Data isn’t free.  Gathering information on customers and shoppers has a real price.  Back in the good old days of brick and mortar, you could predict the level of customer experience based on the address of the physical store (rent), the quality of their sales people (salaries) and the goods that they carried (inventory). You could also predict that their prices might be higher – a good old fashioned quid pro quo.  In the world of ecommerce this basic equation hasn’t really changed. True personalization of the online shopping experience has a real cost to buyer and seller alike.

The typical inputs for a personalization system include behavioral signals such as click path, search terms and dwell times.  There are environmental factors like location, device used and time of day.  There are also demographic and community inputs such as derived from Pinterest or Facebook too.  While clicking around on the web feels like it’s free, the exchange of this data really isn’t.

In every case, the shopper gives up some amount of privacy in exchange for some amount of personalization.  Such as, if I take the 25% offer, will I forever be barraged with emails from this vendor? The retailer on the other side has a lot to think about in this exchange.  Which piece of data provides the most relevant information about my shopper?  Is it behavioral signals or the social community input?  How valuable is that information in predicting where that shopper will go next or whether they will bounce from my site?  If I set my personalization system up to track a particular input, does that input cover a large enough sample of my shoppers to reliably predict behavior? Finally, what hardware, software and talent costs will I incur in order to actually capture, track and use the data?

So the more things change, the more they fundamentally stay the same.  The trick is in finding the sweet spot: Capturing the right data, from the right people at the right price so that you can offer a better online shopping experience at the right time. When this happens retailers see engagement, order values and conversions all improve. Shoppers come away from their interaction more satisfied, more likely to return and with a higher level of trust.   And ultimately, trust is what the long term customer relationship is really about.