PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
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In addition to product recommendations, there are other forms of personalization retailers build and vendors sell. But none is as tried and true as recommendations, experts say.
For instance, some retailers use a customer's site behavior data to tailor the web site presentation to different types of shoppers. If John visits books and DVDs most of the time, the site will slowly start altering how it builds his pages, on the fly, so that books and DVDs are stressed on each page. This can lead to a happy customer—and very rundown e-commerce staff.
"It is a lot easier to provide product recommendations for personalization," Forrester's Mulpuru says, "because most sites have huge catalogs of products and it is easier to pick a product and show them that, rather than try to create all this fancy page content which is a lot of effort for not much reward that is not scalable. Product recommendations continue to be predominant because they are scalable, useful and effective."
One-third of the Top 500 retailers used recommendations last year, one-half do this year. That number likely will continue to increase because so many retailers are finding that personalization works. Merchants without recommendations are potentially ceding an edge to competitors personalizing e-commerce.