How Recommendation Systems and AI Can Increase Sales

Have you ever been in doubt about what to watch on Netflix or other streams to the point of giving up on this programming? This feeling is common. Therefore, these companies are increasingly investing in recommendation systems and Artificial Intelligence (AI), which also help the online store. Did you know?

That is, these technologies recommend items based on the public’s interests. Thus, it is as if the consumer had an extra “push” to encourage consumption. This is important because, especially on the internet, the customer receives numerous stimuli that can distract them from purchasing.

Do you want to understand more about the relationship between the recommendation system and data and AI with an e-commerce? Continue reading!

What is the recommendation system?

First, know that the recommendation system consists of computational techniques that optimize digital search for users. This occurs from data analysis, AI and algorithms. These interpret the audience’s interests and needs based on how they navigate digitally.

That is, the way it operates on the web serves as information, collected to serve as a reference in the selection of displayed items. For example, if you search for plants on Instagram, you might notice content related to them appearing.

How does the recommendation system work in e-commerce?

In the last topic, you understood what the recommendation system is and saw a practical example of it on social media. In e-commerce the operation is very similar. In other words, first there is the collection of information to create a user profile.

This is carried out based on other customer searches, which can generate explicit or implicit data. For example, if he explicitly searched for ‘’MDF furniture’’ on Google and on social media, the data generated signals interest in the product.

Meanwhile, implicit data is produced spontaneously by users. This is the case of clicks on pages, length of stay, interactions in publications, etc. This behavior leaves traces on the web. Therefore, the recommendation system starts to recommend items similar to those searched.

What are the benefits of recommendation systems and AI for e-commerce?

After knowing how the recommendation system and AI works in e-commerce, the next step is to monitor its benefits. Check it out!

Increased ROI (Return on Investment)

For an e-commerce to make its investments worth it, it needs to have customers who buy its products. By facilitating this process with the help of the recommendation system and AI, the ROI is high.

An example of this was a case from Artycs for a banking and insurance client. The objective was to increase sales with the help of the solutions mentioned. As a result, there was an ROI of R$504 for every R$1 invested in the project.

Greater customer and employee engagement

By providing better experiences for your audience, it is easier to increase their engagement. Along with this, the results achieved also motivate employees in the business. This is what happened with our success story mentioned.

Greater monitoring of customer profiles

The recommendation system and AI helps with customer segmentation, such as separating them by stage in the consumer journey. Therefore, it becomes easier to monitor the evolution of each user and measure business performance. Furthermore, this is useful for promoting targeted actions.

As seen, the recommendation system and AI offer many benefits for e-commerce. These reflect directly or indirectly in increased sales. Therefore, investing in these technologies increases the competitive advantage of your online store.

So, do you want to know how we at Artycs can help you put the recommendation system into practice? Contact us and find out!