September 29, 2009, 12:00 AM

Relevant product recommendations boost average order value and sales, study says

Recent research conducted by MyBuys found that online retailers boosted average order values and sales when they placed consumer-generated product reviews in shopping carts, product pages and other areas of e-commerce sites.

The idea is simple: Based on what a retailer knows about a shopper, or shoppers overall, through purchase history and e-commerce site behavior, a product recommendations system displays products it believes a shopper might like.

But do product recommendations work?

In recent research it conducted using results from 130 of its retailer clients, product recommendations and personalization technology vendor MyBuys Inc. says they do-and then some.

On average, the retailers, 40 of which are in the Internet Retailer Top 500, realized a 915% increase in conversion of products recommended in displays in the shopping cart over the conversion rate for the e-retailers overall. There was a 474% increase on recommended products displayed on category pages over the e-retailers’ overall site conversion rate, 411% on product pages, 307% on order confirmation pages, 248% on home pages and 192% on search results pages.

When product recommendations are based on solid customer data and show the most relevant products, they can be an effective tool in boosting conversion, average order value and sales, says Lisa Joy Rosner, vice president of marketing at MyBuys. The shopping cart is an especially effective page on which to display recommendations, she adds, because it showcases other products next to what a customer already has chosen to buy and because it is the perfect place for impulse buys.

“When you’re looking at a pair of pants on a product page, it’s good to see other pants possibilities. But in a shopping cart, once you’ve selected your pants and a shirt, it’s enticing to see belts and shoes that go with the pants and shirt. It’s like candy at the checkout counter,” Rosner says. “When you put the right products at the right price point in a personalized manner and in the context of what they’re buying-that’s why we are seeing a 915% conversion rate increase in the shopping cart.”

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