Implementing Personalized Product Recommendations: A Case Study on Power Finland

https://drive.google.com/open?id=1EYtLztVcDLfMOh_VkchsuV0xEec_ovpQ&usp=drive_fs

Over the last decade, online shopping has grown in popularity among consumers due to its convenience and efficiency and has made the development of e-commerce an indispensable part of companies’ business strategies. It also provides businesses with new ways to address their target audience, such as personalization. While the field of marketing research has long recognized the advantages of personalized content in advertising and commerce, there are a plethora of additional variables to consider when personalization is integrated into digital platforms. There exist public apprehensions on the topic and experts have raised words of caution indicating that the implementation of automated personalization in a digital context needs careful consideration of additional variables and potential threats. The purpose of this thesis is to comprehensively map the opportunities and threats related to the implementation of personalization and to determine whether the introduction of a web store personalization feature significantly affects Power Finland's key performance indicators. The study examines personalization in the context of ecommerce by first exploring practical concepts related to its implementation. The literature review then proceeds to the interaction between the consumer and the company, as well as the consumer's cognition in the digital environment. The theoretical background also includes three case studies that illustrate the implementation of personalization in three companies operating in the same industry. To answer the research questions, a SWOT analysis based on the data and an A/B test comparing Power's existing product recommendation carousel to a personalized carousel were conducted. The A/B test did not provide statistically significant results regarding the effectiveness of personalization in the product recommendation carousel. However, the observations made in the SWOT analysis showed that personalization is compatible with Power's business strategy. The SWOT analysis highlighted in particular the positive impact of MyPower and personalization on each other and the possibility of creating more comprehensive customer relationships through the development of personalization.