As e-commerce grows — at a rate expected to hit an estimated $2.8 trillion in sales globally by the end of 2018 — so too do misconceptions among brands about what shoppers truly want and how they behave online.
In an Episerver study analyzing the habits of global online shoppers, findings showed that retailers are failing to capitalize on opportunities to drive conversions, specifically when it comes to personalization. Though personalization remains a buzzword within the fashion and beauty industry, as companies aim to identify savvier ways to serve up recommendations tailored to consumer preferences, that doesn’t mean they are doing so effectively. At the same time, the sheer volume of e-commerce options available online presents a challenge for companies: One misstep in the form of poor user experience, pricey shipping or an impromptu website glitch can turn away a consumer indefinitely.
With an increasing number of people going online to make purchases — 63 percent of survey respondents said they shop online at least once a month and 23 percent make an e-commerce purchase once a week — investing in the e-commerce experience is proving increasingly vital. The stakes are even higher when companies like Amazon are dominating the industry and luring shoppers with loyalty programs like Prime.
“Retail giants like Amazon have the inventory and distribution models to cater more exclusively to consumers’ price preferences. But most brands cannot get away with this strategy,” the report stated. “Now that online shopping involves more research and long-term engagements beyond transactions, businesses must learn how and where to provide value outside of purchase.”
In order to stay competitive, the report suggests that retailers need to gain an edge using the resources at their disposal, namely by investing in personalization, which has been a weak spot among the major digital juggernauts. Even eBay was sluggish to experiment with personalized features, debuting a program last week intended to provide users with a homepage of items of interest, similar to how Spotify shares songs on its Discover Weekly playlist.
Despite public concern over data breaches and recent shifts in global policy regarding how brands and digital platforms procure and use personal information, Episerver found a majority of consumers prefer that retailers use their data to help them make decisions. While 87 percent of respondents said they were “OK with companies knowing more about them,” 20 percent indicated they actively feel incentivized to return to a company website when personalization is at play.
“Businesses that embrace personalization have a differentiated proposition that could lead to sustainable growth,” Celine Finch, Deloitte’s consumer business research lead, told Glossy in a previous article. “For high-end brands, recognizing that this is the new luxury customers want is going to prove profitable in the long run.”
Beyond enhancing personalization, the report also recommended that retailers consider that shoppers are often visiting e-commerce sites for research and product-discovery purposes, not strictly to make a purchase. Though motivations for visiting a brand site remain mixed, only 17 percent said they go with the sole intention of buying something. As a result, retailers are overlooking ensuring that they are providing ample and accurate information, to their own detriment. According to the report, 46 percent of consumers said they’ll decide against a purchase due to incomplete or false information.
“Online shopping’s freedoms have shifted focus away from where people are transacting and toward the shopping experience itself. Buying a product may still be the finish line for many people online, but it’s no longer the only goal,” the report stated.