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The Value of Recommendations for Your Business

The Value of Recommendations for Your Business

Avatar Arkadiusz Krysik
21 January 2021
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Business value of recommendation system

The eCommerce market is one of the most dynamically developing branches of the economy in the year 2021. Every day, new online stores are opened offering products from numerous categories. It is facilitated by various types of SaaS eCommerce platforms such as Shopify, Big Commerce or Idosell, which offer owners a simple and intuitive process of setting up and managing an online store without the need for specialist IT knowledge.

All this significantly lowers the barriers of entering the online sales market, and, therefore, results in a significant increase in competition. Because of this, online store owners need to make their stores stand out from the crowd. The first good step may be to implement personalized solutions.

What are personalized product recommendations?

Product recommendations, in a nutshell, are based on the idea of presenting your customers with products that they most likely might like. Chances are that the customer will want to make a purchase. Algorithms based on artificial intelligence technology and machine learning are responsible for the selection of displayed recommendations. These systems analyze the database of products available in a given store, customer preferences, and the history of their sessions. Based on this data, a list of accurately selected products is generated.

As compared to classic systems, in which the owner or manager has to manually create a list of recommended products, the AI-based system makes it possible to automatically display to each customer individually the products chosen especially for them in real-time. We wrote more about how the algorithm works here.

Product recommendations in the largest eCommerce platforms

The majority of the large eCommerce websites on the market, such as Amazon or Aliexpress, have their own systems of personalized product recommendations. These are complex systems built from scratch specifically for a given platform and have been bringing great benefits for years. Amazon claims that around 35% of its revenue is generated thanks to its proprietary recommendation engine. Engines of this type are able to collect and analyze enormous amounts of data about customers, their behavior, and preferences, as well as generate lists of recommended products for each user on an ongoing basis. As a result, the navigation process through the store's tabs is significantly simplified, and the average value of the customer basket increases thanks to complementary product recommendations.

The process of operation of modern recommendation systems is impressive, but the costs of developing and implementing such tailor-made systems are very high and only the largest eCommerce platforms on the web can afford them. Does this mean that personalized solutions of this type are reserved only for the largest players on the market? Nothing could further from the truth. There are many off-the-shelf solutions, such as Recostream, that offer virtually all the functionalities of the recommendation engines of large online stores and simple integration at a fraction of the cost of these systems. Thanks to the possibility of integration with any eCommerce platform on the market (whether SaaS or Open Source), the owner is able to install this type of system without having IT knowledge.

plusy posiadania silnika rekomendacji na stronie sklepu internetowego

What are the benefits of implementing the recommendation engine on the store's website?

The largest benefit of implementing personalized recommendations on the online store's website is increased sales and higher conversion rates. Many tools, however, trying to prove their effectiveness, provide difficult to verify data. ECommerce site owners can expect that having implemented the system, about 10% of products added to the basket will come from recommendations, and 7% of clicks on the recommendation will ultimately lead to a purchase.

These are significant results, and considering the fact that they can be achieved at a relatively low cost and with virtually no effort, the implementation of personalized recommendations should be high on the list of solutions to be introduced by any online store owner who wants to maximize their revenues. Moreover, research shows that 79% of online shoppers spend 50% of their time browsing the information store tabs before making their final purchase. This means that the implementation of a personalized recommendation system can have a positive impact on the ease of navigation through the store's tabs, accelerate the choice of products by customers and improve their overall experience with the site.


Evergage research clearly shows that customers of eCommerce sites with installed recommendations are approximately 56% more likely to repeat purchases compared to the sites without such solutions. Considering the growing competition on the online sales market, the optimization of the store and the use of various tools to maximize profits should be a priority for every entrepreneur operating in this area.

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