How to increase sales on Shopify and win more customers? Product recommendation does. Let the numbers speak for themselves: according to Monetate, product recommendations can increase revenue by up to 300%, improve conversions by 150%, and help boost AOV (average order value) by 50%.
Why so? Your online shoppers are willing to pay for a great customer experience. Give your shoppers a great experience and they’ll buy more. And what truly makes for a good customer experience? Personalization. The human touch in your Shopify store.
Using specific and personalized product recommendations can help you engage customers at a deeper level.
Review the following insightful trends and statistics to make appropriate modifications to your product strategy. They’ll give you a hint about what other eCommerce brands are doing with product recommendations in their stores!
The state of product recommendation
1. According to a report by Mordor Intelligence, the recommendation engine market is expected to reach USD 15.13 billion by 2026. In 2020, it was valued at USD 2.12 billion and registered a CAGR of 37.46% during the period of 2021-2026.
It is clear that technology is rapidly advancing, particularly with the recent wave of artificial intelligence, and the use of product recommendations is expanding. Customers now expect more personalized services, which means that the demand for tailored recommendations is higher than ever before.
2. As product display can influence online shopping behaviors, approximately 71% of eCommerce sites offer product recommendations. The number is even higher in Nordic countries: 90% of shoppers have reported finding recommendations on the homepage of eCommerce sites.
Bestsellers are one of the most popular product recommendation types on any eCommerce website, regardless of the niche or industry.
They are a safe bet and reflect the wisdom of the crowd. Since bestsellers are items favored by a majority of people, they usually generate the most revenue as the most-visited products.
3. While product recommendations should be placed throughout the eCommerce site for maximum effectiveness, many merchants are not making use of its advantages to the fullest.
According to Statista, 81% of online shoppers reported not finding any recommendations on the product listing pages (search results or category pages) of eCommerce sites.
Product recommendation trends to watch for your Shopify growth
So, when product recommendation is almost everywhere in eCommerce stores, where exactly is it going to be?
We believe that your Shopify business may already be implementing one of these product recommendation trends. Let's take a look!
Product recommendation trend #1: eCommerce AI and AI-powered product recommendations are on the rise!
As AI is believed to be the future of technology, the use of artificial intelligence in online retail, known as eCommerce AI, is growing rapidly.
Retail giants and FAANGs have been implementing AI for years before ‘artificial intelligence’ becomes an outburst and a “technology buzzword” like in 2023.
Do you know?
The “Recommended for You” section on Amazon is an example of AI at work. Amazon uses recommendation engines, which employ artificial intelligence to analyze data about the products that a customer has viewed or purchased, to make recommendations for other products that the customer may be interested in.
These engines are powered by complex algorithms that take into account a variety of factors, including the customer’s browsing and purchasing history, as well as the behavior of similar customers.
Highly personalized recommendations not only improve the customer’s shopping experience but can also lead to increased sales and customer loyalty.
As AI technology continues to advance, it is likely that we will see even more sophisticated recommendation engines in the future, further improving the way we shop and interact with technology.
Product recommendation trend #2: customers demand highly personalized recommendations
Reports show that 89% of digital businesses invest in personalization, including big names like Coca-Cola, Netflix, Sephora, Fabletics, USAA, and Wells Fargo. 72% of consumers say that they prefer to engage with personalized content.
Due to the high demand for a personalized shopping experience, online shoppers now expect Shopify merchants to deliver a better human-tailored experience in their stores. According to Accenture's recent study, 91% of consumers are likelier to shop with brands that offer relevant recommendations and promotions.
You may wonder: with the demand for a highly personalized experience, will consumers be willing to share their information?
Surprisingly, as long as your online store can provide a satisfying shopping experience, many customers are willing to share their data. 83% of surveyed consumers are willing to share their data to create a more personalized experience.
