Recommendation systems: a joint analysis of technical aspects with marketing implications

Abstract: In 2010, Web users ordered, only in Amazon, 73 items per second and massively contribute reviews about their consuming experience. As the Web matures and becomes social and participatory, collaborative filters are the basic complement in searching online information about people, events and products. In Web 2.0, what connected consumers create is not simply content (e.g. reviews) but context. This new contextual framework of consumption emerges through the aggregation and collaborative filtering of personal preferences about goods in the Web in massive scale. More importantly, facilitates connected consumers to search and navigate the complex Web more effectively and amplifies incentives for quality. The objective of the present article is to jointly review the basic stylized facts of relevant research in recommendation systems in computer and marketing studies in order to share some common insights. After providing a comprehensive definition of goods and Users in the Web, we describe a classification of recommendation systems based on two families of criteria: how recommendations are formed and input data availability. The classification is presented under a common minimal matrix notation and is used as a bridge to related issues in the business and marketing literature. We focus our analysis in the fields of one-to-one marketing, network-based marketing Web merchandising and atmospherics and their implications in the processes of personalization and adaptation in the Web. Market basket analysis is investigated in context of recommendation systems. Discussion on further research refers to the business implications and technological challenges of recommendation systems.