The explosive growth of the world-wide-web and the emergence
of e-commerce has led to the development of recommender
systems—a personalized information filtering technology
used to identify a set of N items that will be of
interest to a certain user. User-based and model-based collaborative
filtering are the most successful technology for
building recommender systems to date and is extensively
used in many commercial recommender systems. The basic
assumption in these algorithms is that there are sufficient
historical data for measuring similarity between products or
users. However, this assumption does not hold in various application
domains such as electronics retail, home shopping
network, on-line retail where new products are introduced
and existing products disappear from the catalog. Another
such application domains is home improvement retail industry
where a lot of products (such as window treatments,
bathroom, kitchen or deck) are custom made. Each product
is unique and there are very little duplicate products. In
this domain, the probability of the same exact two products
bought together is close to zero. In this paper, we discuss
the challenges of providing recommendation in the domains
where no sufficient historical data exist for measuring similarity
between products or users. We present feature-based
recommendation algorithms that overcome the limitations
of the existing top-N recommendation algorithms. The experimental
evaluation of the proposed algorithms in the real
life data sets shows a great promise. The pilot project deploying
the proposed feature-based recommendation algorithms
in the on-line retail web site shows 75% increase in
the recommendation revenue for the first 2 month period.