Personalized experiences, powered by artificial intelligence, are the present and future of shopping – and far from a pipe dream. AI is already helping retailers anticipate their shoppers’ next moves, and intelligent experiences are quickly separating the innovators from the innovation-laggards.
Thanks to expanding product catalogs, increasingly multitasking mobile shoppers, and fierce competition, the need to deliver personalized content and intelligent recommendations couldn’t be more urgent. Retailers need to present shoppers with exactly what they want (maybe even before they know they want it) efficiently and in real time.
But this isn’t just best practice advice. The material impact of a personalization-centric strategy is profound. Our new Personalization in Shopping report looks at the impact of product recommendations across critical metrics like revenue, conversion rate, average order value (AOV), and time spent on-site. The data analyzes the shopping activity of more than 150 million shoppers and 250 million visits to ecommerce sites, encompassing $550 million worth of orders and 320 million clicks.
The report describes how to implement successful personalization tactics without an army of data scientists, and shares stories from retail trailblazers who have driven their businesses with AI-based personalization.
Here’s a rundown of highlights from the report. Download the full research for many more stats and charts.
Today, most visits to an ecommerce site don’t yield recommendation clicks, but the visits that do are highly productive. in fact, visits where the shopper clicked a recommendation comprise just 7% of visits, but drive an astounding 24% of orders and 26% of revenue.
Retailers have long surmised that recommendations were an important component of an ecommerce site, but this data shows how just how closely linked recommendations and high revenue are.
Fortunately, these high-value shoppers come back for more. Shoppers that clicked a recommendation were nearly twice as likely to come back to the site; 37% of shoppers that clicked a recommendation during their first visit returned, compared to just 19% for shoppers that didn’t click a recommendation during their first visit.
When one of these recommendation-clicking shoppers decides to buy, how does her order stack up? Purchases where a recommendation was clicked saw a 10% higher AOV, and the per-visit spend of a shopper who clicks a recommendation is five times higher.
Shoppers buy recommended items.
Personalized recommendations need to be more than window dressing. They must be functional, effective, and intelligent. So you may be wondering how many shoppers actually purchased what was recommended to them. Twenty-four percent of products bought by shoppers that ever clicked recommendations are the same products they clicked via recommendations, showing the influence of intelligent suggestions. More proof: More than half (52%) of orders from buyers that ever clicked a recommendation include one of those recommended products.
One reason that personalized recommendations work so well is because they guide shoppers through large product catalogs to the perfect product, or perhaps even a product they didn’t know they wanted. Another tool that helps shorten this time to product-finding nirvana is site search. Site search metrics are similar to the visit and revenue contributions of recommendations; 10% of visits are from shoppers engaging with site search, and those visits yield 25% of revenue.
All of these benefits are even more clear when you combine search with recommendations. Shoppers that use search and click a recommendation convert 3.7 times more often than those who only search — and 4.2 times more on mobile!
We know the journeys of shoppers that engage with AI-driven recommendations are unique, and that these shoppers are among your most profitable customers. This is reflected in how long they spend perusing a site. Shoppers that clicked a product recommendation spent an average of 12.9 minutes on-site vs. just 2.9 minutes for those who didn’t click recommendations.
Different devices mean different behaviors and strengths.
Shoppers value relevant recommendations and micro-moments, those short periods of time between activities, and personalization connects on-the-go shoppers with the best product for them in the shortest amount of time. Fortunately, recommendations are highly effective on mobile. Mobile shoppers that click recommendations complete orders at a higher rate than desktop shoppers (25% vs. 23%).
When we talk about smaller screens, however, it’s not only about mobile phones, although they get a lot of the press. Tablet shoppers that clicked a recommendation had a conversion rate of 7.3%, compared to 4.7% for mobile and 9.8% for desktop.
Visits by desktop shoppers that click recommendations are strongest when it comes to visit duration (15 minutes on average), conversion rate (9.8%), and their propensity to create a basket (24% do so).
So when looking at personalization across devices, it’s clear that every device matters and benefits from a personalization strategy.
Ready for more insights on the benefits of personalization and stories from retail trailblazers who lead the way? Download Personalization in Shopping.