Groupon says its focus is on the bottom line, rather than top-line growth.
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Product recommendations rely on cookies to tie what a shopper does online with a unique identification number issued by the recommendations system. The system stores data anonymously by the ID number so it can generate individual recommendations or feed a larger set of data to generate group-oriented recommendations.
Many Internet users recognize the benefits of cookies, a recent study by JupiterResearch reveals. 25% of Internet users appreciate the convenience of not having to log in on return visits, 20% value the storing of information to reduce typing on forms, and 20% appreciate the storing of items in shopping carts. What’s more, 14% value the benefit of recommendations.
However, 55% of consumers delete cookies on a regular basis, ranging from daily cleansing to quarterly cleanup, the JupiterResearch study says. An additional 24% delete cookies sporadically, an overall increase in cookie deletion from years past. The most common method for deleting cookies is through browser settings, using default or predefined privacy settings to remove tracking cookies, the study says.
This would seem to present an obstacle for product recommendations vendors trying to build the profiles they use to make recommendations. Not so, the vendors say. They have built in workarounds.
“If your cookie is gone, we don’t care,” says Scott Brave, chief technology officer at Baynote Inc., a product recommendations vendor that provides recommendations based on group behavior. “If you delete your cookie and come back three months later, we’ll still be able to judge current shopping intent by your current online behavior and you’re still getting what the wisdom of the community says is the best recommendation, regardless of whether the site recognizes you.”
When it comes to making recommendations based on individuals’ online behavior, recommendations vendors using this method have included ways to keep an eye out for returning customers.
“When we see a new customer and give them a cookie, but in fact they are a returning customer, we can detect that we do know the customer but under a different ID,” says Paul Rosenblum, vice president of products and strategy at MyBuys Inc., a vendor of site personalization and product recommendations technology. “They will sign up for more alerts or log in to make a purchase-as soon as we get their e-mail address, we connect the old cookie and the new cookie and merge the two profiles together.”
The same goes for site personalization and recommendations vendor ChoiceStream Inc. “A shopper who deleted a cookie would be a new user until they log in to the site,” says Toffer Winslow, executive vice president of sales and marketing. “Our system then sees the old cookie ID number and links that to the previous cookie and merges the records.”
Winslow believes that as the web becomes increasingly personalized, Internet users increasingly may stop emptying their cookie jars. “Many people who delete cookies find as soon as they start doing that,” he says, “the user experience on the web is greatly handicapped.”