Up until fairly recently eCommerce recommendations and remarketing were only possible for large eCommerce sites. However, the emergence of recommendation and remarketing tools and service providers over the last two years have made these sales boosting benefits accessible to even small businesses and marketers.
In this article we will look at what recommendations and remarketing are within the field of eCommerce, before looking at how they can benefit your business and boost your sales.
What Recommendations & Remarketing Mean
Recommendations have long been a core component of Amazon’s website, with up to 70% of Amazon’s home page dedicated to recommendations. There are three primary types of recommendations:
- Generic: These recommendations are seldom influenced by your past browsing and shopping history, and often show what other customers are currently looking at, or what the top-sellers are in general, or by category.
- Complementary: These recommendations are directly influenced by your current and past behavior on an eCommerce site, and will be made up of items that complement or enhance the items you are currently looking at.
- Alternatives: These recommendations are alternatives to what you are currently looking at, or what is already in your cart. Alternative recommendations can be used to either upsell or to retain a customer where the product they were originally interested in is out-of-stock.
Remarketing is primarily about having your online ads displayed to users who have previously visited your site, as they browse other websites. However, remarketing can also be used in tandem to recommendations by showing visitors to your site products they have viewed on other sites, and even items that are relevant to their current geographical location.
Both recommendations and remarketing rely on you having a substantial amount of data regarding your customer’s behavior and history, and the arrival of recommendation and remarketing tools and service providers gives small businesses access to this, along with access to 3rd-party data that enhances what they have already collected.
Using Recommendations to Increase Average Basket Size
Careful implementation of complementary, and even generic recommendations, can lead to an increase in your average basket size, with a McKinsey case study showing that cross-selling techniques can increase sales by 20%. The focus should be on items that enhance what the customer is looking at; for example, if the customer is looking at a shirt, complementary recommendations would be pants, shoes and even socks that create a complete outfit. However, there shouldn’t be too many recommendations or you risk losing the customer. Generic recommendations in this context can encourage customers to explore your site more, possibly finding items they want, but weren’t actively looking for.
Using Recommendations to Increase Conversions
Countless sales are lost each day when the item the customer is looking for is out-of-stock; but alternative recommendations can help you. Whenever an item is out-of-stock, ensure that you display at least three alternatives, using a good, better, best approach. Caution must be taken when setting up your alternatives since they should closely match the original; if the customer was looking for a light switch, don’t offer them a new lampshade as an alternative.
Using Recommendations to Improve Customer Loyalty
Personalization plays a critical role in fostering customer loyalty for online stores, and personalizing some of your generic recommendations is one way to start. Generic recommendations are shown when you don’t know what the customer is actually looking for, but once you have some history on a customer’s past behavior you can, in addition to the standard generic recommendations, show a list of items they bought recently, or buy frequently. This is particularly appropriate for FMCG and other items customers need to buy regularly.
Amazon’s recommendations are said to generate up to 30% in additional revenue for the company, and while they have been doing this for quite a few years, any online business, big or small, can realize a boost in sales through the proper implementation of their own recommendation and remarketing strategy. The only requirement is that you start now.
Przemyslaw Mankowski as a CEO of QuarticON concentrates on company’s further expansion on the market, lead International business strategy and develops business partnerships in CEE and worldwide. He has been working in New Tech industry for several years. Prior to joining QuarticON.com, he was Sales Director in Agora and Member of the Board in Trader.com (Poland). He was also CEO at Passus and NextWeb Media.