In lots of articles on the web about recommendation engines the terms Personalization and Recommendations are used equivalent whereas they are definitely not.
This blog post will shed some light on the difference between recommendations and personalization and how to distinguish both.
Generally speaking, personalization is the generic term for recommendations. Or expressed differently: product recommendations are one possible personalization method.
According to Personalization “consists of tailoring a service or a product to accommodate specific individuals, sometimes tied to groups or segments of individuals”. That means making websites or products more individual and out-standing. In general personalization leads to a higher emotional linking of the customer to the website or product and therewith to more revenue for the merchant.
Hyper-Personalization vs. One-size-fits-all
In the beginning of the E-Commerce era online shops looked the same for every visitor. Unfortunately nowadays – except for larger retailers – there hasn’t changed much. And that means a lot of lost potential: would you shop in an offline store if no shop assistant is in there? If no one provides you with an individual advice on which product to choose, where to go to in the store, which size to try, and so on?
Of course even in the offline era merchants recognized that this one-size-fits-all approach does not work very well. In contrast if you make every single part of your store or website individual to the customer it is often referred to the term “Hyper-Personalization”.
A detailed explanation of static versus dynamic recommendations can also be found in our blog post about The Power of Individual Recommendations.
Product Recommendations – How Does it Work?
Recommendations became most popular when Amazon introduced them for their E-Commerce shop in the early 2000s. The well-known “Who bought this also bought” product sliders offer a selection of products by comparing each individual customer profile to other customers. This algorithm is so-called “collaborative filtering”. Nowadays of course this technique has emerged into some more advanced features with the help of predictive analysis and machine learning.
To grasp the difference between recommendations and personalization one can easily see that individual product recommendations are a form of personalized content on the website.
What Other Kinds of Personalization Methods are There?
If you have read the blog post until here, you understand the difference between recommendations and personalization and that personalization is a more wider topic. That’s why there are lots of other possibilities for personalization. Some of them are for example:
- Simply showing the customers name after login is also a form of personalization
- Offering different banners, landing pages or complete shop layouts for men and woman or for kids and adults
- Displaying nearby stores by using the customers location
- Personalization or customization of products: that’s when the customer can individualize the product he wants to buy, for example photo books, plates with custom text or printed t-shirts
In the end, tools like the Recolize Plug & Play Personalization offer advanced personalization features that consist of product recommendations or last viewed products for any content.