According to Forrester, almost 90% of online businesses already invest in personalization.
While there are countless ways for eCommerce brands to benefit from personalization, real-time 1:1 product recommendations are among the most effective and productive ways to use personalization throughout your customer buying journey.
You can increase sales, improve customer satisfaction and foster brand loyalty by recommending relevant products to customers. Yet, recommending products is not so easy. Suggesting effective and relevant product recommendations to customers requires careful planning and execution.
What are personalized product recommendations in eCommerce?
A product recommendation is precisely what it sounds like: a recommendation for a product.
In eCommerce, personalized product recommendations are a type of marketing strategy that involves suggesting products to individual customers based on their unique preferences, behavior, demographics, browsing or purchase history, interests and other factors.
Personalized recommendations strive to enhance your customer experience by providing relevant and timely product suggestions that match the customer's unique needs and interests. They are also really effective at driving revenue by boosting sales and AOV for your Shopify store.
Tailoring product recommendations to individual customers can increase customer engagement, loyalty and satisfaction.
These recommendations can be displayed throughout the customer journey and are designed to help customers discover relevant products and increase the chances of conversion.
Why are personalized product recommendations important for your Shopify store?
eCommerce personalization has become a necessity.
Customers want personalization. Every day, we are surrounded by personalization, whether it is music recommendations from Spotify, TV shows or movie recommendations from Netflix, or product recommendations from Amazon.
Customers have learned to expect the same level of personalization from all brands they interact with. 56% of customers are more inclined to go back to an eCommerce brand that offers product recommendations and 74% of customers feel frustrated when website content is not personalized.
Personalization aims to interact and communicate with customers on a one-to-one level. Personalized recommendations show customers that you value them as individuals and understand their needs and preferences.
Brands are investing in personalization to build relationships and create better customer experiences.
In a world where the majority of brands are focusing on improving personalization, businesses that do not prioritize creating a personalized experience risk falling behind.
The most important reason why you should get started with personalized product recommendations is that your competitors will soon catch up. And the benefit gained from using product recommendations is significant.
Product recommendations benefits
Product recommendations are a powerful tool that can help eCommerce brands achieve their goals and objectives. Personalized product recommendations are a must-have to succeed in the competitive world of eCommerce.
Let's dive in and explore the benefits of product recommendations!
1. Boost Your Sales
The primary benefit of product recommendations is that they can significantly increase sales. By suggesting relevant and personalized products to customers, businesses can improve the chances of them making extra purchases, increasing the average order value and driving overall revenue.
2. Cut Your Marketing Costs
Personalized product recommendations can reduce marketing costs by providing an efficient way to reach customers with targeted product suggestions.
Instead of spending money on broad marketing campaigns, businesses can use personalized recommendations to deliver more relevant and targeted product suggestions to customers.
This can result in a higher return on investment (ROI) and reduced marketing costs over time.
3. Enhance the Customer Experience
Product recommendations can enhance the customer experience, keep customers engaged, and return to the website by making it easier for them to find what they're looking for.
Relevant product suggestions help customers navigate the wide catalog of products and find items that match their interests and preferences.
4. Drive Customer Loyalty
Personalized product recommendations can help businesses build stronger relationships with their customers by showing them that the brand understands their needs and is committed to providing them with an unforgettable shopping experience.
Personalized and relevant product recommendations can create a more positive customer experience, which can lead to increased customer loyalty.
5. Gain a Competitive Edge
In today's highly competitive eCommerce landscape, businesses need to provide a differentiated and personalized experience to stand out from the crowd.
Personalized product recommendations can help eCommerce brands gain a competitive advantage and position themselves as a leader in the market.
7. Increase Your Average Order Value
Personalized product recommendations can also lead to increased average order value by suggesting complementary or higher-priced products to customers.
When customers are presented with personalized recommendations that match their interests, they may be more likely to add extra items to their cart, resulting in a higher average order value.
Learn more about increasing AOV: How Personalized Product Recommendations Increase AOV for Shopify Stores
8. Boost Repeat Purchases
Personalized product recommendations lead to increased repeat purchases by suggesting the right products, at right time, to the right customers.
When customers receive personalized recommendations that fit their interests and preferences, they are more likely to make additional purchases in the future.
This can help businesses build a loyal customer base and increase customer lifetime value.
