Personalized Recommendations : A Must-have Strategy for Online Success

Personalized Recommendations : A Must-have Strategy for Online Success

Personalized Recommendations : A Must-have Strategy for Online Success 1024 683 WC Lovers

Let’s admit to this – the world is almost replete with online marketplaces. And this has compelled online buyers to deal with the dilemma of choosing the best amongst them. Online marketplaces are struggling to stay in the competition, striving to stay ahead by providing something ‘more’ or something ‘better’ to the customer.  

But when it comes to how to bring in more customers to your online marketplace, providing better customer experience tops the list. And this is where the significance of personalized recommendations come into play.

Personalized recommendations have revolutionized the way people shop online and are loved by shoppers. Imagine having a personal shopping assistant who knows what you need or what would suit you and presenting them right in front of you! But then, you don’t have to imagine this as you probably are familiar with such experiences, thanks to marketplaces like Amazon.

However, they are more than just a tool to help shoppers on their shopping journey. The benefits of this strategy is undeniable for online marketplaces. But should you really bother about providing custom product recommendations for each of your customers? Let’s check out why this strategy is adopted by most of the marketplaces today and learn how to implement it the right way.


What are personalized recommendations?

Personalized recommendation is a marketing strategy that uses machine learning and collected data to analyze users’ shopping behavior in order to provide custom shopping suggestions to the buyers. These suggestions, when presented to customers at various points of their online shopping journey, help them purchase the right product from your store. Personalized recommendations are mostly based on customers’ browsing history, search queries, purchase history, preferences and demographics. The goal of such a strategy is to provide a convenient and enjoyable shopping experience with a touch of personalization, thereby, improving customer acquisition and retention.

While browsing through a product list, have you ever noticed a particular product that’s highlighted as ‘bestseller,’ ‘recommended,’ or maybe ‘just launched?’ You sure must have seen some while shopping on Amazon. Yes, that’s Amazon’s way of providing you some personal implication for a better choice of products!


What are the benefits of personalized recommendations?

In a research conducted by Salesforce, it was found that 52% of customers expect personalized offers every time they shop. Clearly, buyers are now concerned more on how they are being valued and providing personalizations would definitely hit the bull’s eye. And meeting customer expectations should be of topmost priority of any marketplace. But why should you consider implementing a strategy like personal recommendations for your marketplace? Let’s see how this strategy does wonders for your business.

Provides better customer experience

Time is precious for everyone and customers hate it when they don’t get what they’re looking for within the first few seconds of browsing. One of the major reasons for ecommerce site abandonment is customers not being able to find their desired item immediately. No doubt, an excellent search and filtering module of your website might display the right products for your customer. However, at times, customers might find it conflicting to pick that one right product from the sea of similar products in your marketplace.

Personalized recommendations display the most appropriate products to the customer based on their previous purchase history or their preferences and help them choose the most suitable one. This greatly reduces the unnecessary browsing time and accelerates the checkout procedure. With 59% of online shoppers believing that customized experiences help them find more interesting products, it’s high time you consider using it!

Improves customer engagement

Did you know that personalized recommendations play a major role in increasing customer engagement? When a customer feels overwhelmed with your products and leaves the site, it’s a clear indication that your website isn’t able to engage your customer. Personalized suggestions, when displayed strategically, engage the customer to browse through the recommended products, ponder over it and ultimately proceed to buy them. The strategy creates a rabbit hole-like situation for the customers: customers click one product, then get hinted at another relevant product, and then click on the second product, and the process goes on. This allows them to spend significant time on your website, thereby increasing the average session time. 

According to a report by Salesforce, shoppers who click on recommended products spend an average of 12.9 minutes on the site as compared to 2.9 minutes for those who don’t click on recommended products. The more time your customers spend on your website, the better are your chances of them buying from your marketplace.

Boosts sales conversion

We know that personal recommendations help customers stay on your site for a longer period of time. As the customer is provided with his product of interest, he or she continues to browse through those items and consider purchasing them. This eventually drags them further into the sales funnel leading them to eventually make the purchase. Shoppers who use search as well as product recommendations get converted 3.7 times more than by just searching for the product. So, don’t just rely on your site’s search module and start focusing on targeted recommendations!

Increases average order value

In retail stores, when you proceed to checkout, you would often find little products placed strategically around the billing counter. Such point of purchase (POP) displays immediately catch customers’ attention and they perpetually pick one and add to their cart while they checkout. This invariably increases their average order value without much of an effort!

The same effect could be achieved by targeted recommendations as well. Let’s say, a customer is looking for a particular DSLR. A great product recommendation by your website could help him select the right one. Next, when he proceeds to checkout, he’s prompted by a quick recommendation of a suitable camera lens that would enhance the function of his DSLR. Intrigued by the recommendation, he checks that out and decides to buy that too. On scrolling further into the product page, he’s suggested an appropriate camera case that has been purchased by similar customers buying the same camera. The customer finds it a great recommendation matching his requirements. Captivated by the combo, he proceeds to add all three products to his cart and completes the purchase.

You see, how such relevant products when strategically presented to the customer during his checkout process, increases the customer’s penchant of buying. Without much of an effort, the order value is increased besides making the customer feel that his needs are personally taken care of by your marketplace.

Numerous marketplaces, including Amazon, use the same strategy and lures customers into buying more. And Amazon really knows how to use the recommendation strategy well since 35% of Amazon’s revenue is generated by its recommendation engine!

