How to Introduce Product Recommendations in Your Business

The Basics: What is the Recommendation Engine?

Do you recognize these prompts: “Bestsellers”, “Top Picks for You”, “Often Bought Together”?

The products displayed in these boxes are provided to you by the site’s recommendation engine – a sophisticated software system designed to predict and suggest products or services to users based on their preferences and behaviors.

These engines use advanced algorithms and data analysis to process vast amounts of user data and create personalized shopping experiences.

E-commerce companies use recommendation engines to improve customer satisfaction and increase sales by presenting relevant products at the right time.

For example, if you’re shopping online and see a section titled “Customers who bought this item also bought”, you’re seeing a recommendation engine in action.

By suggesting items tailored to your tastes, these engines not only increase the likelihood of purchase, but also improve user engagement and retention.

Leading e-commerce giants like Amazon and Netflix have mastered the use of recommendation engines.

Amazon recommendation system analyzes browsing history, purchase patterns, and even product reviews to suggest products that match individual preferences.

This personalized approach not only increases sales, but also builds customer loyalty by making the shopping experience seamless and intuitive.

Why it Matters: How Do Personalized Recommendations Drive Sales?

Virtually all major players in the e-commerce market use personalized product recommendations engine in one form or another.

So it’s safe to assume that they must have a pretty significant impact on sales.

And they do. But to what extent do they drive revenue for these companies?

For example, Amazon’s recommendation algorithm, which analyzes user behavior in real time, is responsible for a staggering 35% of its total sales. The system, which uses item-to-item collaborative filtering, uniquely tailors the online store experience for each customer, presenting them with products based on their browsing and purchasing history.

According to Mailchimp, returning customers who engaged with personalized recommendations were 55% more likely to make a purchase during that session, demonstrating a significant impact on customer retention. For new customers, that likelihood increased to 70%.

This data underscores the critical role of personalization in retaining existing customers and converting new ones.

In addition, personalized recommendations can significantly reduce shopping cart abandonment rates.

With the average cart abandonment rate hovering just over 70%, personalized product suggestions based on client purchase history can address specific reasons for abandonment, such as unexpected costs or a lack of trust.

Finally, personalized recommendations significantly increase average order value (AOV).

Sessions that include engagement with personalized recommendations see an increase in AOV of up to 369%. By presenting relevant cross-sell and up-sell opportunities, such as suggesting complementary products at checkout, businesses can significantly increase total cart value.

Do you want to unlock the same benefits for your e-commerce business?

Empower Your Business With AI-Driven Recommendation Engine Today!

Introducing Recommendation Engine in Your Business: Key Considerations

When considering adding a personalized product recommendation engine to your e-commerce store, there are several key factors to consider.

One of the first decisions you’ll have to make is whether to go with an out-of-the-box solution, an add-on to your existing platform, or a custom software solution tailored to your business needs.

Out-of-the-box solutions and add-ons are attractive because of their ease of implementation and lower initial cost.

These solutions often come with pre-configured settings and integrations that allow you to quickly set up and start using personalized recommendations.

They are ideal for smaller companies or those new to personalization because they require minimal technical expertise. However, they may lack the flexibility and scalability needed to fully meet your growing business needs.

Custom software solutions offer a level of customization and flexibility that out-of-the-box solutions cannot match.

While the initial investment is higher and the development process more complex, the long-term benefits are substantial.

Custom solutions allow you to design and implement algorithms that are specific to your business model and customer behavior. This can result in more accurate and effective recommendations, leading to higher conversion rates, increased customer satisfaction, and improved customer retention.

In addition, customized solutions can scale and adapt as your business evolves, ensuring that they continue to meet your needs over time.

But designing, developing, integrating, and deploying a custom product recommendation system is no small feat.

It requires a significant amount of knowledge and experience. It requires an understanding of complex algorithms, machine learning techniques, and data science principles.

That’s why it’s best to leave it to experts like Stratoflow.

Custom Product Recommendation Engine: Strategic Advantage For Your Business

At Stratoflow, we are dedicated to delivering innovative and tailored technological solutions that drive significant business results.

With over 10 years of commercial experience, we believe in the power of personalized experiences and leverage cutting-edge AI and machine learning technologies to bring our clients’ visions to life.

We have demonstrated our expertise in building custom recommendation engines through the creation of Recostream, a cutting-edge AI/ML-powered recommendation engine based on customer preferences.

The mission was simple – craft an advanced product recommendations engine accessible to e-commerce sites and content platforms of any size.

Our approach involved researching and enhancing multiple AI/ML-driven recommendation models.

The integration method was designed to be user-friendly, allowing non-technical users to integrate the system by simply adding a JavaScript line.

Additionally, we provided powerful dashboard capabilities with complete integrations with Google Analytics and Google Optimize, enabling clients to validate the system’s impact on their store’s metrics without needing development resources

The results speak for themselves.

