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From Reacquisition to Retention - How AI-Powered Recommendations Can Transform Your eCommerce Strategy
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From Reacquisition to Retention - How AI-Powered Recommendations Can Transform Your eCommerce Strategy

Saanika Budhiraja
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Are you tired of spending money to acquire the same visitors to your eCommerce site? Are you seeing your conversion rate drop while you keep investing in marketing? The latest data shows that eCommerce conversion rates are at an all-time low of 1.64% in 2023. The cycle of reacquisition is a pain point in eCommerce, as it is costly and wasteful to continually try to win back customers who have already visited your site. But what if there was a way to break this cycle and keep customers engaged for longer?

Enter AI-powered recommendations. With the ability to hyper-personalise the shopping experience and show customers more products that are relevant to their interests, AI can create a seamless experience that keeps customers engaged and help them explore your store for longer. This, in turn, leads to your shoppers looking at more products, higher average order value (AOV), conversion rates, and a better ROI for your marketing investment.

Let's dive deeper into how AI-powered recommendations can help break the cycle of reacquisition and improve your eCommerce sales:

The Cycle of Reacquisition: A Costly Problem

The cycle of reacquisition occurs when anonymous shoppers or existing customers visit your site, browse products, and then leave without making a purchase. To win them back, you must spend money on marketing activities such as retargeting ads, or promotions. While these efforts may bring shoppers back to your site, they don't necessarily result in a purchase, and you're left repeating the cycle over and over again. This is not only costly but can also damage your brand reputation if customers feel bombarded with too many marketing messages.

An illustration of a man trapped in a hamster wheel, surrounded by flying money bills. The image symbolises the repetitive and costly nature of the cycle of reacquisition & retargeting in eCommerce

Product Recommendation Engines: A Solution to Break the Cycle

eCommerce recommendation systems offer a powerful solution to optimise the buying cycle in eCommerce. Instead of investing in expensive marketing campaigns to attract shoppers to your store, you can use AI to create a more seamless and personalised shopping experience, at scale, that keeps them coming back.

Think about it this way: in a physical store, you don't need to constantly pay to bring shoppers in the door. Instead, you provide a friendly shop assistant who offers a helping hand and makes personalised recommendations based on each customer's preferences. This positive experience makes them want to come back and shop with you. This same principle can be applied to your e-commerce store with AI-powered recommendations.

For example, imagine a shopper who is browsing for running shoes on your site. With AI, you can offer them personalised product suggestions based on what they’re looking at in real time. You can not only adapt to their style and taste as they move through the store but also provide relevant cross-sell with matching socks, water bottles, or fitness trackers. By offering a more tailored shopping experience, you increase the likelihood of purchase (conversion) and build a stronger connection with the customer, making it more likely they'll return in the future.

A friendly shop assistant in a physical store, helping a customer with personalised recommendations, similar to AI-powered product recommendations in eCommerce

Creating a Seamless Experience with AI

One of the biggest advantages of using artificial intelligence in eCommerce is the ability to create a seamless experience for anyone who lands on your site. By showing them products that are relevant to their interests, shoppers are more likely to stay on your site for longer, leading to increased engagement and a higher likelihood of a purchase. Using a platform that is truly powered by AI can provide a more personalised shopping experience for each customer, without any biases or manual interference. This can result in a more satisfying shopping experience overall.

Maximising ROI with AI-Powered Recommendations

Unlike retargeting tools that rely on browsing history, eCommerce stores powered by AI adapt to the shopper in real-time and display products that are relevant to their interests, increasing the chances of a purchase.

This not only creates a seamless experience for the customer but also reduces the need for costly marketing efforts to win them back. By providing a personalised shopping experience, customers are more likely to spend more time on the site, which leads to higher engagement and better results. As a result, conversion rates and average order value (AOV) are increased, resulting in a better ROI on acquisition spend.

In essence, AI recommendation tools serve as a friendly shop assistants, providing customers with personalised recommendations and enhancing the overall shopping experience. By doing so, retailers can spend their money on acquiring new customers instead of constantly paying to bring back the same visitors. This not only saves money but also protects retailer margins and profitability.

Challenges and Considerations for Adding AI to Your Online Store

One of the primary challenges in implementing AI in your eCommerce growth strategy is addressing data privacy concerns, ensuring accurate data analysis, and continuously testing and optimising to ensure effectiveness. However, with the help of a tool such as Shopbox, you can have peace of mind that your customer's data is secure and access the reporting you need to understand and improve performance.

In conclusion, breaking the cycle of reacquisition with AI-powered recommendations is a game-changer for eCommerce businesses. By creating a seamless experience and keeping customers engaged on your site for longer, AI-powered recommendations lead to higher AOV and conversion rates, and, ultimately, a better ROI for your marketing investment. So, what are you waiting for? Start exploring the potential of AI-powered recommendations for your eCommerce business today.


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