Why Do Product Recommendations (Even) Matter?

5 min read
May 26, 2022 9:00:00 AM

Product recommendations are becoming an increasingly vital component of the e-commerce experience, with over 70% of online retailers now offering them on their websites. Just how important is it to align product recommendations with each shopper on a 1-to-1 level? In short: very. But don’t just take our word for it — the experts at Granify have compiled a few eye-opening insights into how recommendations can positively (or negatively) impact the online shopping experience. 

What Are Product Recommendations?

error, man shruggingBefore we dive into why product recommendations matter, it’s important to understand what Product Recommendations actually are. 

At their core, personalized product recommendations are items that are suggested to a shopper based on a combination of their shopping history and digital body language. These recommendations can be influenced by a variety of factors, including if they’re a new or anonymous visitor, a known shopper, or a returning customer. 

When your recommendation system decides what products to showcase, it should take into account:

  • the shopper’s previous browsing history (if any), and;

  • current session information, such as the product categories the shopper is currently browsing. 

Product recommendation engines (like Granify’s) are often powered by machine learning or artificial intelligence. As a result, these engines are always improving so that they can provide the best real-time suggestions for each shopper.

Recommendations can be showcased on any page of an e-commerce website, at any time. This could include personalized homepages, additional recommendations on the shopping cart page, or even page-agnostic pop-ups throughout the shopping experience. 

While this may sound like a lot of work to highlight an item or two, research shows that personalization has a $20 return on investment for every $1 spent. That’s an ROI of 2,000%!

What Are the Benefits of Product Recommendations?

Product recommendations aren’t just a tool to highlight new or previously unseen products. Ultimately, they increase brand trust between the company and the shopper, and aim to provide a more delightful customer experience. In fact, 45% of online shoppers are more likely to shop on a site that offers personalized recommendations. According to Salesforce, shoppers that engage with a product recommendation are nearly twice as likely to come back to the site (even if they didn’t make a purchase in that session).

Breaking it down into dollars and cents, sites where product recommendation engines have been implemented can see an increase of up to 31% of e-commerce revenue. A study done by Barilliance determined that Average Order Value (AOV) increases by 369% when a shopper engages with even one recommendation. That’s a tremendous jump in sales that would have otherwise been a missed opportunity.

Aside from raising the value of each purchase, product recommendations also increase the number of purchases made (an e-commerce site’s conversion rate). The folks at Salesforce found that shoppers who clicked on product recommendations were 4.5x more likely to add items to their cart and also 4.5x more likely to complete their purchase.

What Could Product Recommendations Look Like on My Site?

As we mentioned previously, there are many ways product recommendations can be integrated into your site for a seamless shopping experience. In addition to showing up on the different pages or sections of your site, they can also appeal to various shopper intents. Some examples of product recommendations include: 

Product Discovery - We think you'll love thisProduct Discovery

These are some of the most common recommendations shoppers will come across, and are perfect for highlighting new products the shopper hasn’t seen yet, based on their existing shopping patterns. 

Social Proof

Social Proof - Top Rated Product

Showcasing that a product is loved by other shoppers is a great way to appease shopper concerns. This is easily communicated by highlighting product ratings or flagging how popular the item currently is.

Frequently Bought Together (Complementary)

Complementary - We think you'll love these tooTechnically, highlighting items that are frequently purchased together is a type of social proof, but we wanted to present it separately because it’s another popular product recommendation you’re likely familiar with. Complementary products are commonly seen on the bottom of product pages or cart checkout pages (Amazon features these all the time), but can easily appear in many other places across e-commerce sites. 

Substitution

Top Rated Alternatives Result

If an online item is out of stock, being able to suggest other items to buy often helps turn the shopper experience around. The shopper gets a chance to explore alternatives and find something else that they might love, and the retailer gets the chance to not only provide a delightful customer experience, but ultimately to make a sale.

Post-Site Visit Recommendations

Additional personalization tactics retailers use include:

  • Triggering emails through an email marketing platform 
  • Personalized newsletters based on categories browsed
  • Serving retargeting display ads or social ads highlighting relevant products 

These are only a few of the numerous recommendation-based tactics an e-commerce retailer can utilize that will enhance shopper engagement, get more items in shoppers’ carts, and increase overall sales.

In Closing

As personalized Product Recommendations on e-commerce sites continue to trend from ‘value add’ to ‘expected service’ for retail shoppers, the ROI of providing a tailored shopping experience will only continue to grow. No matter the goals you have for your e-commerce site or mobile app, personalized product recommendations can be an effective way to meet them. Product recommendations can help decrease cart abandonment rates, increase returning visitors, and make those purchases you depend on to keep your business thriving.


Increase Your Sales with Product Recommendations

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Granify can help you identify and address your e-commerce pain points, and work with you to discover and implement online retail strategies that will engage your customers while increasing sales. 

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