬 Replacing the budtender (jk)

Recently, a retail operator shared with me that 90% of the time a budtender recommends a specific product, the customer will buy it. 90%! That’s a hell of a recommendation engine.

The caveat, which I think is well-worn territory in the industry: budtenders are not all created equal. In many stores, you may hear some watered-down nonsense about indica and sativa; they may be outright wrong about a product; and worse, they may be incentivized by a supplier to hawk a specific SKU.

For the sake of this one-sided discussion, let’s assume all budtenders are knowledgeable, friendly, and patient (which is actually the case at Apothecarium, btw).

When a customer is not in-store, you want to provide the same level of service and curation as when they stroll in, belly full of dumplings. That’s where a good personalization engine comes in.

You want to personalize your offering online because:

• CONVERSION: 90% of consumers say they are more likely to convert when brands present hyper-relevant recommendations

• CROSS-SELL / UP-SELL: if you understand 1) what an individual customer wants and 2) how products are interconnected, you can seize extremely effective cross-sell or up-sell opportunities during the shopping journey

• LOYALTY: to delight a customer is not to shove product down their throat and increase basket size one time; rather, to delight a customer is to provide extremely relevant purchasing opportunities time and time again, to keep them happy and encourage them to come back

🤢 Why does personalization sometimes feel icky?

Why does it feel so different to share a few personal details with a budtender in person, than to share personal details online?

Put simply, it’s because most people have been burned before. Your budtender can’t look you in the eyes while simultaneously selling your personal information to thousands of random companies; Facebook can.

Ultimately, the user experience of a personalized offering is much better. I guess “better” is too subjective; instead, I’ll say that a personalized experience is much more efficient. Because it is. Amazon knows every intimate detail about me - when I had kids, how long I’ve been married, which extracurriculars I partake in - and I’m okay with it, because Amazon serves me relevant suggestions all damn day. And I like that.

Ultimately, it’s a personal choice for your customers. You should always offer them the opportunity to opt out of personal data usage (which is the law in a lot of states anyhow), and you should work with a reputable eComm partner that is transparent about how they use customer data and who that data belongs to (hint - they should use it to enrich recommendations and the customer data should belong to you, the retailer).

🤸‍♀️ The Balancing Act

In our work with personalization at Jane, we have identified an interesting problem: if we tailor each menu load to the individual, and show them exactly what they “want,” with incredibly high conversion rate metrics - what are we doing to product discovery?

The last thing we want to do is limit the entry of new brands in the space by creating a repetitive feedback loop of transactions. In order to avoid that, we are testing to identify a sweet spot: the degree of personalization that encourages maximum conversion while not inhibiting product discovery.

We’re getting pretty close.

📚 tl: dr

• Personalization is when an online retailer tries to guess what delights you most based on your behavior. If you’re more delighted, you’ll purchase more products, more often

• eComm personalization should replicate the behavior of a good budtender - collect important info, make recommendations, answer questions

• A good personalization engine is great for conversion, cross-sell / up-sell, and return purchases

• It is important not to over-personalize, so as to avoid inhibiting new product discovery

• It is Wednesday