Impact of product personalisation and recommendation systems on E-Commerce
The Covid-19 pandemic affected the everyday life of people all around the world, seeing populations globally being obliged to shut themselves off from public life during lockdowns. This way of life hugely impacted people’s way of living and how they got things done.

A result of this transformation hugely impacted businesses, most notably E-Commerce. As this form of buying and selling goods became more prevalent, this also had an impact on product personalisation and recommendation systems for sales, customer loyalty and customer retention.

Changing behaviour

The Covid-19 pandemic radically altered many people’s shopping patterns and their behaviour as consumers. The boost in online sales can be attributed mainly to the pandemic and the fact that various health measures saw physical stores closing their doors for weeks on end.  

As a result, revenues from online sales soared from $3.46 trillion in 2019 to $4.29 trillion in 2020. The yearly growth of online sales recorded between 2018 and 2019 was 17.9%, a figure that increased to 24.1% in 2020.

Global E-Commerce revenues are projected to reach $5 trillion by 2022 and $6 trillion by 2024. However, despite the increase in global online sales and the clear prospect of increased profit by adopting E-Commerce, many companies have not been (fully) utilising the advantages and this change in behaviour.

The number of E-Commerce companies worldwide currently amounts to around five million, excluding China. Meanwhile, companies that are active in E-Commerce are running behind when it comes to relying on Artificial Intelligence (AI) to boost their business. In the United States of America, out of 583,000 businesses, only a few uses AI to run their business.

Looking at an analysis of several companies with more than 25 employees in the US, touch screens have only been adopted by 5.9% of companies, while machine learning is only used by 2.8% of companies and robotics is used by just 1.3%.

Around a quarter (24.8%) of the organisations with more than 25 employees have invested in AI of any kind. In the US, just 20% of companies uses AI in 2019, and globally, only 24% of the total E-Commerce companies started using chatbots in 2020.



Benefits of these technologies

Firstly, it can result in customers spending more time their websites when products are recommended to them. Product personalisation and recommendation also helps to eradicate the weaknesses of online shopping compared to physically shopping in a store. When customers go to shop in a physical store, they have the opportunity to see, feel and try on a large number of stocks that are displayed, and they can ask a shop assistant for help in person.


However, E-Commerce has the upper hand with the help of product recommendation, as it allows customers to find products that could be relevant to them in terms of style, based on the help of product personalisation, which relies on algorithms to track their previous purchases and searches.


A regression analysis was performed which  revealed that there is a linear relationship between product personalisation and recommendation and the recurring sales in the E-Commerce business.


An analysis carried out during the pandemic related to shopping behaviour and frequency of E-Commerce customers showed that this predictor was directly related to the dependent variable (shopping patterns and frequency of E-Commerce customer), highlighting that the pandemic has indeed affected shopping patterns and frequency of E-Commerce customer. However, it has also driven many businesses to adopt E-Commerce solutions to not only survive but also thrive in the post-pandemic world. Offering online shopping options has evolved from a nice addition to a necessity for businesses.


In conclusion, since 2020, the Covid-19 pandemic, when for any people the only option available was to shop for all their daily necessities online, has disrupted shopping behaviour.

Before the pandemic, there was a limited categories of goods that people preferred to buy online (e.g., clothing, accessories and electronics) however, things have changed, and some people now buy their food items online instead of going to the store.

E-commerce business can use this opportunity to increase the quality of the product they offer and how it is offer (website or app design) to attract more customers.



By Victoria Labisi Biodun-Bello, Consultant at Pink Bay


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