How to Increase Conversion Rates with AI-Powered Product Recommendations

It's common practice for an eCommerce business to look for ways to increase conversion rates. And one of the best ways to do that is using AI-powered product recommendations.

With AI-Powered Product Recommendations, brands can provide their customers with personalized product recommendations relevant to the individual needs and interests of each. This can help businesses boost sales, improve customer satisfaction, and build loyalty.  

But how exactly do AI-Powered Product Recommendations work? And what are some of the best practices for using it to increase conversion rates?  

Keep reading to learn everything you need about using AI Recommendations to increase conversion rates.  

What are AI-Powered Product Recommendations?  

AI-powered product recommendations are recommendations personalized for each customer. Product recommendations and predictive customers service are the top two personalization uses in marketing. They consider the shopper's individual needs and interests when making recommendations. 

For example, if you're a customer who regularly buys women's clothing, an AI-powered product recommendation system would consider that when making recommendations. It would recommend products specifically tailored for women's clothing.  

On the other hand, if you're a customer who only buys men's clothing, the system would recommend products specifically tailored for men's clothing.  

In other words, AI-powered product recommendations are much more specific and tailored to the individual customer than traditional product recommendations.  

Find out more about understanding a customer’s intent for engaging with your brand. 

How Do AI-Powered Product Recommendations Work?  


AI-powered product recommendations work by considering the customer's individual needs and interests. This information is used to recommend products that are relevant to the customer.  

The first step is to collect data about the customer. Customer data can come from a variety of sources, including:  

• Customer's browsing history
• Customer's search history
• Customer's purchase history
• Customer's demographic information

Once this data is collected, it's fed into an AI algorithm. This algorithm analyzes the data and identifies patterns.  

Based on these patterns, the algorithm makes recommendations to the customer. The recommendations are displayed to the customer on the website or app.  

How Can AI-Powered Product Recommendations Increase Your Conversion Rates?  

AI-powered product recommendations can have a significant impact on conversion rates.  

That's because they're highly relevant to the individual customer. They consider the customer's unique needs and interests when making recommendations.  

This relevancy is vital. Studies have shown that relevant product recommendations can increase conversion rates by up to 30%.  

On the other hand, irrelevant product recommendations can decrease sales. In one study, 74% of respondents said they would be less likely to buy from a company if they were shown irrelevant product recommendations.  

In other words, if you want to increase conversion rates, you must ensure that your product recommendations are relevant to your customers. And that's precisely what AI-powered product recommendations can help you do.  

How to Get Started With AI-Powered Product Recommendations  


If you're ready to start using AI-powered product recommendations, there are a few things you need to do.  

First, you need to select an AI platform. There are many AI platforms to choose from, so take your time and select the one that's right for your business.  

Next, you need to implement the AI platform. This implementation will vary depending on the platform you select. But in general, you'll need to integrate the platform with your website or app.  

The common areas you can use product recommendations to have a direct business impact are:  

• Trending products
• Top picks for you
• Suggestions for you
• Similar recommendations
• Complete the look
• Brands recommendations
• Customers also purchased
  

 



Benefits of Using AI-Powered Product Recommendations  



When we talk about customer experience, AI and ML are among the most sought-after technologies that facilitate 1:1 personalization.  

There are many benefits of using AI-powered product recommendations. Here are some of the most notable benefits:  


• Improve customer satisfaction
• Build customer loyalty
• Increase the average order value
• Reduce customer churn

Besides these, the stats that advocate the benefits of AI-powered product recommendations are mentioned below: 


• Number of businesses adopting AI has increased 270% in the last four years
• 62% of customers are willing to submit data to AI to have better experiences with businesses
• Around 44% of organizations agree that they saved operational costs with AI
 
Conclusion
AI-powered product recommendations are a powerful tool that can help your eCommerce businesses increase conversion rates. They're relevant to the individual customer and consider the customer's needs and interests while curating experience for them every single time. 

You're missing out on converting more sales if you're not using AI-powered product recommendations. So, to push potential browsers to make a purchase from your brand, you need to start leveraging the power of AI-powered search. 

If you want more insights into building 1:1 personalization for your brand, you can write to us at marketing@altudo.co and we will connect you with our commerce experts for a no-obligation session.