Getting personalization right means 40% more revenue, McKinsey found. For ecommerce brands this is crucial to get right. But it's hard to do it well and at scale.
As an ecommerce business owner, you know how important it is to provide exceptional customer experience to your customers. Not only does it help build brand loyalty, but it also drives customer lifetime value (LTV).
In fact, according to a study by Harvard Business Review, customers who have the best experiences spend 140% more than those who have the poorest experiences. One way to provide an exceptional customer experience is through personalization.
Email Personalization and Its Impact on Customer Experience
Email personalization has been around for a while, and it’s a great way to provide a customized experience to your customers. According to a study by Experian, personalized emails have a 29% higher open rate and 41% higher click-through rate compared to non-personalized emails. This is because personalized emails make customers feel valued and understood.
However, email personalization can only go so far. Customers are bombarded with emails every day, and it’s easy for your emails to get lost in the sea of other emails. This is where automated personalized videos come in.
Introduction to Automated Personalized Videos
Automated personalized videos are videos that are customized for each individual customer. These videos are created using data such as the customer’s name, location, purchase history, and browsing behavior. The videos are then delivered to the customer through email, SMS, or on-site.
Automated personalized videos can be used at various stages of the customer journey such as welcome videos, product videos, abandoned cart videos, and post-purchase videos. These videos provide a more engaging and memorable experience for customers compared to traditional text-based emails.
Understanding the Benefits of Personalized Videos
Personalized videos offer several benefits for ecommerce businesses. Firstly, they help increase engagement and conversion rates. According to a study by Vidyard, personalized videos have a 16x higher conversion rate compared to non-personalized videos. This is because personalized videos capture the customer’s attention and make them more likely to take action.
Secondly, personalized videos help build brand loyalty. When customers receive personalized videos, they feel valued and understood. This creates a positive emotional connection with the brand, which leads to increased loyalty and repeat purchases.
Thirdly, personalized videos help reduce customer churn. Customers who have a positive experience are less likely to switch to a competitor. Personalized videos help provide a positive experience, which reduces the likelihood of customers churning.
AI-Generated Videos and Their Impact on Ecommerce
AI-generated videos are videos that are created using artificial intelligence. These videos are created by training a machine learning algorithm on a dataset of images and videos. The algorithm then generates new videos based on the patterns it has learned.
AI-generated videos are a game-changer for ecommerce businesses. They allow businesses to create personalized videos at scale, without the need for a human editor. This means that businesses can create thousands of personalized videos in a matter of minutes.
AI-generated videos also offer a higher degree of personalization compared to traditional videos. They can be customized based on the customer’s location, browsing behavior, purchase history, and other data points. This level of personalization helps create a more engaging and memorable experience for customers.
The Role of Video Personalization in Ecommerce
Video personalization plays a crucial role in ecommerce. It helps provide an exceptional customer experience, which drives customer lifetime value. It also helps increase engagement and conversion rates, build brand loyalty, and reduce customer churn.
Video personalization can be used at various stages of the customer journey such as welcome videos, product videos, abandoned cart videos, and post-purchase videos. Each of these videos serves a specific purpose and helps provide a customized experience to the customer.
Generative AI and How It Is Used in Personalized Videos
Generative AI is a type of artificial intelligence that is used to create new content based on a set of parameters. This technology is used in personalized videos to create unique videos for each individual customer.
Generative AI works by training a machine learning algorithm on a dataset of images and videos. The algorithm then generates new videos based on the patterns it has learned. The videos are customized based on the customer’s data such as name, location, purchase history, and browsing behavior.
Generative AI is a game-changer for ecommerce businesses. It allows businesses to create personalized videos at scale, without the need for a human editor. This means that businesses can create thousands of personalized videos in a matter of minutes.
Case Studies of Ecommerce Businesses Using AI-Generated Videos
AI-generated videos can be used to showcase products that are tailored to the customer’s needs, which helps increase engagement and conversion rates. Several ecommerce businesses have already started using them to provide a personalized experience to their customers. Let’s take a look at some case studies:
1. ASOS
ASOS is a popular online fashion retailer that uses AI-generated videos to provide a more engaging and personalized experience to its customers. The videos are created using data such as the customer’s browsing history, purchase history, and location.
For example, if a customer frequently purchases formal wear, the videos may showcase suits and dresses that match their style. ASOS also uses the videos to promote its sustainability efforts by highlighting eco-friendly clothing options.
2. Sephora
Sephora is a beauty retailer that uses AI-generated videos to provide a personalized experience to its customers. The videos are created using data such as the customer’s skin tone, hair color, and makeup preferences.
Sephora's AI-generated videos focus on providing personalized makeup tutorials for each customer. The videos analyze the customer's skin tone, face shape, and makeup preferences to provide tailored recommendations. Sephora also uses the videos to showcase its products and highlight new releases.
3. Nike
Nike is a sportswear retailer that uses AI-generated videos to provide a personalized experience to its customers. The videos are created using data such as the customer’s fitness level, workout preferences, and location.
Nike's AI-generated videos focus on providing personalized workout recommendations for each customer. The videos analyze the customer's fitness level, workout preferences, and location to provide tailored recommendations. Nike also uses the videos to showcase its latest products and highlight its sponsorship of high-profile athletes.
