January 31, 2023

How Do Product Recommendations Work in ML?

By Ben Leder

Have you ever wondered, “How did my phone know I wanted to buy this?!” It’s almost as if your devices know you better than you do yourself. How can this be possible? This is no magic trick. It is a feat of Machine Learning known as the Product Recommendation System.

In this post, we will be discussing these systems and how they operate so that your organization can begin its journey of delivering new market value. Let’s go!

What are Product Recommendation Systems and Why do They Matter?

Customer Value

Product recommendation systems are software that use machine learning and data analysis techniques to recommend products or services to users based on their past behavior and preferences. These systems can be used to recommend products, services, content, or other items to users based on historical data surrounding these interactions.

Product recommendation systems also help users by providing them with personalized and relevant recommendations that are more likely to be of interest to them. This can lead to increased customer satisfaction, as users will be more likely to find and interact with products that they are interested in. 

Additionally, it can save the user time and effort in finding the right product for them. These benefits also increase customer loyalty, as users will be more likely to return to the business to find and purchase more products that they are interested in.

The Business Proposition

This leads us to the main purpose of product recommendation systems: business development. 

These systems help businesses and organizations increase engagement, sales, and revenue by providing personalized and relevant recommendations to their customers. 

By providing recommendations that are tailored to each user’s preferences and behavior, these systems can help businesses increase the number of sales and the average value of each sale, which ultimately leads to an increase in revenue.

Furthermore, product recommendation systems can also increase revenue by helping businesses to better target their marketing efforts. By providing insights into the preferences and behavior of customers, these systems can help businesses to create more effective marketing campaigns that are more likely to resonate with their target audience.

In today’s highly competitive business environment, product recommendation systems are becoming increasingly important. With the explosion of data and the growing importance of personalization, businesses must be able to make sense of this data in order to create personalized and relevant recommendations for their customers. 

As such, product recommendation systems are increasingly being used by businesses of all sizes to increase customer engagement, sales, and revenue.

Popular Examples of Product Recommendation Systems

One of the most well-known examples of product recommendation systems is Netflix. Netflix stores data about the movies and TV shows that users have watched in the past, as well as their ratings, and then uses that information to recommend similar movies and TV shows that they may be interested in. 

Netflix also takes into account other information like the user’s location, device type, and time of day to improve these recommendations.

A screenshot from Netflix that has several show/movie titled curated to the users profile.

Another example is the e-commerce website, Amazon. This marketplace uses demographic information to provide personalized product recommendations to its customers. The system also takes into account the products that users have viewed, added to their cart, and purchased in the past, as well as their browsing and search history. 

Amazon also uses demographic information such as the user’s location, age, and browsing history to make recommendations. 

A screenshot from Amazon that shows a number of related products based on the users shop history.

For our final example, let us consider Spotify, the popular music streaming service. Features like the Discover Weekly and Release Radar playlists, which are personalized playlists that are updated every week, provide users with new and relevant music based on their listening history and preferences. 

These insights are driven by information such as genre, artist, and album as well as audio features like tempo, energy, and valence. The system also analyzes the lyrics of the songs to understand the content and provide better recommendations to users.

A screenshot from Spotify that shows 3 curated options for the user to listen to based on past behaviors.

Closing Thoughts

We now have a better understanding of why product recommendation systems add so much value and the data they utilize to do so. Next time, we will dive into the underlying engineering of these systems and the techniques used to bring them to market. 

But why wait? 

Reach out today to phData today to see how we can help your enterprise capture market share and boost customer satisfaction with our machine learning consulting services.

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