[Updated post from January 18, 2022]
If there's one thing we know about e-commerce, it's that consumer expectations are always shifting. Legacy retailers have been forced to invest heavily in their online presence to stay relevant, while digitally-native brands must continually invest in their shopping experience to stay competitive.
From rapid delivery to social commerce and self-service solutions, the COVID-19 pandemic created seismic changes in the retail sector as businesses and consumers were forced to conduct activities entirely online. Even as the landscape returns to normal, merchants are still under pressure to keep pace with consumer expectations for seamless, customer-centered retail experiences.
The bottom line? Flexible, reliable service at every touchpoint in the customer journey.
If you don't have the following strategies integrated into your e-commerce operation, meeting customer expectations will be a serious challenge. By taking action now, you can give your business a competitive edge as we head closer to the holiday season:
We are long past the days when the ability to make purchases online was considered a technological marvel. E-commerce and online shopping now form a key piece of infrastructure for the global economy, especially during the COVID-19 pandemic.
This means that customer expectations for the e-commerce experience have evolved dramatically, and continue to shift as new technologies work to streamline the shopping journey and provide greater opportunities for engagement. However, there continue to be a few key fundamentals that are essential to customer satisfaction. To secure conversions and secure customer loyalty, the e-commerce experience needs to be:
Cost-effective. When brick and mortar retail options continue to abound, consumers expect online businesses to offer products at appealing price points. This is especially true for direct-to-consumer brands, who can avoid markups by sourcing merchandise directly from the manufacturer or wholesaler. As the e-commerce space becomes more saturated, it's never been easier for online shoppers to find an alternative product at a lower price. To stay ahead and avoid a race to the bottom, brands need to focus on providing value as well as optimizing costs.
Convenient. The timeframe between placing an order and a package arriving on the doorstep has shortened considerably, with some brands now capable of same-day delivery services. But convenience is about far more than just rapid delivery. The ease of placing orders, tracking shipments, and returning merchandise all play a role in determining how easy it is for consumers to shop with an e-commerce brand.
Consistent. As consumers make use of more online and offline channels to discover, browse, and make purchases, it's essential that brands can offer their customers a consistent experience between channels where they can access the same benefits, products, and purchasing methods. Consistency helps to foster trust with shoppers and provide meaningful touchpoints that lead to purchases.
But what do cost-effectiveness, convenience, and consistency look like throughout the e-commerce shopping journey, and how can brands meet these customer expectations?
It's no longer enough to accept the standard credit card options at your online store. As online shopping capabilities have expanded, so has the number of payment options available to consumers.
The rise of digital wallets and cryptocurrency has led to major changes in consumer shopping behavior. Studies show that credit cards are slowly dropping in popularity, thanks to debt-conscious Millennials and Gen Z opting for more debit-based payment methods.
While credit card usage occurred in 72% of consumers during the 2022 holiday season, this doesn't mean there's been no change to preferred payment options. Inflation has caused adoptions of Buy Now, Pay Later (BNPL) programs to surge, with PayPal alone processing over $20 billion of BNPL payments globally, up 160% from 2021.
In sum, it's critical to offer a variety of payment options to attract more discretionary spending. A lack of desirable payment methods is one of the biggest reasons for cart abandonment in e-commerce. If it's a choice between you and another vendor who offers a BNPL service or a particular digital wallet, it's clear who consumers are going to pick.
By offering consumers flexibility and choice over how they pay, you can maximize conversions and meet customer expectations for a smooth payment process.
Free shipping is no longer optional in e-commerce. In addition to helping acquire customers, offering free shipping is a way to reward loyal and returning customers for their support by removing one of the biggest areas of friction from the e-commerce experience.
When consumers have committed to making a purchase, additional shipping costs can create frustration and even result in them reconsidering their order altogether. While offering free shipping on every order right not be financially feasible, brands can still find ways to turn shipping into an incentive or perk to influence consumer behavior.
For example, free shipping thresholds are a great way to entice customers to spend a little extra money to access this service. Using free shipping as a loyalty perk for members of your rewards program is another way to ensure that your brand is ringfencing this offering to shoppers who have good lifetime value to your business.
