A new White Paper launched today (18th February 2010) by recommendation technology specialist Peerius, explores how online retailers can benefit from a recommendation engine both in order to boost sales and improve customer experience.
The report entitled The Power of Recommendation argues that consumers are now facing a tyranny of choice and that while an extensive product range offers an increased likelihood of meeting a customers need, too much choice can damage sales.
The authors Dr Mike Baxter and Dr Andreas S. Weigend both experts in the field of e-commerce and data strategy, go on to describe how computerised recommendation engines are the best way in which to cross and up-sell products by leveraging the data provided by all users to the site. This improved targeting allows customers to make better-informed decisions, which in turn enhances their shopping experience and encourages them to return and repeat purchase.
Recommendation engines help customers to navigate an extensive product range without becoming overwhelmed and help them to discover the products they want to buy.
Recommendation engines create paths to purchase by reducing the bounce rate and improving return on search marketing investment.
Recommendation engines allow the site to not only have accessories that are manually merchandised for top products but, based on behaviour of the entire community, can provide cross sells for every product.
Optimising the ordering of products on a category page is a major challenge. The analytics insights from a recommendation engine enable this to be optimised on the basis of either product level sales conversion or product-page-level sales conversion.
Retailers can learn from their customers and evolve their product range.
Commenting on the White Paper, Juliet Lecchini Marketing Director at Peerius said; "Harnessing the power of recommendation technology can transform both a consumers shopping experience and a retailers ability to up and cross sell and to refine its product offering. We would typically expect to see online sales increase by around 10% although this can increase to 20%, depending on the site and the business sector."
The Power of Recommendation White Paper is available to download for free from www.peerius.com/whitepapers
Notes to the editor
Peerius was founded in December 2007 and specialises in global Recommendation Engines, working for many high profile e-commerce brands including republic.com and notonthehightstreet.com.
About the authors
Dr Mike Baxter is one of the UKs leading experts on e-commerce. He has published benchmarking reports on online retail since 2004 and his consultancy clients include Google, Argos and Littlewoods.
Dr. Andreas Weigend, former Chief Scientist of Amazon.com, is a well respected global authority in understanding how people behave online. He helps companies to develop their marketing and data strategies around the principles of the social data revolution. He has over 15 years of consulting experience with clients ranging in size from startups (including early-stage del.icio.us) to MySpace and the World Economic Forum, and in focus from Lufthansa and Goldman Sachs to match.com
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