July 31, 2018
Ecommerce product recommendations have been a core part of every digital marketer’s strategy for years. And it’s no wonder why: it’s an uncontested belief that recommendations deliver reliable ROI for brands by helping with cross-sell and upsell efforts. According to The 2017 State of Personalization Report from customer data platform Segment, nearly half—49%—of consumers report having made impulse purchases as a result of a recommendation, and only 5% of those resulted in a return. With that kind of added value, it’s evident why product recommendations are now more or less ubiquitous.
But are they being used to their best effect? Or have they become a “set it and forget it” solution that marketers can use for a guaranteed revenue boost, without considering the best ways to drive maximum value?
Marketers have been settling for stable but stagnant value from their product recommendations solutions. There could be a lot of room for improvement, but only if they’re willing to rethink how recommendations fit into their overall marketing strategies.
For our latest Ecommerce Quarterly report, EQ2 2018: The Right Recommendations, we drilled down into the data to figure out what kind of value recommendations are truly delivering—for marketers and for customers. We looked into how these recommendations can be used to augment marketers’ top priority goals, such as boosting the KPIs that speak straight to business impact, as well as providing an enhanced user experience that helps build customer loyalty.
What we found is that when product recommendations work, they really work. When recommendations elicit any type of reaction from the customer (anywhere from click-throughs all the way to purchase in the initial session), they are wildly successful at boosting cart size, average order value, and overall purchase conversion rates. However, those instances of customer engagement happen with surprising infrequency. In fact, we found that over 88% of the time, recommendations fall on deaf ears as users tune out irrelevant content and continue to scroll past.
So, what can marketers do to increase the appeal of their recommendations?
It starts from a customer-centric, rather than product-centric, orientation. Product recommendations are desperately in need of a personalization makeover.
Some takeaways from the report include:
Download the EQ2 2018: The Right Recommendations and learn more!