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How any business can benefit from personalization and recommendations

Jun 9th 2022 product

How any business can benefit from personalization and recommendations
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Today’s consumers are bombarded with choices that can feel both overwhelming and lead to buyer paralysis. Scrolling through endless items may feel time-consuming and pointless, or make customers wonder: With all of these choices, is there still something else that will work better for me? In the end they get trapped in the sales funnel, or abandon their cart while lost in a cloud of indecision.

Recommendations (a form of personalization) can help alleviate some of this pressure by curating a better, more targeted experience. For businesses, incorporating recommendations can be highly beneficial as well. As an example, Algolia customer Gymshark saw the adoption of Algolia’s Recommend product transform their business: 150% increase in order rate and a 32% increase in ‘Add to cart’ rate during Black Friday 2021.

Looking outside of just Algolia customers, recommendations account for a major percentage of the conversions on some of the world’s leading websites:

  • 70% of the content people watch on YouTube
  • 35% of what consumers purchase on Amazon
  • 80% of what people watch on Netflix 

Better user experience, better business results – win-win. Now, let’s explore the benefits of recommendations even further.

Looking at our “Why we recommend Recommend” article

In our article about Algolia’s Recommend, we talk about how the sheer volume of information leaves people spending time trying to find what they’re looking for rather than enjoying it. Our tool is designed to make the search experience faster and more intuitive and relevant. This helps businesses improve customer interactions with their website and leads to several other benefits.

As we mentioned in our article, Recommend streamlines the experience by surfacing similar content, related and trending products, and frequently bought together items to help people find what they want without having to jump back and forth between pages and searches. In addition, when users come back to the site, their content is fine-tuned based on your customers’ previous interactions to help them find things they want or might like without endless scrolling, jumping from page to page, or having to try multiple search terms.

Now the question is, what other benefits do businesses see while their customers now have these better, more enriched online experiences? 

How do businesses benefit from personalization and recommendations? 

Before we delve into the business benefits of personalization and recommendations, let’s briefly look at two experiences: 

The first lacks recommendations. A potential customer needs a new desk and possibly some things to go with it for the home office they’re setting up. On an office furniture and supply website they enter the search term “white desk.” There are over 600 results. The first few are varied, ranging in size and style. The user clicks on the one they like, decides it’s not quite what they want, and then hits the back arrow. They keep doing this until they finally tire of scrolling down to the bottom of the page over and over again. There are too many choices, and they aren’t finding any inspiration. They are also sifting through numerous white desks that don’t fit their criteria. It becomes overwhelming to try to remember if there was anything they liked on the previous page of results, so they eventually leave without having made a decision or purchase.

In the second experience, the website has the ability to recommend products. After the user clicks on the first desk they like, they are able to navigate from that same page to similar products with similar attributes of style and size. The recommended, related products are at a variety of price points and differ enough in looks to make browsing interesting. Each page also includes a link to other products in each collection, allowing them to easily find matching filing cabinets and shelving units alongside a carousel of frequently bought together items. The shopper stays engaged long enough to not only select a desk to purchase, but also adds a bookshelf and desk lamp, and places an office chair in their favorites list that they can revisit in the future.

Keep these two experiences in mind as we talk about how providing personalization and recommendations can benefit businesses.

Experiences enriched with recommendations offer:

A better customer experience

Time is a precious commodity as is the ability to make straightforward decisions. There is such a thing as too many options. Although consumers may not fully understand it, personalization plays a huge role in zeroing into what may best meet their needs. Think of a streaming video service. Isn’t it easier to see the content that is closest to the shows and movies you like, rather than sifting through the entire content catalog to find it? 

Another way to look at it is that someone who likes mysteries and thrillers isn’t likely to spend time browsing the historical nonfiction books section at the bookstore – they’ll wander right past to get to their favorite section. In this scenario, they’re personalizing things for themselves. However, they also know that the section is there, should they ever need it for something specific.

With recommendation tools like Algolia’s Recommend, algorithms help filter, curate, and enhance experiences. They help customers navigate away from the sections that don’t interest them to get to the stuff that they like. In essence, you’re putting things in front of them that are more likely to catch their attention while saving them time and making their purchase decisions easier.  

Better website engagement

In the first experience example above, the user got overwhelmed. They left the website fairly quickly, which means they weren’t engaged. In the second experience, the customer was engaged enough to find multiple items that worked for them. That’s because the actions they took led to insights that helped identify and show items that would interest them.

Increased cart value

Personalization and recommendations can increase cart value. One way we do this is by helping businesses feature related products and frequently bought together items on a page. Let’s say a potential customer has an espresso machine that they’re looking at, and they see that it would be helpful to also purchase some accessories and cleaning tools based on the recommendations that were surfaced to them on the espresso machine’s product page. On a website with recommendations, any item can be featured on any page that a customer is looking at. The chances for an increased cart value happens every time you provide customers with more items of interest that can complement their purchase.

Improved sales conversions

Potential customers are more likely to advance through the sales funnel when they see items that they like, which is more likely to happen when a business uses a recommendations tool. Another thing to consider in the current era of shorter attention spans is that the faster someone is offered targeted content, the better the chance they’ll follow through with a purchase. We see this pattern repeat itself time and again with many of Algolia’s customers. Gymshark, as an example again, used Algolia’s Recommend to boost revenue and maximize conversions alongside increasing catalog views. 

Customer loyalty

When someone has a positive experience with a website, they find an item that they like and they discover other items of interest, then they are more likely to come back. You’ve saved them time and engaged them by paying attention to their interests, and that makes them feel good. On top of this, they’re then more likely to become advocates of your brand and business, referring their friends and family to you.

Integrating Algolia’s Recommend

Even knowing the benefits of recommendations, businesses can find the task of integrating those features daunting. Algolia’s Recommend truly makes it easy. Our product is fast to integrate and deploy, and simple to use. Once adopted, Recommend offers critical insights for its users and gives companies a filtering method that allows them to surface recommendations perfect for their business and customers.

Having these features on your website leads to one last benefit — the ability to stay competitive. In our ecommerce trends report, of the 900 retailers surveyed, only 1 in 5 claimed that they personalize search and recommendation functions by user. So having a robust recommendations feature on your website could translate into a critical competitive advantage to help your business stand out from the competition.

When you understand your customers and give them what they need, they’ll keep coming back. To gain the power of personalization and recommendations, sign up for free to try Recommend and/or reach out to get a demo.  

About the author
Marie-Laure Thuret

Technical Product Manager

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