Getting personalization right means 40% more revenue, McKinsey found. For top ecommerce companies and budding online 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 an exceptional customer experience to your customers. Not only does it help build brand loyalty and increase ecommerce sales, 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 that increases ecommerce conversion is through ecommerce 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 email messages 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 from various email marketing campaigns, and it’s easy for your personalized email messages to get lost in the sea of other emails. This is where automated personalized videos come in, by combining the best AI video generator and an AI marketing automation tool.
Introduction to Automated Personalized Videos
Automated personalized videos are videos customized for each individual customer. These ecommerce video clips are created using data such as the customer’s name, location, purchase history, and browsing behavior. Once obtained from the video AI generator, they are delivered to the customer through email, SMS, or on-site, with the help of an AI marketing automation tool.
Automated personalized videos can be used at various stages of the ecommerce customer journey such as welcome series email examples at the start, later product videos, proven winback email examples for abandoned carts, post-purchase videos and overall customer service videos covering different topics. 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. Benefits of personalization in ecommerce video form include increased 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, improving ecommerce CRO results by making them more likely to take action.
Secondly, personalized videos help build brand loyalty. When customers receive personalized videos, say within a personalized email, they feel even more valued and understood. This level of ecommerce optimization creates a positive emotional connection with the brand, which leads to increased loyalty and repeat purchases, since an ecommerce video is more realistic and stimulating.
Thirdly, personalized videos help reduce customer churn. Customers who have a positive experience are less likely to switch to a competitor. Taking ecommerce video a step further by making personalized videos can 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 video AI generator’s 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, especially those pursuing ecommerce personalization. They allow businesses to create personalized videos at scale, without the need for a human editor. This means that both top ecommerce companies and small businesses can create thousands of personalized videos in a matter of minutes.
AI-generated videos also offer a higher degree of ecommerce 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 AI personalization helps create a more engaging and memorable experience for customers, especially when blended with proven email automation examples.
The Role of Video Personalization in Ecommerce
Video personalization plays a crucial role in ecommerce. Ecommerce video clips from the best AI video generator tools provide an exceptional customer experience, which drives customer lifetime value. It also helps increase engagement and the conversion optimization rate, build brand loyalty, and reduce customer churn.
Video personalization can be used at various stages of the ecommerce customer journey such as welcome videos, product videos, abandoned cart videos, post-purchase videos and general customer service 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 ecommerce video clips 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. In the case of ecommerce video, the clips 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 and conversion rate optimization companies. 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 and compete with top ecommerce companies.
Case Studies of Ecommerce Businesses Using AI-Generated Videos
AI-generated videos can be used to showcase products tailored to the customer’s needs, which helps increase engagement and support other ecommerce CRO efforts, ultimately improving 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. Their ecommerce video messages 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 a video AI generator tool to promote its sustainability efforts by highlighting eco-friendly clothing options in the videos produced.
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, which is gathered from various stages and touchpoints along the ecommerce customer journey.
Sephora's AI-generated videos focus on providing personalized makeup tutorials for each customer. Their AI personalization tools 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. These ecommerce video pieces 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 video AI generator and AI personalization engine analyze the customer's fitness level, workout preferences, and location to provide tailored recommendations in ecommerce video form. 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 ecommerce video to achieve? Do you want to increase engagement, conversion rates, or brand loyalty? Once you have a clear objective, you can create an ecommerce video tailored to achieve it. This makes it easier to harmonize the video with ecommerce email subject lines and other marketing campaign elements.
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 an ecommerce video that is relevant to the customer.
3. Keep it short and sweet
Personalized videos should be short and sweet. Keep the ecommerce 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. You can also rely on email A/B testing to gauge which version of your video performs better in terms of CTA follow-through from viewers.
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 ecommerce video feel more personalized and engaging. Shuffling through multiple ecommerce AB testing ideas can help a lot here.
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 within the ecommerce video and easy to follow. It can also help when tracking email marketing KPIs since you have specific actions to focus on.
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 using the best AI tools to measure the success of personalized videos:
- Engagement rate
Engagement rate measures how many people watched the ecommerce 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 ecommerce 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 for ecommerce measures how many people who watched the ecommerce video made a purchase. This metric can help you understand how effective your personalized videos are at driving sales and revenue, and how they impact your broader ecommerce CRO plan regarding return on investment.
To calculate conversion rate, divide the number of people who made a purchase by the total number of people who watched the ecommerce 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, and to some extent, the additional effort needed in complementary tools such as AI marketing automation for distributing the videos.
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, and how much more support the videos need from other ecommerce CRO efforts.
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 (e.g. the video AI generator subscription), 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
The best ecommerce video platform integrates seamlessly with the best ecommerce platform, which is what you should go for. 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, while incorporating other AI personalization and AI marketing tools.
- 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, eventually propelling you into the top ecommerce companies.
- Analytics
Make sure the ecommerce 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 best AI platforms for ecommerce video should offer reliable video hosting and fast delivery speeds to ensure that your personalized videos are delivered to customers quickly and without interruption. Whether you choose Maverick, Sendspark, Tavus, Hippo video, BHuman ai or some other platform/platform combination, it all comes down to the extra e-commerce optimization functionality you find necessary to have alongside the actual video hosting capabilities.
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!
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