Best Practices for Creating Personalized Videos
Creating personalized videos can be daunting, but it doesn’t have to be. Here are some best practices for creating personalized videos:
1. Start with a clear objective
Before creating a personalized video, start by defining your objective. What do you want the video to achieve? Do you want to increase engagement, conversion rates, or brand loyalty? Once you have a clear objective, you can create a video that is tailored to achieve it.
2. Use the right data
Personalized videos are only effective if they are based on the right data. Use data such as the customer’s name, location, purchase history, and browsing behavior to create a video that is relevant to the customer.
3. Keep it short and sweet
Personalized videos should be short and sweet. Keep the video under two minutes and focus on the key message. This will help keep the customer engaged and increase the likelihood of them taking action.
4. Use conversational language
When creating a personalized video, use conversational language that is easy to understand. Avoid using technical jargon or language that might confuse the viewer. This will help to make the video feel more personalized and engaging.
5. Include a clear call-to-action
Every personalized video should have a clear call-to-action (CTA) that encourages the viewer to take the desired action. Whether it's making a purchase, signing up for a newsletter, or visiting a website, the CTA should be prominent and easy to follow.
How to Measure the Success of Personalized Videos
While personalized videos can be a powerful tool for ecommerce stores, it's important to measure their success to understand their impact on your business. Here are some metrics to track when measuring the success of personalized videos:
- Engagement rate
Engagement rate measures how many people watched the video and took some form of action such as clicking on a link or making a purchase. This metric can help you understand how well your personalized videos are resonating with your audience.
To calculate engagement rate, divide the number of people who engaged with the video (clicked on a link, made a purchase, etc.) by the total number of people who watched the video and multiply by 100 to get a percentage. For example, if 1,000 people watched a personalized video and 100 people clicked on a link or made a purchase, the engagement rate would be 10% (100/1000 x 100).
- Conversion rate
Conversion rate measures how many people who watched the video made a purchase. This metric can help you understand how effective your personalized videos are at driving sales and revenue.
To calculate conversion rate, divide the number of people who made a purchase by the total number of people who watched the video and multiply by 100 to get a percentage. For example, if 1,000 people watched a personalized video and 50 people made a purchase, the conversion rate would be 5% (50/1000 x 100).
- Customer lifetime value (LTV)
Customer LTV measures the total amount of money a customer spends with your business over their lifetime. This metric can help you understand the long-term impact of your personalized videos on your revenue.
To calculate LTV, multiply the average order value by the average number of purchases per customer per year by the average customer lifespan in years. For example, if the average order value is $50, the average number of purchases per customer per year is 3, and the average customer lifespan is 5 years, the LTV would be $750 ($50 x 3 x 5).
- Average order value (AOV)
Average order value measures the average amount of money spent by customers per order. By tracking the AOV of customers who watched personalized videos, you can determine if personalized videos are effective at increasing the size of customer orders.
To calculate AOV, divide the total revenue generated by the total number of orders. For example, if a personalized video generated $10,000 in revenue from 200 orders, the AOV would be $50 ($10,000/200).
- Return on investment (ROI)
Return on investment measures the financial return on a particular investment, such as personalized videos. By comparing the revenue generated from personalized videos to the cost of producing them, you can determine the ROI of personalized videos and whether they are a worthwhile investment for your ecommerce store.
To calculate ROI, divide the revenue generated by personalized videos by the cost of producing them and multiply by 100 to get a percentage. For example, if personalized videos generated $50,000 in revenue and the cost to produce them was $10,000, the ROI would be 400% (($50,000 - $10,000)/$10,000 x 100).
Choosing the Right Ecommerce Video Platform
Choosing the right ecommerce video platform is crucial to the success of your personalized videos. Here are some factors to consider when choosing an ecommerce video platform:
- Integration with your ecommerce platform
Make sure the video platform integrates seamlessly with your ecommerce platform. This will make it easier to create and deliver personalized videos to your customers. An integrated platform can also help you track the success of your personalized videos more effectively.
- Customization options
Make sure the video platform offers customization options such as adding your own branding and messaging. This will help you create personalized videos that align with your brand identity and messaging.
- Analytics
Make sure the video platform offers analytics so you can track the success of your personalized videos. Analytics can help you understand how your personalized videos are performing and identify areas for improvement.
4. Video hosting and delivery
Consider the platform's video hosting and delivery capabilities. The platform should offer reliable video hosting and fast delivery speeds to ensure that your personalized videos are delivered to customers quickly and without interruption.
5. Support for AI-generated videos
Consider whether the ecommerce video platform offers support for AI-generated videos. AI-generated videos can be an effective way to scale personalized video production and deliver more targeted and relevant content to customers.
In Summary
Automated personalized videos are a game-changer for ecommerce businesses. They provide a more engaging and personalized experience for customers, which drives customer lifetime value. By using AI-generated videos, businesses can create personalized videos at scale, without having to hire a human editor. To get started with personalized videos, follow the best practices outlined in this article, and choose the right ecommerce video platform.
Maverick uses AI-generated video to help ecommerce stores have personalized interactions with each of their customers across their journey. Start boosting your customers’ lifetime value (LTV) today with personal videos at scale!
