The Problem with Product Recommendation Engines
If you live a good part of your life on the internet like I do, there’s a good chance you’ve heard of Amazon.
Being the retail juggernaut, Amazon is known for continually raising the bar with constant innovation through high tempo experiments that improve user experience and increase average order value.
Did you hear about their new grocery stores too? – image source
But one of Amazon’s core innovations is broken: the product recommendation engine, or the innovation responsible for a 35% lift in revenue (according to McKinsey).
Sounds crazy right? But hear me out.
The technology behind product recommendation engines (and not just Amazon’s) is outdated and based around touch points of data that don’t tell the full story of the visitor:
“The retail giant’s recommendation system is based on a number of simple elements: what a user has bought in the past, which items they have in their virtual shopping cart, items they’ve rated and liked, and what other customers have viewed and purchased.”
Product Recommendation Engines represent the primary tool that materialized from revolutionary idea of Personalization back in the day. It was the internet’s first attempt at creating a one to one approach to marketing.
But there was a key ingredient missing: Consumer Intent.
And without the addition of consumer intent into the personalization formula, both Personalization and Product Recommendation Engines have failed to achieve the goal they set out to achieve: a truly personalized experience.
It’s Time to Get Smarter
The truth is that product recommendation engines, as they are today, can and do create more distractions throughout the conversion journey than they provide value.
And considering the already very-distracted state of multi-tab-using internet browsers today, the question becomes this: why are we further hindering those visitors who have high enough intent to make it to a product page?
I’m not saying that product recommendation engines are completely to blame nor am I saying that they are bad. They could just be so much better.
Currently, Product Recommendation Engines are product-based, focused only on either previously purchased products or products currently in cart.
But there’s so much more to creating a personalized experience than that. They don’t consider what happens before, during, or after the visitor enters and leaves the site.
More importantly, Product Recommendation Engines can only track whether or not an individual has landed on a page. They completely ignore the individual’s current (and hopefully growing) levels of conversion intent.
It’s Time to Use People-Based Marketing
If you want to transform your product recommendation engine into a truly personalized marketing engine, then you need to start looking at People-Based Marketing:
“People-Based Marketing enables brands to create a cohesive marketing system, centered around the individual consumer and anchored by the collection of real-time behavioral data combined with first party brand data. With People-Based Marketing, brands can ingest and respond strategically to consumers in real-time across devices and channels, unifying the customer journey, unlocking a new source of revenue, and achieving a truly omnichannel business.”
So, instead of bucketing individuals into groups, as with traditional product recommendation engines, People-Based Marketing tailors everything to the individual visitor.
Are you beginning to imagine the performance difference?
Let’s take a quick look at how People-Based Marketing works in the traditional brick and mortar retail store:
You’ve experienced this before – image source
But this sort of experience doesn’t always translate to the internet, leaving you with an experience that often looks something like this:image source
As you can see, visitors express their interest through the actions they take onsite. However, without any guidance, it’s likely they’ll abandon.
People-Based Marketing, a type of Behavioral Marketing, essentially takes the form of a digital sales associate, holding the visitor’s hand as they take the steps toward a purchase.
Based on the displayed intent of the visitor, the website is able to adapt in real-time, motivating the consumer to move deeper into the conversion funnel.
The people-based approach creates a digital footprint of each one of your visitors, incorporating a combination of behavioral data and historical data in order to understand how that user should be treated.
In other words, People-Based Marketing relies on data that Product Recommendations and other personalization tools aren’t privy to. It does more than merely provide distracting product recommendations. It humanizes your digital business, adapting to the visitor in question and tailoring the onsite experience to their digital body-language.
And it all starts with a single digital identifier. That unique ID is what people-based marketing uses to overcome the challenges that limited the ideas behind Personalization to product recommendation engines.
According to BounceX’s Manual To People-Based Marketing: “Once you’ve captured your identification of choice, you’ve tapped into the ability to associate the actions an individual takes when engaging with your business to that single identifier.”
Armed with this information, you can quickly see how people-based marketing can outperform any product recommendation engine.
By building a robust list of behavioral data points tied to that unique identifier, you can tailor unique experiences and messages (both on and off your website) to each individual engaging with your business, unlocking incremental value from every one of those visitors as a result.