E-commerce study: automatic recommendations disappointing for most customers

When we go shopping online today, we all get recommendations for additional or interesting products that might be relevant for us. Might be?! Well, a new research by ChoiceStream called 2009 Personalization Survey states that recommendations by e-tailers are still poor. A personalization strategy can be benefitial for businesses but also be an access killer for customers of online shops.

Almost 60% of the internet users were not happy with personal product recommendations on e-commerce sites in 2009. Compared to 2008 (14% less than this year) this negative shopping experience is massively increasing. The reason is obvious. On the one hand, data mining technology is affordable and used by more and more shops (http://www.thestrategyweb.com/wp-admin/post.php?action=edit&post=9245&message=10although general knowledge on integration is probably low). And on the other hand, customer personalization expectation is increasing – 74% of the respondents notice product recommendations.

“Shoppers notice recommendations more than they have in the past and, in fact, have come to expect them” (…) “For this reason, quality and relevance are under a microscope.” Lori Trahan, vice president of marketing, ChoiceStream.

iTunes, Netflix and Amazon know their personalization business best and seem to have the lead in personalization efforts. The entertainment business (music and big book-stores) comes quite close with their recommendations, but shoe, toy and office supply sites seem to show bad results.

Spot On!
When results go up by almost 15% to the prior year, of shoppers who complain about not getting recommendations, then this should ring e-tailers’ alarm bells. Especially, if we learn from the study that nearly 60% who had spent at least $500 online in the past six months buy something according to recommendation features. Less successful are suggestions on order confirmations, promotional and transactional e-mails.

PS: Testing is important and e-tailers should be doing this in a periodical mode.

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