AI in Recommendation Engine
A recommendation engine is defined
as a system that primarily suggests products, services, and information to the user based on
data analysis. The recommendation is primarily being driven by varied factors including
history and behavior of users. A recommendation engine is primarily based on AI, and it is
gaining momentum across the globe. Recommendation systems do not use explicit queries;
rather they analyze the user's preference for recommended goods and services that may be of
interest.
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Startups providing AI solutions for public and social sector:
For viewing the needs of a customer, a recommender usually considers previously viewed
pages, purchases, user profile (where age, gender, profession, and hobbies are indicated),
similar profiles of other users and their interactions and geographical location. So, a
recommendation engine is primarily a filtering system that prevents excess information load
and extracts the key content adapted to each customer's needs. Both buyers and sellers have
benefited from AI recommenders. For instance, buyers can find items that they may not find
by themselves, while sellers can encourage upselling and cross-selling and increase their
revenue.
A recommendation engine primarily increases revenue, conversions, Click-Through Rates
(CTRs), and other major metrics. It can have positive effects on user experience, which can
translate into higher customer satisfaction and retention. It is widely being adopted across
various social media platforms. For instance, Netflix presents you with a much narrower
selection of items that you are likely to enjoy. This capability saves your time and
delivers a better user experience. With this function, Netflix has achieved lower
cancellation rates and thereby, has been able to save billion dollars a year.
The recommendation engine usage is being seen across:
- Facebook: People You May Know
- Netflix: Other Movies You May watch
- LinkedIn: Jobs You May Be Interested In
- Amazon: Customer who bought this item also bought
- Google: Related Images
- YouTube: Recommended Videos
- Waze: Best Route
A recommendation engine is primarily a cohort and an advisor that helps in making the right
choice by providing personalized options and by creating a custom experience for users. This
engine is getting momentum in the digital world, as various industries are adopting it. For
instance, Waze has adopted recommendation engine for smart navigation systems and IBM for
traffic control systems. GE has also implemented the same in the Kaggle competition for
finding the best routes to save energy for the airline industry. The recommendation engine
is mainly seen as an intelligent salesman who know customer preference, style, and thus, can
make more intelligent decisions about what recommendations would benefit customers the most.
This, in turn, increases the probability of a conversion