In that case, it may be better to just put the hot new item in a category they know you purchase in. For instance, if I have a subscription to paper towels, maybe they should send me a subscription recommendation for toilet paper.

I'm sure someone thought to A/B test the recommendation engine against the whatever-happens-to-be-selling-right-now engine and the recommendation engine won.

An AUC of .5 isn't considered good in ML

That very much depends on the domain. In this case, I suspect it would be considered phenomenally good since a human would achieve a much lower number. Conversion rates for web ads created by humans are typically not more than a few percent.