User-generated ratings and reviews are a known confidence-builder among online shoppers. But retailer product recommendations can also affect decision making—to a larger degree than you might think.
A new study by Monetate set out to quantify the sales impact on product recommendations. They compared shoppers who saw a recommendation but didn't engage with those who engaged with a recommendation. The research found that online retail browsers who engaged with a recommended product had a 70% higher conversion rate during that session. Return sessions also benefited from the initial product recommendation but to a lesser degree (55%).
Even shoppers who clicked on a product recommendation but didn't buy anything had higher engagement rates. These online retail browsers were 20% more likely to return to the site later.
According to Monetate, the effect of seeing but not engaging with a recommendation is practically the same as a shopper seeing no product recommendations at all. The average order value (AOV) was $107.04 and the average number of items bought was 3 for shoppers shown no recommendations vs. $101.63 and 2.9 items for irrelevant ones.
Of course, getting product recommendations right is easier said than done. In a January 2018 Bazaarvoice survey, 38% of US digital shoppers said they would stop shopping at a retailer that made poor product recommendations. This sentiment was consistent across many types of retailers including apparel and accessories (32%), health and beauty (31%) and sporting goods (30%).
Accurate recommendations go hand in hand with the current marketing mandate for personalization. More than one-third (36%) of retailers in North America viewed personalized recommendations as a customer experience priority, according to an April 2018 survey by Boston Retail Partners.