How the E-Commerce Landscape Has Evolved: New Consumer Habits

If the past three years has taught us anything, it's that the online landscape is subject to radical changes. Just look at the coronavirus' impact on online shopping. However, remaining top-of-mind with online shoppers still requires new strategies that are based on understanding the massive shifts in consumer behavior and retailer resources.

In this article, we delve into the intriguing dynamics of the e-commerce realm, exploring the ways in which consumer habits have evolved and the resources that retailers now rely upon to thrive in this new era.

Omnichannel: From Offline to Online and Vice Versa

Let's brush up on the essence of the omnichannel approach in e-commerce.

Omnichannel in e-commerce refers to a holistic and integrated approach to retail and marketing that seeks to provide a seamless and consistent shopping experience to customers across various channels and touchpoints. These channels can include physical stores, websites, mobile apps, social media platforms, email, chat and more.

Key elements of an omnichannel approach in e-commerce include:

1. Consistency: Customers experience a consistent brand message, product information, pricing and service quality, regardless of the channel they use.
2. Integration: Omnichannel e-commerce integrates data and inventory systems across channels, allowing for real-time updates and availability information. This ensures that customers can access accurate product information and inventory levels.
3. Personalization: Omnichannel e-commerce often leverages customer data to provide personalized shopping experiences. This might involve recommending products based on past purchases, browsing history or location.
4. Convenience: Customers can start a transaction on one channel and seamlessly complete it on another. For example, they might research a product on a website and then make the purchase in a physical store or through a mobile app.
5. Customer-сentricity: Omnichannel strategies prioritize the needs and preferences of the customer, aiming to make the shopping experience as convenient and enjoyable as possible.
6. Flexibility: Omnichannel e-commerce enables businesses to adapt to changing customer behaviors and preferences, incorporating new channels and technologies as they emerge.
7. Analytics and data: Data is collected across all channels to gain insights into customer behavior and preferences, allowing for refined marketing strategies and improved customer experience.

Omnichannel e-commerce recognizes that customers interact with brands in diverse ways and aims to create a unified, customer-centric approach that enhances their shopping journey, fosters brand loyalty and ultimately drives sales and growth for businesses.

Interesting fact: Often people see omnichannel and unified commerce as interchangeable. Unified commerce and omnichannel are indeed closely related, but they are not the same. They both aim to create a seamless shopping experience for customers across multiple channels, but they differ in their approach and scope. Unified commerce takes integration a step further by consolidating all commerce operations into a single, unified platform. It's not just about connecting channels: it's about having one central system that manages everything related to commerce.

Data Analytics in Omnichannel E-Commerce

Data analytics plays a pivotal role in omnichannel e-commerce by providing the insights and intelligence needed to create a seamless, cohesive and personalized shopping experience across multiple channels. Here are some examples of how data analytics is driving the success of omnichannel e-commerce:

1. Customer understanding: Data analytics allows businesses to create comprehensive customer profiles by aggregating data from various channels. These profiles include demographics, preferences, purchase history and online behavior.
2. Supply chain management: Analytics helps in forecasting demand accurately by analyzing historical sales data across channels. This enables businesses to maintain optimal inventory levels, reducing overstock and understock issues.
3. Operational efficiency: Analytics tools can optimize order fulfillment by analyzing the most efficient distribution and delivery methods across channels. It also helps in optimizing supply chain operations by identifying areas for cost reduction and process improvement.
4. Data protection: Data analytics ensures data security and compliance with data protection regulations, especially when handling customer data across channels.
5. Competitive analysis: Data analytics monitors market trends and competitors' activities across channels, helping businesses stay agile and adapt to changing market conditions.

These are just a few of the most obvious examples of using data analytics in omnichannel e-commerce. Overall, it empowers businesses to understand their customers better, optimize operations, enhance the shopping experience and stay competitive in a landscape where customers expect a seamless and integrated journey across all channels.

