Emerging Technologies: Recommendation System

Analysis of behaviors based on past preference

An AI-based recommendation engine gathers customer data, analyzes it, and generates customized recommendations based on that data. The systems rely on both implicit and explicit data, such as browsing histories and purchases

Rapid Increase of Recommendation Systems across different areas

With massive expansion of recommendation systems for past 4-5 years, they have the potential to change the way websites communicate with users and to allow companies to maximize their ROI based on the information they can gather on each customer’s preferences and purchases.

Recommendation System is a valuable tool to companies such as Amazon

The Amazon.com website uses recommendations as a targeted marketing tool. Upon clicking “your recommendations,” a customer is directed to another page where recommendations can be further filtered by subject area, product type, and ratings of previous purchases. It is even possible for the customer to see why a particular product was recommended. According to Mckinsey, 35% of the revenues are churned thanks to recommendation engines.

Potential Benefits of Recommendation System

• Provide increased sales without extra marketing effort
• Improves user engagement by recommending appropriate options even before customers make a choice
• Increase loyalty to make customers make future purchases from same site