Personalisation and Recommendation Tools
for E-Commerce

Web Personalisation is: -

“Creating experiences on Web sites or through interactive media that are unique to individuals or segments of consumers.”
                                                       
Forrester

The bottom line for owners of online shopping sites is for personalisation and recommendation tools that are linked to their websites to increase sales through enhancing the experience for  their customers.

 In 2008 Jupiter Research found that:-

“Nearly half of all online shoppers (48%) plan to spend less this year, but a majority of those reluctant to make certain purchases (61%) can be positively influenced by online shopping resources like personalized recommendations.”

In a recent Aberdeen study, titled "The 21st Century Retailer: Managing Customers, Merchandise and Data”:

“70 percent of all retailers planned to implement real-time analytics in the 12-month to 24-month time frame.”

E-commerce personalization and recommendation tools are able to drive key metrics such as: -

Revenue
Conversion
Average transaction value
Time on site
Margin

 For all retailers surveyed in the Aberdeen Group “Clicks to Customers” benchmark study, three indicators of performance surfaced above the rest as metrics that retailers use to evaluate success:

Increased year over year comparable sales (49 percent)

Increased average order value (43 percent)

Increased customer conversion rates (43 percent).

In order to increase online conversions, personalisation solutions generally fall into five categories:

Versioning - displays different versions of pages based on segmented customers

Cross-selling - displays recommendations on a page(s)

Filtering - displays specific information based on customer's directive

Custom - displays options specifically aligned with an ecommerce provider's differentiated offering

User-generated - displays such as "top rated" or "most recommended" products based on community feedback and actions

eCommerce Personalization Tools: How They Work

However, this is a developing area and personalisation and recommendation tools are becoming more sophisticated and involve: -

Build relationship maps of product inventory and attributes

Capturing consumer intent and combining it with the “wisdom of the crowds.

On page load, running multiple recommendation types in real time to recommend the perfect products.

Measuring the performance of the recommendations, thus creating a real time-feedback loop that constantly optimizes them on a per placement and per page basis.

Awareness and Perceptions of E-commerce Recommendations

Who should be involved in the Decision Making Process?

 The Director for E-Commerce plus: -

                       

Questions to ask when considering a solution for your needs

How much data is gathered and from where?

S
parse data sets will yield poor recommendations, which not only creates a poor customer experience but also does little to drive sales

How sophisticated is the reporting?

It is critical to understand how personalization tools interact with conversion and the level of detail that can be provided to understand what tools are working and what are not in terms of increasing sales.

How quickly can the algorithm be changed/adjusted if necessary?

What types of clients does the vendor already have? 

Additional Resources
 

"How Brands can Win on the Web" 17 February 2010

"Shoppers literally give thumbs up (and down) to recommendations on Tobi.com" 19 November 2009

"Wine.com ecommerce site Recommendation Tool" 26 October 2009

"Why Personalisation for SMBs now?" 17 October 2009

"Fulfilling the Product Recommendations Promise" September 2009

"Personalization without interrogation: Shop easier, faster and better, without telling your life story" 12 August 2009

"E-commerce - is the next wave about to break?" by Jamie Murray Wells, founder and Executive Chairman of Glasses Direct 26 May 2009 (look at the comments in particular)

"The New Rules of Engagement: Make it Relevant" - video seminar Forrester Research 3 March 2009 New York, USA

 "Online Retail: Driving Relevant Experiences" JupiterResearch study,

“Which Personalization Tools Work For eCommerce — And Why” by Sucharita Mulpuru for eBusiness, Channel & Product Management Professionals, Forrester Research

“Personalization Hat Trick: Revenue, Loyalty and Conversions” By John Lovett, E-Commerce Times

“Personalization: Telling E-Tail Customers What They Really Want” By Rachelle Crum, E-Commerce Times

"The 21st Century Retailer: Managing Customers, Merchandise and Data." January 2007

Working with one of our partners, pjb Associates can help you with appropriate Personalisation and Recommendation Tools for your specific needs.

Contact Us

For more information please select Contact Us button above or contact Peter Bates by email pjb@pjb.co.uk or telephone +44 1353 667973.

Home

Last updated 24 February 2010