Product recommendations are a proven way of increasing revenue, conversion rates, and average order values. It's not uncommon for online retailers to report that between 2--5% of total website revenue can be attributed to product recommendations. Powerhouses like Amazon have indicated that between 20--35% of their total product sales result from product recommendations.
Amazon pioneered personalized, automated, real-time, "item-to-item collaborative filtering" way back in 2000 and they've continued to fine-tune the algorithms that identify and recommend contextually relevant suggestions to millions of individual shoppers.
Thanks to technology
, your business doesn't have to be a behemoth like Amazon to implement a product recommendation strategy that can supercharge your online sales. Let's take a look at three ways you can improve your product recommendation strategy to increase conversion rates and average order value.
Product Recommendation Strategies:
- Use what you know — Leverage relevant details about customer purchase history to recommend products and brands that a shopper has an affinity for. Also, incorporate real-time shopping behavior to offer personalized recommendations and make it easy for them to navigate to items they've browsed during their session. Advanced data science and technology make it possible for marketers to also add contextual data outside of a visitor's activity on a website. Now it's also possible to personalize the digital experience by with data from in-store behavior, geographic location, and device usage...just to name a few.
- Add a human touch — Technology is great, but you don't want to rely solely on the product recommendation engine to create the customer experience. Automated product recommendations are a natural extension of a merchandiser's took kit, but it's important to incorporate internal knowledge as a part of the automated process. No matter how good the technology is, the algorithm doesn't know when you're introducing a new product line and it can't factor in margin or other business metrics without a human touch.
- Crowdsource — Tap into the collective behavior of your visitors to expose products that are "similar" to the product(s) being viewed by the shopper. Display recommendations that "complete the purchase." In other words, make it easy for your customer to buy the whole outfit or the matching accessories. Use the product detail page to feature "Visitors who viewed this product also viewed..." to help your shoppers during the research phase of the shopping journey.
It's worth noting that "Visitors who viewed this product also viewed..." recommendations generate the most revenue, according to a study by MarketingSherpa. So if you have limited resources, make this one your top priority.
Stay tuned for more product recommendation and merchandising tips.