Mass Customization

Until a few years ago most e-commerce sites were created as an electronic version of the company’s catalogs and brochures. The internet however is an ideal medium for directly targeting customers as the browsing behavior of every customer can be tracked down at relatively low cost and in a short time. This enables web vendors to personalize their products and the representation of their products for individual customers at a massive scale, a marketing strategy that is referred to as mass customization.

Recommender systems are used by e-commerce sites to suggest products and information about these products to customers. This enhances e-commerce sales in three ways:

  • Browsers into buyers. Many people often browse through a web site without ever purchasing anything. By helping people find the products they are interested in and provide relevant product information, recommender systems can turn visitors into buyers.
  • Cross-sell. The average order size can be increased by suggesting additional products based on the products that were already selected by the customer.
  • Loyalty. Customer loyalty is an important business strategy for an e-business since the competitors are only a few clicks away. Recommender systems improve loyalty by providing extra value for the time a customer spends on the web site.

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