Leave No Person Behind: How Online Retailers Must Optimize for the New Shopper
Online retail is on a steady climb as consumers shift to digital channels for the convenience of using any device, anywhere, at any time to complete purchases. According to eMarketer, worldwide retail e-commerce sales are growing from $4.28 trillion in 2020 to $6.39 trillion in 2024, which is forecasted to correspond to 21.8 percent of total retail sales, up from 13.8 percent in 2019. This represents a massive and rapidly growing market. To win with today’s new shopper requires a mindset shift and a very different customer experience (CX).
Constantly Changing Market Dynamics and Consumer Preferences
2020 had a monumental impact on global markets and people’s willingness to conduct business online. By all accounts, many retailers accelerated their digital commerce capabilities by five years to 10 years. Consumers benefited from major advancements, which included a concerted effort by many brands to offer a great deal more flexibility in how people can purchase and get delivery of an item.
In a short period, consumer acceptance and preference for such conveniences as curbside pickup and delivery applications dramatically shifted spending patterns and consumer journeys. This is a testament to how quickly market dynamics can reshape consumer preferences. It also creates a major challenge for retailers that need to keep up with demands and innovation by competitors.
Growing Customer Expectations
Changing dynamics are also giving way to increasing expectations which brands have to stay on top of to stay relevant. What was tolerated even a year ago is no longer acceptable when consumers have so many alternatives. An example is the need to offer the same convenience and capabilities between a mobile device and a desktop computer.
The penalties for having a poor mobile CX is severe, with as many as 50 percent of consumers completely shifting to another brand if it offers better options. The expectations for a truly omnichannel experience that blurs the line between desktop, mobile and in-store is already here and the brands able to deliver against such expectations are growing exponentially.
A major expectation on the rise is the desire for personalized experiences. Consumers are increasingly wanting an experience which is both contextual and relevant to their current needs. Over the next few years this will define brands that are able to grow by better connecting with their customers and those that will face likely extinction. The concept of hyperpersonalization is the holy grail for retailers and something that many are struggling to make a reality. The challenge centers on understanding a given visitor’s intent and needs to serve up in real time a customized experience.
Declining Online Conversions — A Stark Reality
Despite the focus by many brands on driving more visitors to their sites, their ability to get them through a successful journey is failing. The global averages show that only 43.8 percent of visitors even make it to a product page. Only 14.5 percent of those visitors ever add an item to the shopping cart. The number of visitors who make it all the way though to a purchase stands at a meager 2.27 percent. And these statistics have been on a steady decline since 2019. Brands have to rethink their approach or jeopardize their ability to get their share of a growing market defined by a new type of shopper.
No Person Left Behind: Bringing Online Retail Strategies Into Focus
The biggest challenge in today’s market is that brands cannot count on getting a little bit of a market and shopper’s business. Consumers in droves have become very binary and lack the allegiance that used to sustain many brands. This means brands have to go all in and truly deliver when it comes to digital experiences. They have to optimize faster than ever and also need the flexibility and agility to adapt to changing market dynamics, consumer preferences and expectations.
What makes this much harder is that the new shopper can be a 15-year-old looking for trendy shoes on a state-of-the-art smartphone or an 80-year-old shopping for holiday presents using a dated laptop. Serving up an experience that connects with each shopper is very complicated. Many of today’s efforts to personalize CX use demographics such as gender, race, marital status, location and age, but such parameters aren't very useful in understanding what a shopper’s desires and intent are.
While still in its early days, artificial intelligence (AI) enables real-time optimization and delivery of personalized CX that connects with each visitor’s unique intent. This has a profound impact on engagement and satisfaction, which directly translates to much higher conversions and customers that come back. For brands looking to thrive, AI has to be a key building block to better serve new shoppers today and beyond.
Michael Scharff is the CEO and co-founder of Evolv AI, an AI-driven optimization and personalization platform that continuously serves better experiences that connect with customers.
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