Product recommendation trend #3: product recommendation failure will badly hurt your business
Failing to provide personalized product recommendations will shoo your visitors away. 74% of consumers are frustrated by website content that isn’t personalized.
This also hurts your conversion rate and revenue in general because 66% of consumers say they would stop making a purchase when encountering content that isn’t personalized.
What exactly are those “fails” in product recommendations anyway? It’s when:
- Your store suggests a product that a customer has already bought: Do you even track it? Does their purchase history mean nothing to you?
- Your store suggests a product that is out of stock or no longer in sale: Isn’t it frustrating to get excited about nothing?
- Your store doesn't update in real-time for product recommendation: Like when you display an On-sale right now widget with a number of discounted items but when visiting the product page, that item still displays the original price.
- The most annoying fail: is when your store displays random product suggestions that don't match the user's purchase history.
- And lastly, your store’s recommendation widgets are visually ugly.
How to implement product recommendations on Shopify stores efficiently?
There are a number of considerations you should make before settling on a product recommendation tool for your Shopify store.
Think about how many product-recommendation methods you need
When choosing a solution for your Shopify site, consider using multiple types of product recommendations. Using a variety of approaches, such as content-based filtering, collaborative filtering, and hybrid recommendation, can lead to more tailored and useful results.
Data filtering techniques are essential for product recommendation systems. Hybrid recommendation, which combines the strengths of content-based and collaborative filtering methods, is commonly used in modern engines.
To maximize revenue from product suggestions, it's important for Shopify merchants to pay attention to algorithms and their store's loading speed.
Evaluate the features of your chosen product recommendation engine
When choosing a product advice tool for your Shopify store, it's important to look at each one's features to see which one fits your business needs the best.
These features include different kinds of recommendations, AI integrated or rule-based, personalization level, customization choices, intuitiveness of user interface, reporting and analytics, and customer support. There are many to name.
Some types of recommendations are similar goods, items that are often bought together, and items that have recently been viewed. Personalization lets you make suggestions for each customer based on what they've looked at and bought in the past. The product selection tool will work well with your Shopify store if it is integrated with Shopify.
Product recommendation types are crucial for your business marketing strategies. Reporting and analytics are also important to consider as they let you keep track of how well your product suggestions work and make choices based on insightful data.
Veteran tips on implementing product recommendations on your Shopify store
Put your best-selling items in front and center
Best-selling items can be an effective Shopify product recommendation strategy thanks to social proof, user experience, increased sales, and brand awareness.
Social proof increases the likelihood of customers purchasing the product, while user experience increases customer satisfaction and repeat business. Increased sales lead to increased cross-selling and upselling opportunities.
Bestsellers vs. Personalized Recommendations
While these two are among the most popular recommendation types, their effectiveness depends on your product marketing strategy.
The bestseller collection is more for first-timers and new visitors to your Shopify store. That’s why you should place a Bestseller widget on your homepage instead of your product pages.
Meanwhile, a more personalized recommendation widget like “Suggested for you”, “Others also bought”, etc. are more suitable for collection pages or detail pages.
If your store's search query returns no results, showing a "Related products" recommendation widget with items similar to what the customer is looking for is more effective than showing a "Shop the best selling items in store" recommendation.
Go with an AI-powered product recommendation tool with full-fledged options
AI-powered recommendations are the future of eCommerce as they are changing the game to level up online shopper experiences. Boost AI Search & Discovery combines product intelligence with AI technology to create personalized suggestions that are tailored to each individual online shopper.
Explore all about Boost AI-powered and rule-based recommendations:
With 8 different product recommendation types (Frequently Bought Together and Related Items are AI/ML-powered), insightful recommendation analytics (on the way!), transparent algorithms with controls, intelligent segmentation, and code-free implementation, you have everything you need to boost your store AOV and revenues - all in just a single Shopify recommendation app.
Experience is the strategy! Deliver the best shopping experiences via smart product recommendations, effortlessly set up and monitor with Boost AI Search & Discovery!