The reality facing the retail world in 2018 is that it is now primarily an online industry. In 2016, 51 percent of shoppers said that they preferred to buy online, and that trend grew by a further 13 percent in 2017 and will continue to grow as even more consumers begin to prefer the online shopping experience. Not only has this seen the rise of online giants like Amazon, but has also resulted in a collapse of the traditional brick-and-mortar retail chains. In 2017, the Atlantic referred to this as a ‘meltdown’ for traditional retail, and the move to online retail has hit everyone from Macy’s and Sears to Toys”R”Us and Ralph Lauren.
Regardless of the size of the business, online retail is now the priority. The problem for many retailers is that they do not understand the online retail space as well as they understand their traditional business model. Companies can no longer be reliant on key locations driving business, and now have to find ways to attract customers exclusively through brand image and, more importantly, customer experience. 2018 will be crucial for many retailers, and having a better understanding of what their customers expect will play a key role in how well they can adapt to the changing landscape.
To get a better sense of what shoppers want from their online experience, Braineet conducted research into how e-commerce could be improved. The results point to key areas that retailers can look to address, and several trends that reveal what makes certain online shopping experiences better than others.
The Retail Landscape
If you’re looking for signs that online shopping has overtaken traditional retail, you can look no further than the fact that over half of all U.S. households now have an Amazon Prime subscription. For most shoppers, online retailers are now their first port of call for purchases, and the story is much bigger than just Amazon. Niche retailers like Casper, Blue Apron, Warby Parker, and MVMT have shown that brands that are sold exclusively online can become market leaders.
comScore research has shown that 44 percent of smartphone users have made a purchase using their mobile device, and mobile purchases now make up 20 percent of online retail transactions. Not only is this shift affecting where people buy clothes, electronics, and other consumer goods, but by 2020 the sales of food online in the United States is expected to reach $20 billion per year. This growth explains Amazon’s purchase of Whole Foods, and the rise in popularity of the likes of Blue Apron, Home Chef, and HelloFresh.
Consumers are now choosing convenience over everything else. That’s great news for any company with a website, but the issue is that the reduced barriers to entry bring with them greater competition. When consumers are focusing on convenience, they are also considering experience. Consumers are no longer comparing their experience to industry rivals, but are now using customer experience leaders as the litmus test. Wunderman research revealed that 87 percent of consumers in the US and 85 percent of consumers in the UK ‘measure all brands against only a select few’ (i.e. Amazon, Netflix, Starbucks, and other industries leaders that are at the forefront of customer experience and engagement).
In order to compete with the very best brands for customer experience, it is essential the companies in any industry have a better understanding of exactly what their customers want and what they will expect from them in the coming years. Retailers have to ask themselves the key question: how can they improve the online shopping experience?
Braineet Findings: How Retailers Can Improve the Online Shopping Experience
To get a better understanding of the changes that online shoppers would like to see, Braineet carried out research how brands and websites could improve the online shopping experience. The results were telling.
49 percent of participants felt that the search and decision-making process needed to be improved. Surprisingly, the problems identified weren’t limited to smaller retailers but included issues with the services at Amazon and Apple.
18 percent of online consumers felt that augmented reality tools could be used to improve the online shopping experience, with a further 8 percent identifying a need for online brands to have a better understanding of what they like so that they could make more appropriate product suggestions and provide more reliable product reviews.
26 percent of users wanted to see the purchase process improved. 15 percent thought that modes of payment could be improved by using touch ID or even allowing for payment upon delivery. Others felt that there needed to be a greater ability to rent products.
A quarter of users thought that online retailers could improve the online shopping experience through better customer service, support, and communication. This is particularly surprising given the fact that online retail gives companies the chance for greater interaction with their consumers, but it seems many are letting that opportunity slip through their grasps. Consumers want to have more control over the delivery of their purchases, a more interactive and responsive customer support, and better return policies.
What’s more, 7 percent felt that online retail purchases should come with the ability to make a charitable donation to a worthy cause, an ability to contribute to their community, or a way of selecting more environmentally friendly products or modes of delivery. This comes fresh on the heels of the Harvard Business Review speaking about how CEOs are taking social responsibility more seriously. Senior executives may be thinking about the social impact of their corporations, but they should be taking some time to try and include their consumers in this process.
Online retail is more popular than ever before, and its popularity will only continue to grow in 2018 and the years ahead, but the research carried out by Braineet has revealed that the customer experience is far from perfect. Even online retail giants have several ways in which they could significantly improve their customer experience and understand their customers better.
Why this Change can be Great for Retailers
Not only does the move to online retail even the playing field for many smaller brands, it also allows companies of any size to have a better understanding of their customers. Being able to track exactly what customers look at, how long they look at certain items, and what they put in and take out of their shopping basket is much more informative than any traditional loyalty program will ever be.
What’s more, integrated platforms like Braineet allow retailers to interact with their customers and understand their needs better than ever before. Costly market research, focus groups, and ineffective surveys can be replaced with interactive and interesting communication tools.
The number of bankruptcies and store closures in 2016 and 2017 are an indication that this is a very challenging time for the retail industry, but it is also a great opportunity. Retailers that embrace new trends and technology will be able to thrive in ways that were previously unimaginable. By creating a better relationship and understanding their customers better, successful retailers will be able to provide an adapted experience that drives new business and ensures that customers continue to come back.