Increasing Revenue with Micro-Targeted Product Recommendations

Increasing Revenue with
Personalized Product
Recommendations
ChoiceStream, Inc.210 BroadwayFourth FloorCambridge, MA 02139617-498-7800www.choicestream.com
Executive Summary
Even amidst the global economic slowdown, the trend towards eCommerce presses forward, offering increasingly rare growth opportunities for innovative companies who are willing to take action. eCommerce revenue continues to grow-both as a percentage of overall retail spending and in absolute levels. However, capitalizing on this opportunity requires innovation and a willingness to experiment. As the long tail grows and more products and services become available, online shoppers Table of Contents can be bogged down by the nearly unlimited set of choices. That's why it is important to focus on finding ways to present your customers and prospects with Executive Summary..........................1 the products and offerings that are most relevant to them, including personalized product recommendations.Online Shopping and eCommerce is Increasing This whitepaper will:Dramatically .....................................2 . Detail how personalized recommendations on your eCommerce site can increase purchases, revenue and customer loyaltyWhat are Personalized Recommendations? How do . Show you how a large online retailer has seen a 14.3x ROI on its They Generate More Revenue?......2 recommendations spending in just five months, and how another company has seen revenue driven by recommendations increase by Success Stories.................................3 ®38% from using ChoiceStream RealRelevance Recommendations instead of its editorial-based approach.Measuring Potential Impact of Personalized . Demonstrate how to measure the potential upside of personalization Recommendations ...........................4 to your site
Conclusion..........................................6
About ChoiceStream.........................6
ChoiceStream: Increase Revenue with Micro-Targeted Product Recommendations 1Online Shopping and eCommerce is
Increasing Dramatically Despite a slowdown in overall retail sales, the online channel continues to capture an increasing share of consumer retail spending. Further, online shopping continues to grow in absolute terms-one of the few bright spots in the current economic environment for retailers. Some of the latest figures are as follows:
. In the third quarter of 2008, eCommerce represented 3.4% of total 1U.S. retail sales. The percentage has grown steadily since the U.S. Department of Commerce began reporting on eCommerce in 1999.
. U.S. eCommerce is expected to sustain a compound annual growth rate (CAGR) of 11% to 17% through 2010, and a CAGR of 8% to 210% through 2012, depending on the forecaster.
. In 2007, approximately 70% of U.S. consumers did at least some of their holiday shopping online, and the percentage is expected to be 3higher in 2008.
Though revenues from eCommerce are growing, so are challenges to online retailers. A new report from eMarketer notes that websites' relationships with customers are increasingly important and that online consumers' expectations are now higher than what many online shopping sites provide. Regardless of what type of product or service you sell online, catering to users' preferences and site expectations is a must.
How Can Personalized Recommendations
Generate More Revenue?Personalized recommendations are a great way to personally connect with each visitor every time he or she visits your site. They allow you to drive faster conversions, larger order size and increased profitability by presenting each consumer with product recommendations based on their preferences and shopping behavior and your inventory.
ChoiceStream is the market leader in personalization services for e-retailers. Recently named the company with the "deepest experience" and the "largest and longest-standing of the 'pure-play' personalization engines" by Forrester Research, ChoiceStream enables you to target each visitor with the products and services most likely to generate interest and prompt a purchase, as well as encourage shoppers to return to your site more often.
1. U.S. Department of Commerce | 2. JPMorgan, Jupiter Research, Forrester Research | 3. Turner Investment Partners