Recostream has increased sales for e-commerce stores by 5-10% and improved conversion rates for recommended products by 25%.

The system’s real-time performance ensures a smooth and responsive user experience, with recommendations calculated in as little as 20-30 milliseconds.

This seamless integration and its tangible benefits led to the company’s acquisition by GetResponse in 2022.

At Stratoflow, we excel at building recommendation engines not only for e-commerce, but also for a variety of other industries.

Our solutions improve the user experience, increase purchase intent, simplify the customer journey and drive business growth. Here’s how different industries can benefit from our expertise:

• Ecommerce and Retail: Enhance user experience and drive sales by offering personalized product recommendations, making shopping convenient and enjoyable.
• Media and Entertainment: Increase user engagement and satisfaction with tailored content suggestions, keeping audiences hooked.
• Education: Boost student performance by providing customized learning pathways, ensuring each learner receives the support they need.
• Healthcare: Improve patient outcomes with personalized treatment plans, delivering precise and effective care.
• Online Advertising: Achieve higher conversion rates with personalized ads, targeting the right audience with the right message.
• Insurance: Offer custom financial advice and risk assessments, providing clients with personalized insurance solutions.
• Finance: Optimize investment advice and portfolio management, helping clients make informed financial decisions.
• Food Delivery: Enhance customer satisfaction with personalized menus and optimized delivery, ensuring timely and enjoyable dining experiences.
• Real Estate: Provide property recommendations and market analysis, helping clients find their ideal homes and investments.

Discover how our solutions can transform your industry with highly personalized experiences and drive growth.

Contact us today to discuss your custom recommendation engine needs and discover how we can help your business thrive with a next-generation personalization system.

Best Ways of Presenting Product Recommendations to Your Customers: Eight Tips from Experts

Fast data processing and effective presentation of product recommendations can significantly improve the user experience and drive sales.

At Stratoflow, we’ve gathered extensive insight and developed best practices for presenting product recommendations to maximize their impact.

Here we share our expertise on how to strategically present product recommendations to your customers.

Tip #1: Provide relevant recommendations on the product pages

One of the best places to show users product recommendations is on the product pages themselves. Product pages are where customers are most engaged and have the highest purchase intent. When users are looking at a specific product, they are often open to exploring additional items that complement their current selection or offer similar benefits.

Displaying relevant recommendations on product pages can significantly enhance the shopping experience by:

• Increasing Discoverability: Customers can discover related products they might not have searched for explicitly, increasing the chances of additional purchases.
• Boosting Cross-Selling Opportunities: Recommending complementary products, such as accessories or related items, can increase the average order value.
• Enhancing Customer Satisfaction: Providing relevant suggestions can make the shopping experience more personalized and enjoyable, leading to higher customer satisfaction and loyalty.

Best models to use here

• Similar Products: Suggest items that are similar in style, function, or category to the product being viewed. This helps users find alternatives and expand their choices.
• Other Customers Also Purchased: Display products that other customers commonly buy alongside the viewed item. This leverages social proof and encourages users to consider complementary products.
• Frequently Bought Together: Highlight items that are often purchased together with the current product. This not only increases the perceived value but also boosts the average order value through cross-selling.

Tip #2: Present customers with similar products

Presenting similar products to customers is a highly effective strategy that uses content-based filtering techniques.

This approach analyzes the attributes of products the customer has expressed interest in and suggests items with similar characteristics. It is particularly useful in scenarios where a customer has specific preferences or is looking for alternatives within a particular category.

In our experience at Stratoflow, we have seen significant success with this approach.

In one instance, a client’s online store specializing in electronic gadgets used content-based filtering to recommend similar smartphones to users looking at a specific model.

By analyzing features such as screen size, camera quality, and battery life, the recommendation engine suggested other smartphones with comparable specifications.

This strategy not only helped keep customers on the site longer, but also increased the likelihood of a purchase, as customers appreciated the tailored suggestions that met their specific needs.

Tip #3: Promote daily offers

Promoting daily deals through product recommendations is an incredibly effective way to harness the fear of missing out (FOMO), one of the most powerful tools in modern marketing.

FOMO drives customers to take immediate action to avoid missing out on a limited-time offer, increasing the urgency and likelihood of a purchase.

Product recommendations are an ideal way to highlight daily deals.

These product recommendations can be strategically placed on the home page of your site or as pop-up notifications for maximum visibility. By presenting limited-time offers in these high-traffic areas, you can capture customers’ attention as they enter your site or while they are actively browsing.

Tip #4: Show users what others are also buying

Showing what other users are buying is a powerful recommendation model that effectively drives cross-selling and leverages social proof.

This approach taps into the natural human tendency to follow the actions of others, building trust and encouraging purchases.

At Stratoflow, we implemented this recommendation model for a women’s apparel store.