It's important to remember that what is convenient to customers might not always be true for brands. It's very tempting to silo channels from each other to avoid problems with managing inventory or returns, but this will not result in a customer-centric experience.
Scenarios like being unable to return online purchases in-store or easily earn loyalty points for in-store purchases create friction for customers and may drive them away from shopping with you in the future. When you boast multiple shopping channels, customers expect that they will be able to easily navigate between them while preserving customer data from earlier shopping sessions.
But omnichannel connectivity doesn't just benefit customers. A more streamlined online shopping journey means more opportunities to present consumers with personalized experiences, such as product recommendations and tailored promotions. In sum, the quality of your omnichannel experience will determine how readily your customers will engage with your offerings.
There are a variety of reasons for customers wanting to return items, from change of mind to more serious issues like damaged or defective merchandise. It's estimated that total e-commerce returns in 2022 reached $816 billion worth of merchandise or 16.5% of total sales.
If merchants view returns as the end of a customer relationship, rather than as an opportunity to build customer loyalty, this is a huge missed opportunity to build revenue-saving activities into your return workflow. Mechanisms such as one-click exchanges or suggestions to take store credit instead of a refund can help to preserve sales and set the groundwork for repeat purchases.
However, it's important to remember that online shoppers expect the return process to be seamless. According to Ryder partner Loop Returns, 69% of consumers in their 2023 survey said they expect retailers to have an easy-to-follow returns policy. Customer experience strategies such as in-store returns for online purchases and self-service return systems enable your business to streamline the return experience. If consumers know that the return process with your brand is easy to navigate, they're much more likely to shop with your brand in the future.
While many consumers are gravitating towards e-commerce, there's a growing appetite for immersive shopping journeys that mitigate the sometimes impersonal online shopping experience.
Technological innovations are helping to bring the best parts of brick and mortar right into people's browsers and mobile devices, allowing digital channels to align with the best parts of in-store shopping experiences.
A virtual storefront by Coach.
For example, many e-commerce returns happen because the product looks different in real life compared to how it looked online, resulting in massive revenue loss for online businesses. Augmented Reality technology is being utilized by apparel, furniture, and accessories brands so consumers can ‘try' products in advance and visualize how they will look. Paired with excellent customer service via live chat or video call, such techniques go a long way towards lowering return rates and providing the treatment customers expect.
Some digitally-native brands are taking this a step further by transitioning online shopping from static product catalogs to 3D-rendered virtual store environments, where shoppers can browse ‘real' product displays and even speak to avatars in the form of store associates. As these technologies become more affordable and easier to implement, investment will become essential to stay competitive and continue meeting customer expectations for convenient shopping experiences.
Acquiring new customers in e-commerce has never been more difficult – or more expensive. Increased competition, lower organic reach, and higher costs for paid search are making customer acquisition strategies untenable, even as more consumers flock online.
The more cost-effective alternative? Meeting your customers where they are.
Social commerce, where consumers can complete the entire shopping journey within a social media app, has grown in popularity as social media platforms become the preferred method for consumers to research brands and products.
Nearly two-thirds of consumers say they would be more likely to buy products from a brand if they could shop entirely within a social platform - a clear sign that consumers expect brands to build out a robust social commerce experience.
Digitally-native brands are already dependent on social media for brand storytelling and community-building. Social commerce is simply an extension of these capabilities by no longer requiring brands to send prospective customers away from their profiles to make transactions. This is a common point of friction that results in shoppers falling out of the sales funnel.
To create a successful social commerce strategy, e-commerce brands must be in-tune with what their customers want from their channels. High levels of social proof are essential to foster consumer confidence and willingness to purchase from your brand, which means being active in engaging with customers across multiple channels. Responding to comments, asking for feedback on new products, and identifying pain points in the shopping journey are all strategies to nurture followers on the path to purchasing.
As the e-commerce sector continues to evolve rapidly in response to new technologies and shifting consumer demands, there are numerous opportunities for merchants to grow their audience. As consumers re-assess their shopping habits, inter-channel connectivity and consistency have never been more important to ensuring customer satisfaction. By focusing on the above strategies, you can meet consumer expectations head-on – and even play a role in shaping them.
