E-Commerce Platforms Need Intelligent Recommendations

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On Monday I told you how to write content that will bring traffic to your site. Yesterday I told you how to use newsletter marketing to keep in touch with your customers and to turn on-the-fence visitors into customers. Both of those are pretty easy to do with a content management system like WordPress. Today I want to tell you about a piece of functionality that's much harder to implement but is so incredibly vital to e-commerce that all of the top 10 e-commerce sites on the Internet use it. I'm going to talk to you about intelligent product recommendations, the kind you see all over Amazon.com.

Let's Talk About Amazon

One of the reasons that Amazon is still in business today is that they offer very competitive pricing in just about every industry. In fact Amazon's  very small markup on their products, is only 15% on average, compared to Walmart at 32%, Target at 46%, and Macy's at 80%. So how can you possibly have such small margins and still be profitable? Make more of your visitors convert & make them purchase more items. And you can do this with intelligent product recommendations, that's why 70% of Amazon's home page is personalized recommendations based on your previous purchases and related products.

Product Recommendations for Your E-Commerce Platform

Amazon does a great job – but they also have a huge development team that they can use to customize their recommendation engine however they need. You, on the other hand, probably don't have that capital and you want a plug and play solution. Unfortunately depending on the platform you use this can be very expensive that's why if you're just starting out make sure you can manually set up related products.

Manually Set Upsells & Cross-sells

For any serious e-commerce platform there should be a way to manually set related products. If you're selling a DVD you probably want to upsell the visitor to the platinum DVD set. Or if you you're selling clothing you probably want to cross-sell the floral shirt with the floral pants. If you don't have a way to do this you're missing out on bigger orders.

Automatically Recommend Items

Manually setting upsells and cross-sells is of course time intensive. The bigger your store gets the more you'll want to automate this task. Look for platforms that monitor the view history, purchase history, and products that are frequently purchased together. A recommendation engine can update these on the fly and serve the most relevant results to the customer.

Computation for Intelligent Recommendations

A word of caution about recommendation functionality that runs on your own server. It takes a lot of computation power. If you want to take full advantage of this functionality make sure you're not using a cheap hosting plan or look into 3rd party services like GraphFlow that do the computation for you. GraphFlow is a startup that plans to offer recommendations and take a cut from each recommended product that was purchased. They only make money when you've made money. I love services like that since your values are aligned.

Happy product recommendations!

Photo Credit: shaggy359

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