Maximize Online Sales With product Recommendations

MAXIMIZE ONLINE SALES WITH PRODUCT RECOMMENDATIONS Product recommendations are essential to meeting the aggressive performance goals of online retailers. While retailers use them extensively, product recommendations can be difficult to deploy and their impact on a business can be even harder to measure. PRODUCT RECOMMENDATIONS BY THE NUMBERS 100% 70% 25% of the top 10 websites in the Internet Retailer 500 use of Amazon.com's homepage is devoted to product of a merchandising team's time is spent deploying and delivering product recommendations. product recommendations. recommendations. USE PRODUCT RECOMMENDATIONS TO INCREASE REVENUE, CONVERSION RATE, AND AVERAGE ORDER VALUE The effectiveness of product recommendations varies according to several factors, including initial benchmarks and how extensively the recommendations are applied on the website. Vendors self-report very strong performance across all Key Performance Indicators: REVENUE CONVERSION RATE AVERAGE ORDER VALUE 2$ ....................... ................... ....................... up to up to 300 PERCENT 150 PERCENT 50 PERCENT INCREASE INCREASE INCREASE However, independent analysis and research firms estimate that: On average, between 2 PERCENT and 5 PERCENT of total website 15 PERCENT revenue can be attributed to recommendations (in some of online adults in the U.S. have purchased a recommended product. cases up to 20 PERCENT). OVERCOMING THE "PAIN POINTS" OF PRODUCT RECOMMENDATIONS One reason for the discrepancy between the performance reported by vendors and merchandisers is that historically, product recommendations have created-rather than alleviated-several pain points for merchandisers: SOLD! SPECULATIVE IMPACT LACK OF INFORMATION AND INPUT LIMITED AND INFLEXIBLE PAGE REAL ESTATE Incremental lift is difficult to measure if the recommendations Ecommerce executives are increasingly frustrated with "black box" approaches that disallow marketer inputs into the recommendations. Hard-coded "zones" restrict the cannot be tested against a Control Group that doesn't see any recommendations. available real estate for product recommendations to portions of the page that are difficult to change after deployment. Merchandisers need a new set of tools that provide real insights and control. Four new ways product recommendations help deliver the insight, flexibility, and ROI that merchandisers have long desired: BUY IT! NEW PRODUCT ALL NEW LOW COST WELL MADE SAFE L TRANSPARENT ALGORITHMS WITH CONTROLS 2 INTELLIGENT SEGMENTATION With no reliance on the "black box," merchandisers can choose exactly which algorithm drives the recommendations that each visitor sees. Rather than relying on the "wisdom of the crowd," merchandisers can target recommendations to key audience segments, such as by pairing "New Items" with returning visitors and "Top Sellers" with first-time visitors. TRY THIS! HECOMMEND I ---- ----- 3, EASY TESTING WITH DECISIVE REPORTING RAPID, CODE-FREE DEPLOYMENT Merchandisers can test any and all recommendations against a Control Group and accurately calculate incremental lift at any point in time. Avoid lengthy and invasive integration processes that require physical changes to the pages where recommendations are deployed. Deliver recommendations at the browser level with no page real estate limitations. REMEMBER: EVERY INTERACTION WITH YOUR WEBSITE VISITORS IS AN OPPORTUNITY TO CROSS-SELL, UPSELL, AND EVEN DOWN-SELL. Product recommendations are essential to many merchandisers. But to truly maximize ROI, merchandisers must seek out the features that combine flexibility, insight, and control while avoiding aspects that have contributed to retailers' lack of success in the past. SOURCES: FORRESTER RESEARCH | GARTNER | PATRICIA SEYBOLD GROUP monetate Follow @ Monetate on twitter