June 13, 2008, 12:00 AM

Online consumers expect personalized product recommendations

While many consumers expect online merchants to provide personalized experiences and product recommendations, most online retailers have not invested in personalization technology, according to a new report from The E-Tailing group.

 

While many consumers expect online merchants to provide personalized experiences and product recommendations, most online retailers have not invested in personalization technology, according to a new report from The E-Tailing group.

Shoppers find value in personalized recommendations because they are convenient, save time and help them make better choices, The E-Tailing Group found in a recent study commission by MyBuys.com, a provider of personalized product recommendations. Convenience is more of a factor for women (71%), while men have higher expectations that personalization will be based on past purchases (42%).

By adding personalization, online retailers can increase sales and customer loyalty, the study found. 77% of consumers report that they have made additional purchases when online retailers made personalized product recommendations. More than half of consumers say they usually pursue these recommendations when offered, according to the report. 36% say they are more loyal to retailers that provide true personalization in the shopping experience.

“Our research shows that consumers value the convenience, time savings and ease they get from a more relevant interaction with a merchant,” says Lauren Freedman, president of The E-Tailing group. “The growth of e-tailing over the past decade has created an entirely new set of expectations on the part of consumers around the level of personalization in their shopping experience.”

But only 2% of the consumers surveyed reported that products suggested to them online are based on their individual purchases and behaviors. And while merchants almost universally recognize consumer demand for personalization, most have not made the technology investments necessary for personalized product recommendations.

Only 41% of the merchants surveyed say they have an upcoming initiative for personalization, and more than a third say they lack the resources to make personalization a higher priority. 79% of merchants that don’t attempt to personalize the online experience still rely on manual methods for providing product recommendations to online shoppers.

The E-Tailing group surveyed 1,345 online consumers and conducted one-on-one interviews with 24 merchants for the report.

 

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