Product recommendations and featured products can be a very effective component of an online shopping portal. Highlighting items for shoppers visiting your site and using their shopping history to pass along other products they may like is an excellent way to boost sales and increase customer retention. But as a new survey indicates, many retailers are not using this feature to its full potential.
ChoiceStream, a product recommendations specialist and display ad provider, just released the results of its 2009 Personalization Survey. The company polled nearly 600 adult web users, nearly all of whom had made an online purchase in the past six months
In this pool of experienced online shoppers, 59 percent of the respondents reported getting poor quality product recommendations last year, up from 45 percent in 2008. Similarly, only 17 percent of those polled rated retailers’ product recommendations as excellent.
The overwhelming unhappiness on the part of the survey participants regarding their experience with retailers’ product recommendations came down to the fact that they were receiving recommendations unrelated to what they were shopping for or for products that did not match their preferences. Others in the survey, almost 45 percent actually, were unhappy because they got recommendations from products they already own.
Lori Trahan, ChoiceStream’s vice president of marketing, summed it up pretty well. “Consumers expect more from recommendations than they did even a year ago,” she said. “They expect them to be accurate and on target, so when they’re not, shoppers are disappointed.”
While product recommendation sections on retail websites are far from a perfect science, it’s pretty telling that this group of shoppers had the issues that they did. What really strikes us as odd is the figure indicating that retailers are recommending products that a consumer already owns. It’s possible that consumer might have actually purchased the product on the same site now giving them the recommendation, which reeks of sloppy data mining and organization on the part of that merchant.
And that’s what it all comes down to. If you’re going to offer shoppers recommendations on products and product categories, you need to have good customer data. The more information you collect on your customers, the easier it is to provide them with ideas for products that they will actually find useful. Shopping history, preferred brands, and average spending per transaction are just some of the things you should take into account when you’re crafting information for product recommendations.
You can also try offering questionnaires or surveys to your regular customers (albeit with some incentive for them, like discount on their next purchase or free shipping) to pull together important data. The bottom line is that product recommendations can be a useful offering for retailers and a big hit with consumers if the merchant goes about them in the right way.
We want to hear from you. As a consumer, what do you think about the product recommendations you find on retail sites? And merchants, what is your process and level of success with offering them? Leave us a comment below!
