Cross-selling, up-selling, and recommendations are a great way to get additional products in front of your customers and hopefully increase your average order value.
All three are presented to the shopper in a similar way but function differently.
Cross-sale: This is generally a complementary product. It serves the same function as the salesperson in the store that says "We have a shirt that would go great with those pants". We would call that a reciprocal cross sale because it works both ways. There are also one way cross sales. For example, when working with Sport Mart, it made sense to cross-sell a helmet with bike, but if someone was shopping for a helmet, it did not make much sense to cross-sell a bike. When shopping for a helmets, it made more sense to cross-sell things like cycling gloves or water bottles.
Up-sell: This would be a more expensive product that could be purchased instead of the product the shopper is currently looking at. So if they are looking at a $300 Espresso Machine, you could try and upsell them to a $350 machine. Generally they are items in the same department, just a little more expensive.
Recommendations: Most of the time when shopping from a small to medium eCommerce merchant, the "recommended" product are simply cross or up-sell products. Automated recommendations is the holy grail for most merchants and the bar has been set quite high by high volume merchants like Amazon. The challenge with automation is that you need a ton of data in order to generate statistically significant correlations between your items. Even a small catalog generates an almost infinite number of different combinations of baskets. You could easily have 100 sales of an item and never have the same items in a basket. For most merchants with under $500,000 in sales, good automated recommendations are almost impossible. Recommendations should also only be added after you have generated a significant number of orders.
For more reading on this:http://www.fastcompany.com/1721659/how-recommendations-could-get-smarter?partner=homepage_newsletterhttp://tynerblain.com/blog/2009/10/28/cross-sell-and-upsell/