Why are Personalized Recommendations necessary in e-commerce?

E-commerce is probably one of those few industries that have seen the greatest revenue growth, and it is also one of those industries that have always tried to better themselves. For example, when it started, it was just a business where people could order anything online and then pay for it when it reached them. Next, e-commerce introduced online payments to avoid any sort of cheating. As the demand for online payments grew, multiple payment gateways were introduced. Then came the recommendation engine. This tool recommended the customer’s product that proved to be helpful. The recommendation engine is also the tool that is responsible for the growth of Amazon. A little piece of information if you don’t know this already – Amazon earns most of its revenue from its recommendation engine. Now, it is the 21st century, and e-commerce requires yet another update that is personalized recommendations. There are few websites that are already providing personalized recommendations, for example, Amazon or Flipkart. But, a wide range of e-commerce platforms is yet to adapt personalized recommendations. 

Why are Personalized Recommendations Important?

There are many reasons why personalized recommendations are essential, and the primary reason is that it attracts more customers and increase business revenue. We have listed below three factors that get a major advantage because of personalization. 

1. Increases Browsing Time

When customers get personalized recommendations, it is bound to happen that at least eight out of ten customers will click on any of the recommendations. This increases the browsing time and eventually only benefits the business.

2. Enhance User Experience

Don’t you love it when you go to the shop and find everything you need at once, more importantly, when you get everything in one place? This is exactly what happens when a customer visits your website, which has personalized recommendations. Customers will get everything they need on their home page itself. This saves the customers time, and they might end up getting a few things that otherwise they wouldn’t have. Always remember: The key to a successful business is a happy customer. 

Also read : How to Integrate Recommendation engine with e-commerce platforms. 

3. Increase in Revenue

Revenue growth has always been proportional to Sales, and sales have been proportional to customer satisfaction. As explained above, when customers get happy, they tend to shop more – and personalized recommendations play a crucial role in increasing customer satisfaction. This is why we say personalized recommendations can help in increasing the total revenue of an organization. Example – Amazon and Netflix. Both these successful ventures have made it open that over 35 to 50 percent of their revenue comes from recommendation engines. 

Conclusion

As mentioned above, personalized recommendations are no longer a want for the e-commerce industry but a need. Personalized recommendations have become a deciding factor that can change the entire e-commerce industry. So, what are you waiting for? Explore the recommendation engines that are already available on the internet. Start by taking a free trial and see how it can align with your business.

Take the 14-day free trial of Alie – an AI based recommendation engine now to leverage its many benefits.