Retains customer loyalty

Customer retention rate has a direct impact on your sales growth. Even by boosting a mere 5% in customer retention, you can increase your profits by up to 95%. And in the rat race of marketplaces, it’s important that you focus on retaining your customers.

When you deliver a positive shopping experience to a customer, they are more likely to come back to you. With custom recommendations, you give your customers a sense of personalization, making them feel that their preferences are being taken care of individually. That sense of familiarity will build trust on your marketplace and compel your customers to stay loyal to your business. Appropriate suggestions along with customer-exclusive offers and deals will undoubtedly improve your customer retention rate. 56% of customers prefer returning to brands that offer personalized product recommendations. Therefore, providing personalization is a great strategy to invest in.


How does it work?

To make your marketplace ace the recommendation game, you first require a suitable product recommendation engine that will be apt for your marketplace requirements and strategies. A product recommendation engine effectively provides custom product suggestions, special offers and deals that are tailor made for individual customers. It uses machine learning and artificial engine (AI) to analyze your marketplace’s collected data like your customer behavior, search history and other factors in order to provide exact suggestions. 

Product recommendation engines employ complex and sophisticated algorithms taking into consideration the massive amount of data that it processes. We’re not going to dive deeper into those calculations. Rather, we’re going to focus on how it basically works!

Product recommendation engines vary by the approach it takes. There are three broad techniques on which they work:

Collaborative filtering technique

Collaborative filtering system analyzes a wide range of similar customers to predict which products will be of best interest to the current customer. It is based on the most popular product preferences of the mass and recommends items accordingly.

To explain it better, we’ll take an example of a marketplace selling electronics goods. Let’s say most of the customers who visit the marketplace’s website, look for mobile phones. A collaborative filtering analyzes the trend of the users and tracks down the most popular smartphones that the majority of users are interested in or have purchased from your site. When a particular user then visits your site, he or she is suggested the same smartphones, triggering them to further consider buying the product.  

Content-based filtering technique

This technique focuses on individual user preferences and purchase behavior. It detects and analyzes each and every user actions like web pages viewed, time spent on different product categories, products clicked on, products wishlisted or added to cart, etc. Creating a user profile based on these actions, it then suggests relevant products to the same user the next time he or she visits your site.

Considering the same electronics marketplace, if someone has shown previous affinity towards home entertainment systems, he might be suggested to consider purchasing a particular sound bar.

Hybrid recommendations technique

As the name suggests, hybrid recommendation systems combine both the techniques. It evaluates data from similar users as well as individual users. Hybrid system analyzes both the data individually and then utilizes it to recommend appropriate products.  This kind of filtering is the most effective one and is highly used in the majority of marketplaces.

So, if a person searches for a TV at the marketplace, the results immediately display those ‘most searched for’ TV sets at the top of the results based on the collaborative filtering system. When the customer clicks on a particular TV set, it then suggests additional sound systems that go perfectly with the particular TV set, based on his previous searches for home entertainment systems!


Where should you place product recommendations on your site?

Strategically placing your product suggestions on your website is the key to a successful conversion through product recommendations. Your customers should notice your recommendations and feel curious to click on it. So, a random recommendation here and there that misses the eye would do no good. Here are some pivotal areas where you should focus placing your recommendations for good conversion results:

  • Homepage: This is probably the first page that your visitor is going to land on (unless they are directed to some other page through ads). Therefore, the impact of the first viewing page should be really strong. Site banners on top of the homepage is a great area that catches visitor’s attention real quick. Line up and highlight your best selling and trending products on this page that comes to the immediate notice of your customers. You can also show newest product arrivals, previously searched/viewed products, or even expert recommendations on your homepage for more influence.


  • Category pages: Category pages are the places which drive the discovery of your products. When your customers visit particular categories, you already know what they’re interested in. Recommend the most eye-catching products or fresh arrivals of particular categories or products that most customers have bought from the category.


  • Product pages: Product page is the page from where you can start your upselling game. People browsing individual product pages have the highest intent of purchasing that product. It’s the right time to push related products or bundled products in a way that compels your customer to buy them. Terms like “frequently bought together” or “customers also buy this” are pretty alluring calls for such recommendations and would definitely do the work.


  • Cart page: While bundled or group products recommendations can still be continued on the shopping cart page, this place is heavily suitable for that final deal. Special discount offers, reminders on wishlisted products, adding another relevant product for free delivery or additional discount, etc., are some of the things that can be put up at this point to increase the order value. However, at this point, your customer is almost at the finishing line. Any misleading or irrelevant push could lead to cart abandonment. Therefore, be extra careful of your recommendations at this crucial area.


Product Recommendation for WooCommerce

Now, you might be wondering how to implement such a product recommendation engine to your site. If you have proper resources and time, you might build your own recommendation engine for your marketplace. In this way, you might be able to customize your modules according to your marketplace’s requirements. Alternatively, you might also want to try pre-built plugins or softwares that would do the work for you and your marketplace. WooCommerce has some popular plugins like WooCommerce Product Recommendations and Recommendation Engine that are pretty good. Alternatively, if you want advanced recommendation features and capabilities for your marketplace, AI based engines like Visenze and Recolize can be your good friend. Whatever you choose, you need to configure your software according to your marketplace needs and trends.

The product recommendation engine market is expected to reach about USD 15.13 billion by 2026 with 89% of companies investing in this strategy. Businesses have found great ROIs after they’ve implemented the product recommendation strategy. So, now that you know the benefits of product recommendation and how you should ideally do it, dive straight into it and watch your marketplace soar to the next level.

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