How to Grow Customer Stickiness With Product Recommendations
A recent study from Infosys, Rethinking Retail, examined shoppers' rising expectations for a personalized, consistent brand interaction and retailers' attempt at providing an omnichannel, integrated shopping experience. One of the astonishing findings was that nearly a fifth of the consumers had never experienced a personalized promotion based on a previous purchase. Perhaps that was because a comparable proportion of merchants surveyed weren't making any attempts at offering one!
Should you go all out to personalize your customers' interactions and transactions with you? Let's find out.
Why Product Recommendations?
Product discovery is an important component of the online shopping experience. Consumers warm to a site that offers them personalized and handpicked recommendations over one that doesn't. Consider the stats revealed in this infographic from Invesp:
Explosive Visibility for Your Product Catalog
Many online stores have no dearth of distinctive items. Their basic problem is actually the exact opposite; because they have such a large inventory of products, showcasing every one of them and doing them all equal justice becomes a huge challenge.
The solution? A product recommendation engine helps an e-commerce business promote its entire inventory while being ultra-relevant to the visitor on its site. These engines combine user data, inventory data and business rules to create a personalized experience for each visitor in real time.
To put it very simply, product recommendations are created using the following:
- user information by analyzing behavioral data previously stored by the site and showing the visitor items that users with similar profiles purchased or bookmarked; and
- product information by crawling the site's catalog and showing items that are similar to what the user is currently browsing or searching for.
Exponential Conversion Rate
Besides showcasing your best-sellers, product recommendations have immediate payoffs. By showcasing items that are similar to or complementary to the items that a user is currently browsing, you widen the consideration set and increase the chances that at least one of the items will be liked by the user and added to their cart.
In other words, you're offering consumers the luxury of choice and getting in return the gift of higher conversions. An online personalization study by Barilliance showed that customers who click on product recommendations convert 5.5 times more than those who do not.
Easy Incremental Revenue
Not only do product recommendations improve conversion rates for items that a user was actually seeking out, they also help trigger impulse buys and add a tidy buffer to your margins through top-up or impulse purchases.
The Infosys study found that over 90 percent of consumers admitted to giving in to impulse buys when shopping online, which means nearly ALL your customers are candidates for a spur-of-the-moment purchase, if only given the right options.
Product recommendations tap into this low-hanging fruit of impulse purchases just the way a well-stocked checkout counter at your local supermarket makes those easy extra dollars (who among us hasn't picked up a pack of gum or fancy potato chips as they wait in queue at the cash register?).
Minimal Effort, Higher Loyalty From Buyers
Make it easy and users will love it. Google's simple yet user-friendly search experience or Apple's legendary focus on making its products as easy to use as possible are both reflections of this fundamental business principle that has led both brands to domination in their core markets.
Product recommendations make an online shopper's life easier by showing them up-front products that they would like to buy based on their past purchase behavior, profile information or even browsing patterns from their last visit. By removing the "cost of thinking" or digging through multiple pages on your site, you vastly improve the visitor's user experience, earning brownie points in the process.
The infographic by Invesp Consulting referred to above also reveals that 56 percent of online shoppers are more likely to return to a site that recommends products.
Rohan Ayyar is the regional marketing manager for India at SEMrush. His blog, The Marketing Mashup, covers digital marketing from the perspective of B2B, B2C, lead generation, mobile marketing, SEO, social media, content marketing, database marketing including predictive analytics, and conversion rate optimization. In addition, he'll look at emerging marketing technology and how marketers can use it. Reach Ayyar at email@example.com.