6 Key Success Factors for Your Online Shop
What are the key issues that online retailers should resolve to prosper? We identified five key areas that will help you to enhance your profits.
Product recommendations can be found in almost every online shop. They can be implemented in different ways with different tactics and strategies behind them. No matter which method you choose, if done correctly, the end result can really impact your sales.
What are product recommendations?
Product recommendations are a method for an online shop to recommend specific products to the users browsing their site.
This can be put into action through a variety of channels from widgets on your website to pop-ups and email marketing campaigns.
These product recommendations are based on an algorithm that determines what products to display. Depending on your goal, you might display alternative products, complementary products, or product bundles. This automated process usually takes user behaviour, purchase habits, and a user’s individual history into account when recommending other products.
Here is an example of a product recommendation widget at the bottom of product page.
Source: Desenio
Many shop software providers like Shopify and Magento offer their users some options for product recommendations. Usually, these tools are available as add-ons that can be found in the provider’s “store”.
Deciding which ones to show at the different points of the customer journey can impact their effectiveness. Thus, your strategy will be important. Remember, every shop is different, so it might be worth A/B testing some different options. With that said, let’s look at some of the most common product recommendation strategies.
Product recommendation strategies
Product recommendations are really about showing the right product to the right person at the right time. They can be implemented not only on your website but in your ads and email campaigns as well.
Cross-selling
We’ve covered the topic of both cross-selling and upselling in detail in our article, but here’s a quick summary:
In essence, cross-selling is the art of offering complementary products to your shoppers.
This means you’re showcasing the products that go together with whatever the user is planning to purchase. For example, if your shopper places a smartphone in their shopping cart, you’d recommend a compatible phone case or a wireless charging dock.
If you’ve ever shopped on Amazon (or other marketplaces), you’ve definitely seen cross-selling in action. In fact, no one does it to the level that Amazon does. In the following example, the product page cross-sells by displaying a “Frequently bought together” section as well as a “Products related to this item”.
Cross-selling can be done in a variety of ways and at different times during the customer journey. Often it is done right after the user adds a specific product to their shopping cart (e.g. with a pop-up). However, you can also include cross-selling widgets towards the bottom of your product pages. You could even recommend products in the shopping cart as a reminder before checking out.
Upselling
Upselling goes hand in hand with cross-selling. The difference here is that you will promote an alternative product rather than a complementary one. What puts the “up” in upselling is that you recommend more expensive products than the one the user is considering.
Source: Erzgebirge-Palace
Because you’re essentially trying to convince them to buy a different product, upselling usually occurs directly on the product page as a widget and not after a product has been added to the cart.
Nonetheless, upselling can be very effective at boosting your average order value and is worth taking up some real estate in your product pages.
Down-selling
As you might suspect, down-selling is very similar to upselling. However, in this case, you’ll offer alternative products that are less expensive than the product the user is considering.
Shutterstock/Aleksandr Kondratov
Although this may seem counter-intuitive, it can be quite effective. Many shoppers consider price when they’re shopping. Offering them a cheaper alternative can make the difference between completing the purchase on the spot or thinking about it longer and starting their product search all over again.
Recommended reading:
How to Stand Out When Competitors Sell the Same Products
Dedicated landing pages (gift guides)
Creating dedicated landing pages can be a great way to recommend products.
This can be particularly useful when it comes to gift-giving. Whether it’s Christmas, Valentine’s Day, Mother’s Day (and no, I didn’t forget Father’s Day), there are plenty of events that require us to buy gifts for others. Creating a gift guide on your website can be seen as really useful for many shoppers.
For example, you could create a Father’s Day gift guide. The landing page could present gift ideas by “dad categories”. For example, “sporty dad”, “dad-chefs”, and “dad-joke dads”.
In the example below, Dotty Fish has permanent gift guides implemented in their navigation (e.g. “Gift sets” and “New baby”). However, they also have seasonal gift guides depending on the time of year. Here is a Christmas gift guide of theirs:
Ads
Product recommendations often take place outside of your website. By advertising to the right users on the right platform, you can drive plenty of relevant traffic to your website.
On social media, for example, having an attention-grabbing visual ad is extremely important. However, equally important is your audience-targeting strategies.
You may have heard about retargeting. This is the act of sending ads to users who have already interacted with your website. They may or may not have purchased something already (targeting previous customers is usually referred to as “remarketing”), but these users have engaged in one way or another. Their specific history will dictate if they are shown a previously visited page or a new product altogether.
In the example below, the Facebook ad shows a product catalogue, an engaging way to display multiple product recommendations.
Knowing your audience is key. If your main demographic follows certain accounts or pages, this could be a perfect targeting option. That’s why it’s important to stay in touch with what’s happening in your niche. Whether it’s a trend in the industry or a beloved influencer, you should keep your finger on the pulse.
Email marketing
If you have an email list of users who want to be informed of upcoming sales and your products via newsletter, you might already be doing this. If not, you should be.
Just like many email marketing platforms, you can segment your email lists by different customer groups. For example, by gender, age, products purchased, or location.
This segmentation is extremely important. Ensuring the right products are being promoted to the right users will not only impact your conversion rates, but it will also be less likely to annoy your users. If your emails aren’t recommending useful products, they’ll unsubscribe or delete your email as soon as they see it in their inbox. User behaviour like this also impacts whether or not your emails are auto-filtered as spam.
In this example from Old Navy, they’ve sent a seasonal sales offer along with men’s product recommendations to users who have bought men’s clothing.
Extra tip: Customer reviews everywhere
No matter how you choose to recommend a product, building trust in your products and your shop is important. With the focus on product recommendations, however, product reviews are what we’ll highlight here.
Star ratings are becoming the norm wherever consumers shop. And adding stars in your product recommendations increases the odds that the user clicks on it and continues browsing your product offers. This of course will improve your conversion rates, but also benefit your SEO.
Although there are many product review options out there (e.g. on Magento), it’s important to choose a system that helps you improve your online reputation across multiple channels. Remember, Google Ads that display stars have a higher click-through rate than ads that don’t. Therefore, it’s important to work with a Google-certified reviews provider, like Trusted Shops.
Conclusion
By displaying the right product recommendations at the right time and place, you can boost many of your most important KPIs, including average basket values and total revenue.
