Annual ChoiceStream Survey Reports 31% More Shoppers Receive Poor Quality Recommendations on e-Commerce Sites; Quality Varies Widely Between Retail Categories

CAMBRIDGE, Mass.--ChoiceStream, the premier recommendations service provider for the world’s largest brands including Tesco, Zappos.com, Borders, Blockbuster, Ticketmaster and AT&T, today announced Part 2 of the findings of its 2009 Personalization Survey designed to help retailers align their recommendation strategies with consumer demands. According to the survey, the quality of product recommendations on retailers’ sites declined significantly year over year with many more shoppers reporting that they received poor quality recommendations in 2009 versus 2008. The survey also finds a large discrepancy in recommendation quality between retail categories with shoppers giving music and entertainment stores top scores while rating toy stores and office supplies at the bottom. (Part 1 of the survey findings was announced on January 20, 2010 and may be found at www.choicestream.com/surveyresults/part1.asp.)

Overall, the number of online shoppers who received poor quality recommendations in 2009 was 59 percent, which represents a 31 percent increase over the 45 percent reported in 2008. When asked for a reason why the recommendations were considered poor, the majority of shoppers responded that the recommendations were for products that were unrelated to what they were looking for.

Separately, shoppers were asked to rate the quality of product recommendations across 10 retail categories. On average, only 17 percent of shoppers rate retailers’ recommendations as ‘excellent.’ There is also a wide discrepancy in recommendation quality between the categories. For example, music and entertainment stores are 48 percent more likely to receive excellent ratings than toy or office supply stores.

"It's unfortunate, but not surprising, that so many consumers report receiving poor quality product recommendations. Consumers expect more from recommendations than they did even a year ago. They expect them to be accurate and on target, so when they're not, shoppers are disappointed," said Lori Trahan, vice president of marketing at ChoiceStream. "It's also true that as product recommendations become more pervasive and more recommendation providers enter the market to meet demand, these vendors lack the in-market experience necessary to create good quality recommendations. This should highlight for retailers the importance of working with solution providers that have deep expertise in analyzing specific shopping behaviors and factoring them into their recommendation strategy."

The actual ranking of the retail categories by recommendation quality appears below in order from best to worst:
            1. Music and entertainment stores (ex: iTunes, NetFlix)
            2. 'Big box' store (ex: Amazon, Target)
            3. Grocery stores
            4. Book stores (ex: Barnes and Noble)
            5. Electronics (ex: Best Buy)
            6. Shopping comparison sites (ex: Shopping.com)
            7. Department store (ex: Macy’s, JCPenney)
            8. Shoes
            9. Toy stores
          10. Office supplies (ex: OfficeMax)

“The categories that fared the best in this ranking are those that have the most experience in using product recommendations as part of their merchandising. Considering the complexities involved in delivering good quality recommendations, it makes sense that those with the most experience rise to the top,” said Steve Johnson, founder and CEO of ChoiceStream. “This ranking also shines a light on the upside potential for product recommendations. Retail categories with less experience with this type of merchandising have a great opportunity to lift revenue and, at the same time, improve their brand image as consumers increasingly come to expect good quality recommendations as part of the retail experience.”

For more information on the 2009 ChoiceStream Personalization Survey, click here. To learn about ChoiceStream product recommendations and how they help increase revenue for online retailers, visit our website.

About the ChoiceStream Personalization Survey

The ChoiceStream Personalization Survey provides insight into consumers’ interest in, and perceptions of, personalization. The survey was first fielded in May, 2004. Each year the Survey is re-evaluated and updated where appropriate to ensure that it stays relevant and addresses the current issues of the day.

This year, new questions address the interest in recommendations within various sales channels, the impact of the location of recommendations within e-commerce sites, and how shoppers perceive the quality of recommendations from various retail categories.

The Survey Research Brief provides detailed findings of the study and is now available at www.choicestream.com/surveyresults.

About ChoiceStream, Inc.

ChoiceStream delivers dynamic, personalized product recommendations and display ads that increase purchases and customer engagement for today's biggest brands, including Zappos, Tesco, Borders, Blockbuster, AT&T, and Ticketmaster. Recently named the company with the “deepest experience” of the ‘pure-play’ personalization engines” by a leading independent research firm, ChoiceStream enables retailers to put the right content and products in front of the right people at the right time to maximize the value of every interaction with consumers.
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