3 Strategies Brands Can Employ to Address the Changing Online Retail Landscape
The global impact of COVID-19 will be studied for decades to come; an immediate impact however has been the massive growth of e-commerce due to store closures early in the pandemic. Consumers simply went to their smartphones and laptops to buy everything from pet food to electronics to everyday essentials. Even today, when most retail stores are back to normal operations, many shoppers would prefer to play it safe by buying goods online rather than at their favorite brick-and-mortar store.
The convenience of shopping online during the pandemic fueled enormous e-commerce growth, which will continue to climb through 2021 and 2022. According to eMarketer, U.S. e-commerce sales are expected to reach double-digit growth, expanding by 17.9 percent in 2021 to more than $933 billion. The analyst firm projects e-commerce sales will surpass $1 trillion in 2022, accounting for over 20 percent of total retail sales by 2024.
The insights from our own survey of 1,500 U.S. and U.K. consumers (in July 2021) provided some fascinating insights into evolving shopper behavior due to the fallout from the pandemic. Our findings align with eMarketer’s projections and agree there's tremendous room for e-commerce growth ahead. One of the most interesting data points is the number of consumers (54.5 percent) who plan on shopping online as much as they did during the last holiday peak, with more than 32 percent of U.S. respondents expecting to shop online even more than they did during the 2020 holiday season.
Our survey also unearthed some challenges for retail brands; namely, how to improve the user experience to enable consumers to find what they want more easily and deliver better and more relevant product recommendations. In fact, nearly 87 percent of shoppers say they face an overwhelming number of product choices. This points to ongoing customer experience challenges which brands can no longer ignore and should make a priority to fix.
3 Strategies to Address the Transformed Consumer
The retail landscape has changed; the question is whether brands have adapted by creating compelling and engaging shopping experiences that lead to sales and repeat customers vs. ongoing challenges with site abandonment and the loss of visitors to competitors. Three strategies retailers should push to the top of their priority list to meet consumers where they are now include:
1. Deliver a hyper-relevant experience to decrease the “meh” factor.
The No. 1 reason for leaving a retailer’s site, according to 72.6 percent of the 1,500 U.S. and U.K. shoppers we surveyed, is their inability to find the products they're seeking, with nearly nine in 10 consumers feeling overwhelmed by the number of product choices presented to them. The path to hyper-relevance requires capturing intent and then responding to shopper behavior in real time. If the shopper is clicking on the same items in the first one to two pageviews, reorganize product pages to prioritize and badge these products. This is the key to re-engineering the customer experience during the site visit and in the middle of a transaction.
2. Deliver one-to-one personalization through better product recommendations.
More than 41 percent of U.S. survey respondents said that while they expect recommended products to be tailored to them specifically, over 37 percent said the products recommended are rarely relevant. Instead of serving product-to-product based recommendations, brands can leverage the power of artificial intelligence (AI) and deep learning to deliver customer-to-product-based product recommendations. Critically, this approach is based on true personal browsing and shopping journeys as opposed to generically based on items other shoppers like. By definition, this true one-to-one journey of product discovery unearths more of a brand’s product catalogue by finding the most relevant products for each customer. This results in e-commerce teams being able to automate the merchandising of their “long-tail” products.
3. Mobile shopping should be effortless.
The growth in mobile shopping has exploded. According to eMarketer, mobile commerce sales will double to $700 billion by 2025, making mobile shopping experiences another key area that retailers should work on improving. This trend will only continue to grow in the coming years as social media and smartphones make browsing, finding and purchasing products more effortless. With nearly 41 percent of U.S. respondents in our survey reporting they prefer to shop by smartphone or other mobile device, retailers should invest in making the mobile shopping experience just as seamless, engaging and relevant as what’s delivered on desktop.
The impact of the pandemic on consumer spending patterns is multifaceted. It has changed where we buy goods, what we buy, and how much we spend. But one thing is clear: consumer shopping behavior has changed. The question is whether brands can adapt so they’re better able to meet customers where they are now. The enormous e-commerce market potential is there for the retailers that acknowledge and take immediate action to address the changing landscape with the right mix of relevance, ease of navigation and product discovery. These are the necessary ingredients for curating one-to-one personalized experiences that show first-time visitors and longtime customers they're “seen” and appreciated.
Robin Trickett is vice president of strategy at Coveo Qubit, a leader in AI-powered personalization technology for merchandising teams.
Robin Trickett is the vice president of strategy at Coveo Qubit where he is a member of the leadership team and integral to developing go-to-market, multi-year planning and strategic initiatives.