Recommended Reading: Benefits of Personalized Product Recommendations in eCommerce
How using default Shopify product recommendations is costing you money
Product recommendations in Shopify which the Shopify merchants can implement for free are based on simple rules. While these rule based suggestions can be helpful in some cases, they are not really effective in increasing sales and revenue.
1. These recommendations are not profitable
Shopify only provides "related products" and purchase history based recommendations. By displaying related products, you are not showcasing the full range of your product catalog. It limits the visibility of some of your best-selling or higher-margin products resulting in lower sales and dropping profits.
2. You are missing opportunities for cross-selling and upselling
Shopify recommendations are causing you to miss out on potential sales and revenue. When you only use "related products" recommendations you are missing out on opportunities to suggest complementary items or upgraded high-margin products that could increase the average order value and overall revenue.
3. These recommendations are not personalized
The default product recommendations in Shopify are not tailored to each individual customer's preferences, behaviors, and needs. So they don't provide the most relevant products to each customer, reducing the likelihood of them making a sale.
While Shopify's default product recommendations may be a good starting point, they are not sufficient for optimizing your sales and revenue.
It is beneficial for your brand to explore third-party apps that can provide more advanced product recommendation capabilities.
You can use personalized recommendations based on browsing behavior and purchase history or AI-powered recommendations that can analyze customer data to provide even more accurate and relevant product suggestions.
PersonalizerAI is powerful AI recommendations app on Shopify app store. PersonalizerAI delivers product recommendations across the buyer journey and increases conversions by atleast 40% for brands using it.
Recommended Reading: How To Upsell on Shopify: 10 Upselling Tips To Boost Profits
Why use AI product recommendations
With the rise of online shopping, it has become difficult for brands to manually analyze customer data and provide relevant product recommendations.
This is where AI-driven product recommendations come in. Artificial Intelligence can analyze vast amounts of data and provide effective personalized recommendations to customers very easily.
AI-driven product recommendations can not only save time and effort for brands but also provide a highly personalized experience to their customers, increasing engagement and loyalty.
1. Let technology do the heavy lifting for you
With the large volumes of data generated by eCommerce businesses, manually analyzing and identifying trends and patterns in customer behavior is a daunting task.
AI-driven product recommendations leverage machine learning algorithms to analyze vast amounts of data and generate personalized recommendations, reducing the time and effort required to identify relevant products for customers.
2. Personalization at Scale
AI-driven product recommendations can analyze customer behavior, browsing history, and purchase history to identify the products that are most likely to appeal to each customer, providing a highly personalized experience.
This can increase customer engagement and loyalty, leading to greater customer lifetime value.
3. Efficiency Unleashed
AI-based product recommendations can operate 24/7, providing personalized recommendations to customers at any time, without requiring human intervention.
By reducing the time and effort required to identify relevant products for customers, AI-driven product recommendations can increase the efficiency and effectiveness of marketing efforts, leading to reduced marketing costs and increased ROI.
With PersonalizerAI, you won't have to worry about manually adding cross-sells or up-sells. You can just let the AI take care of your customers by suggesting personalized product recommendations in real-time that convert.
4. Promote the right product to the right customer at the right time
These product recommendations leverage machine learning algorithms to identify patterns and relationships in customer behavior, leading to highly accurate recommendations.
By analyzing customer behavior, browsing history, and purchase history, AI-driven product recommendations can identify the products that are most likely to appeal to each customer, increasing the chances of a sale.
This also helps to avoid recommending products that the customer is not interested in, leading to a better customer experience.
5. Adapt or Die
AI-driven product recommendations can adapt to changes in customer behavior and preferences, ensuring that recommendations remain relevant and effective over time. This can help eCommerce businesses to stay competitive and responsive to changing market conditions.
Product Recommendations Are Essential to Success
eCommerce product recommendations play a crucial role in the success of online businesses. By offering customers a more personalized and relevant shopping experience, businesses can increase their chances of converting site visitors into paying customers.
Product recommendations lead to an increase in sales and revenue, by suggesting complementary products or upselling a higher-priced item. Providing personalized recommendations can also help improve your customer retention and loyalty.
Shopify stores offering personalized product recommendations enjoy a competitive advantage by differentiating themselves from their competitors. They attract and retain more customers.
Product recommendations also generate valuable data insights thqt businesses can use to improve their marketing strategies and product development.
eCommerce product recommendations are essential for optimizing online sales and improving loyalty for your Shopify store.
Effectively upsell on your Shopify store: What is Upselling? Ultimate Guide for Shopify