By displaying items that other customers frequently purchased together, we were able to increase cross-selling opportunities and improve the overall customer experience.

For example, when a customer is looking at a dress, the recommendation system can display a section called “Customers Also Bought” with accessories, shoes, or other clothing items that complement the dress.

This not only introduces the customer to related products, but also increases the likelihood that they will add these items to their cart.

Tip #5: Integrate personalized pop-ups on the checkout page

Cross-selling and up-selling strategies can be further enhanced by integrating intelligent product recommendation pop-ups on the checkout page.

This strategic placement of recommendations ensures that customers are presented with complementary products at the final stage of the purchase process, significantly increasing the average order value.

Introducing personalized pop-ups during checkout is a powerful way to capture the customer’s attention when they are most ready to complete a purchase.

For example, if a customer is purchasing a laptop, a pop-up could suggest complementary items such as a laptop bag, external mouse, or software bundle.

These timely and relevant suggestions based on customer data make it convenient for customers to find and purchase everything they need in one go, improving their overall shopping experience and increasing your sales.

By integrating personalized pop-ups on the checkout page, you can effectively cross-sell and up-sell, resulting in higher average order values and a more satisfying customer experience.

Tip #6: Highlight your bestsellers

Recommending best-selling products to users is an effective strategy that leverages the popularity and proven success of these items.

Highlighting bestsellers using recommendation engine not only showcases the most popular products in your inventory, but also builds trust and encourages purchases by showing that these items are highly favored by other customers.

Benefits of Highlighting Bestsellers:

• Builds Trust and Credibility: Customers are more likely to trust and purchase products that are popular and have been widely bought by others. This social proof can significantly enhance their confidence in making a purchase.
• Increases Conversion Rates: Bestsellers have a proven track record of success, making them more likely to convert new customers. By recommending these products, you increase the chances of a sale.
• Optimizes Inventory Management: Promoting bestsellers helps ensure that popular items are continually moving, which can assist in better inventory management and stock turnover.

For one online toy store we worked with, integrating a bestsellers model proved highly effective.

We highlighted the most popular toys on the home page and product pages, using data-driven insights to ensure the recommendations were current and relevant.

This approach not only increased sales of these highlighted items, but also improved customer satisfaction by directing them to products that were highly rated and enjoyed by others.

[Read also: Online Shopping Recommendations – How to Introduce Them in Your Business?]

Tip #7: Recommend products based on reviews

Recommending products based on reviews is a powerful strategy that uses social proof to influence purchase decisions.

By displaying user ratings and reviews alongside product recommendations, you can highlight the popularity and quality of items, building trust and driving sales.

To implement this strategy effectively, display ratings (such as stars or numerical scores) and snippets of customer reviews next to recommended products.

For example, showing that a product has a 4.8/5 star rating or highlighting a few key positive comments can make a significant difference in influencing a customer’s decision.

In our experience, integrating review-based recommendations into various e-commerce platforms has consistently shown positive results.

Customers appreciate the additional information, and it helps them feel more confident about their purchases.

Tip #8: Integrate your recommendations with your store’s visual language

This is the last, but probably the most important tip of all.

Properly integrating product recommendations into your store’s visual language is critical to maintaining a seamless user experience. Poorly integrated recommendations can distract or even frustrate shoppers, ultimately detracting from the overall shopping experience.

That’s why, based on our extensive experience, we’ve compiled a list of 5 folder rules for smoothly integrating product recommendations into the page design like Netflix and Spotify has done in their pages.

Golden Rules of Presenting Product Recommendations

• Rule #1: Consistency with Visual Design: Ensure that the recommendation sections match the overall design of your website, including colors, fonts, and layout.
• Rule #2: Clear and Non-Intrusive Placement: Position recommendations where they are easily noticeable but do not obstruct the user’s browsing or purchasing process. Ideal spots include below product descriptions, sidebars, or in a dedicated section on the homepage.
• Rule #3: Use High-Quality Images: Visual appeal is critical in online shopping. Use high-resolution images for recommended products to ensure they look attractive and professional, encouraging users to consider them seriously.
• Rule #4: Incorporate Call-to-Action Buttons: Include clear and compelling call-to-action buttons like “Add to Cart” or “View Details” with each recommended product.
• Rule #5: Personalize the Recommendations: Tailor the recommendations based on individual user behavior and preferences. Personalized recommendations are more relevant and engaging, leading to higher conversion rates and improved user satisfaction.

[Read also: AI Recommendation Engine – How Artificial Intelligence is Transforming Modern Businesses]

Conclusion

Incorporating personalized product recommendations improves the user experience, increases sales, and builds customer loyalty.

By following our best practices and working with professional custom software development companies, you can create a dynamic shopping environment that delights customers and drives business growth.

Thank you for taking the time to read our blog post!