The Role Product Recommendations Play in Increasing Conversions

Let's explore product recommendations and their role in increasing your website's conversions.

Conversion rate optimization is a standard technique for every online store. There are a variety of AI-powered product suggestion systems available today, so it's never been easier to incorporate this strategy into your business. Conversion rate optimization is a frequent goal for any online store. With the proliferation of AI-Powered Product Recommendations solutions, it's simpler than ever to incorporate these suggestions into your business for greater sales, happier customers, and more dedicated clients.

According to research by Salesforce, customers who click on suggestions are 4.5x more likely to put those things in their shopping carts and 4.5x more likely to make a purchase.

What defines a tremendous AI-Powered Product Recommendation Experience?

The engine should consider the shopper's needs and interests when making recommendations.

For example, if you're a customer who regularly buys women's clothing, an AI-powered product recommendation system would consider that when making recommendations. It would recommend products specifically tailored for women's clothing.

On the other hand, if you're a customer who only buys men's clothing, the system would recommend products specifically tailored for men's clothing.

In other words, AI-powered product recommendations are much more specific and tailored to the individual customer than traditional product recommendations.

How AI-Powered Product Recommendations Work?

AI-powered product recommendations take into account the customer's needs and interests. This information is used to recommend products that are relevant to the shopper.

The first step is to collect data about the shopper. Shopper data can come from a variety of sources, like:

• Browsing history  
• Search History  
• Purchase history  
• Demographic information

Once this data is collected, it's fed into an AI algorithm. The algorithm analyzes the data and identifies patterns.

Based on these patterns, the algorithm makes recommendations to the customer. The recommendations are displayed to the customer on the website or app.

The company that has made it big with AI-based suggestions is Netflix, which provides users with recommendations for shows and movies to watch. Netflix has even claimed that the annual cost savings from their AI-powered recommendation system amount to $1 billion.

Reference link: https://mindtitan.com/resources/blog/product-recommendation-engine/

AI-powered product recommendations can have a significant impact on conversion rates.

That's because they're highly relevant to the individual customer. Since the engine intelligently considers the customer's unique needs and interests when making recommendations.

This relevancy is vital. We have read studies that report that relevant product recommendations can increase conversion rates by up to 30%.

On the opposite, irrelevant product recommendations can decrease sales. In one study, 74% of respondents said they would be less likely to buy from a company if they were shown irrelevant product recommendations.

In other words, if you want to increase conversion rates, you must ensure that your product recommendations are relevant to your customers. And that's what AI-powered product recommendations can help you do.

To provide more accurate recommendations, more sophisticated product recommendation algorithms consider not just user activity history (a technique known as collaborative filtering) but also the following two factors:

• Size, shape, material, and other accessible data serve as the basis for the suggestions being made.
• Comprehensive background data about the target of a recommendation, including age, gender, location, etc.

AI-powered product recommendations are a powerful tool that can help you increase conversion rates. They're relevant to the individual customer and consider the customer's needs and interests.

Wrapping Up:

You're missing out on converting more sales if you're not using AI-powered product recommendations. So, if you're looking for a way to improve your conversion rates, AI-powered product recommendations are a great place to start.  We have assisted a number of global corporations in effectively implementing recommendation engines.

Take advantage of our free workshop with one of our Digital Commerce experts, where we create your strategy for implementing an AI-Powered Product Search & Discovery Experience. Let us create a roadmap for your ultimate product recommendations.