AI-powered sales using personalization through recommendations have revolutionized online retail. These data-driven tools enhance the customer experience while simultaneously driving sales, by providing tailored and relevant product suggestions.
How can product recommendations elevate your business in 2024? We’ll dive into the trends, statistics, and best practices for implementing personalization on your online store.
Understanding Product Recommendation Engines
Proto AI’s product recommendation engines suggest products that a customer might be interested in based on the real-time behavior of a customer on your website. By analyzing this data and behavior, we are able to show relevant offers catering to individual shoppers’ preferences.
When online retailers effectively implement a recommendation engine like Proto AI’s solution, businesses can engage customers better and enhance conversions, ultimately boosting sales.
Growth Trajectory of Recommendation Engines
Recent market forecasts by Mordor Intelligence project the Recommendation Engine Market size is estimated at USD 6.88 billion in 2024 and is expected to reach USD 28.70 billion by 2029.
Roughly 71% of consumers expect companies to deliver personalized interactions. However, despite the influence on online shopping behavior and the proven effectiveness of product recommendations, many retailers fail to place them strategically across their websites.
When placed strategically throughout the website and tailored to each customer, product recommendations can play a key factor in increasing the average order value (AOV) of customer purchases. After implementing Proto AI, our customers have seen over a 17% increase in AOV. This increase is likely due to the fact that customers who are shown and click on recommendations are more likely to complete a purchase.
The Impact of Personalization on Consumer Behavior
Personalization in ecommerce is a great revenue generator. Approximately 49% of consumers confessed to purchasing a product they hadn’t initially intended to buy, influenced by a personalized recommendation.
Customers hold personalized experiences, offers, and recommendations in high regard when shopping — these curated experiences influence brand loyalty and create a better shopping experience for your customers. According to BigCommerce, 66% of customers said that encountering content that isn’t personalized would discourage them from a purchase.
Personalization is not only desired by individual consumers but also business buyers. A study from The Future of Ecommerce reveals that 73% of B2B buyers say they want a personalized, B2C-like customer experience.
Personalization, particularly in the form of product recommendations, has become the cornerstone of successful ecommerce. By understanding and implementing these strategies, businesses can significantly up their game, driving conversions, and boosting sales like never before.