Recommendation as a Service — The Rise of Recommendation Engines
Although the diverse capabilities and strong benefits of recommendation solutions are already leveraged by several industries, their future business applications (largely extended in scope by the introduction of recommendation-as-a-service platforms) still hold a substantial unexploited potential. Therefore, these services continue to gain an increasing importance from an economic perspective.
The evolution of recommendation-as-a-service platforms
An implemented recommender system has to be developed, integrated, maintained and supported. Relatively few notable corporations manage these tasks by creating and sustaining a specific business unit inside their organizations. This strategy characterizes generally those firms that consider the technology as crucial for conducting their business operations. This can be the case either if therein lies their distinctive competitive advantage on their target market, or it is simply a given attribute of the type of services they are providing. A great example for this is music streaming.
However, the internalization of the related research and development activities require highly specific, relatively hardly accessible knowledge and capabilities. Therefore, corporations that do not necessarily need to be in full control of the solutions they apply, or cannot afford the associated costs, are more likely to prefer solutions developed and administered by independent vendors.
Even a few years ago, only larger players were able to harness the power of these technologies, as most recommender systems on the market required custom integration which involves development costs that are simply too high for most SMEs.
However, recommendation-as-a-service platforms started to proliferate in the past couple of years and they arguably transformed the whole recommender system business landscape. It is not at all surprising if we consider how recommendation engines are an obvious domain for SaaS-based solutions, due to their excellent value propositions and the sophistication of the underlying technologies.
Therefore, we can find a number of suppliers focusing solely or mostly on these solutions. Their products can be classified in the following way.
eCommerce engine add-ons, plugins
These are the easiest to install and configure and plenty are available for most major CMSs and eCommerce engines. However, most of these — especially the free ones — only provide very simple recommendations, e.g. popular, best selling etc. logics. While these can already be very helpful for increasing sales and engagement, eCommerce stores with 100+ items and a moderate customer base, or ones with a clientele of a smaller number of niche regulars can already make great use of more sophisticated logics, such as collaborative filtering methods or product similarity based recommendations.
Self-service recommendation-as-a-service systems
These are generally more sophisticated solutions supporting DIY integration. Ideally, they can be connected to any web-based platform where there are items, users, and events. The eCommerce recommender system space is arguably the most saturated. However, you can find a number of vendors with specialized solutions for certain niches or content recommendations.
Most of these systems offer analytics dashboards, customization options and come at a price that is affordable for most SMEs. Please note, that despite the risk-free message solely or partly commission based pricing plans send, if you’re able to leverage the solution to the maximum and it ends up fitting your business strategy well, you’ll end up paying more than with a traffic based plan, that at first might sound less appealing — especially to small businesses who have to consider investments even more carefully. Also, the one month trial period (where it is available) is usually enough to determine how the solution works in the case of your particular eCommerce store.
Recommendation-as-a-service — more and more a must for eCommerce
Countless studies and articles are being published on a weekly basis on the importance of personalization features. It is more and more clear, that personalization technologies don’t just provide great business results, but they also please, engage, and satisfy users, and can dramatically increase customer retention. Recommender systems are the very cornerstone of any personalized website. Moreover, recommendation-as-a-service solutions are easy to implement and provide very reliable business results. For every SME seeking to implement personalized features to its site, subscribing to such a service should be top priority.
So there you have it, recommendation systems as a service. Does your business use any of these solutions?
Originally published at www.yuspify.com.
