WSJ has an article yesterday “We Know What You Ought To Be Watching This Summer” (subscription required) on how e-commerce sites are benefiting from deploying a new generation of recommendation systems. These new systems try to recommend products based on a sense of your “taste” that may not be obvious from statistics alone. These systems are working and providing concrete business results.
Since adding the software, Blockbuster says it has lost fewer customers, in percentage terms, to rival services, and the number of movies in the average customer’s “to watch” list has grown by almost 50%.
Overstock.com is using these new systems in its email advertising to its customers.
The targeted emails have increased the rate at which email recipients go on to make a purchase between 25% and 50%, says [Overstock.com CEO] Mr. Byrne.
Sucharita Mulpuru, a senior analyst at Forrester Research, claims that companies that implement these recommendation systems usually see at least a 10% bump in sales.