Shifting Consumer Behavior: Blending Online and Offline Purchases

Omnichannel has become omnipresent, driven in part by new shopping trends. Not only have consumers changed how they shop — seeing a product offline and buying online, and vice versa — but also have the buying channels.

The proliferation of smartphones has led to the surge of mobile commerce. Consumers now expect seamless shopping experiences on their mobile devices, from browsing to purchasing. Retailers have responded by optimizing websites and creating dedicated mobile apps.

Social media platforms have also become powerful sales channels, contributing to the emergence of the erm social commerce. Consumers can now discover and purchase products directly from social media posts and ads. Platforms like Instagram and Facebook have integrated shopping features, enabling businesses to reach customers where they spend a significant amount of their time.

It is obvious that omnichannel e-commerce has empowered people with more choices, convenience and personalized experiences, ultimately shaping new expectations and consumer shopping habits in the digital landscape.

The Rise of Click-and-Collect and Its Impact on Consumer Behavior

The click-and-collect trend has gathered speed. The market for click-and-collect doubled in 2020 in the US and is expected to continue its massive growth through 2024. On top of that, research has shown that opening a new physical location leads to a 37% increase in traffic to the retailer’s website over the course of the following quarter.

The success of click-and-collect highlights the significance of an omnichannel strategy. Businesses are recognizing that seamless integration between online and offline channels is essential for meeting consumer expectations. This integration allows customers to research, order and pick up products in a way that best suits their preferences.

Click-and-collect resonates with consumers because it offers a high degree of convenience. It addresses the desire for flexibility in shopping, allowing consumers to shop online but choose a physical pick-up location that suits their schedule. This approach also saves time. Shoppers can avoid the hassles of navigating crowded stores or waiting for deliveries at home, making it an attractive option for busy individuals.

In other words, focusing on an online only marketplace is a self-limiting strategy; physical and all-channel digital remain deeply connected.

Retailers need to understand their consumer spending habits and meet them where they go. However, if your budget is not unlimited, don’t spread your resources too thin. Instead, meet your shoppers where the return on investment is highest — and reinforce your message across platforms.

Following these best practices will help you increase sales, both online and offline.

• Consistent branding: Ensure your physical stores carry consistent branding elements with your online presence, such as colors, logo and design, to reinforce brand recognition.
• Prominent URL display: Display your website's URL prominently in-store, making it easy for in-store visitors to remember and visit your website later.
• Unified loyalty programs: Create loyalty programs that seamlessly work both online and offline, offering rewards and incentives for purchases across all channels.
• QR code product info: Use QR codes to provide in-store customers with detailed digital information about products, including reviews, specifications and pricing.
• AR experiences: Implement augmented reality experiences in-store, allowing customers to visualize products in their own space before making a purchase.
• Post-purchase online discounts: Offer exclusive online discounts to customers who make in-store purchases, encouraging them to visit your website for future deals.
• Online shoppers to in-store: Encourage online shoppers to visit physical stores near them by providing location-based discounts for their first in-store purchase.
• Cross-location inventory: Allow in-store visitors to check the availability of out-of-stock products in other store locations and offer the option to place orders for these items online.
• Real-time inventory updates: Ensure that your online inventory system is updated in real-time to prevent over-promising products that are out of stock.
• Cross-channel subscriptions: Extend subscription services to both online and offline customers for repeat-purchase products, providing convenience and loyalty rewards.
• Geo-targeted promotions: Use location-based marketing to encourage online shoppers to visit nearby physical stores, offering discounts or exclusive in-store events.
• First-party data: Collect first-party data from both online and offline channels to gain insights into customer preferences, behavior and shopping patterns. Use this data for personalized marketing efforts.
• In-store analytics: Optimize physical store layouts by tracking visitor footprints and identifying high-traffic and low-traffic areas. Adjust store layouts based on these insights to enhance the customer experience.
• Visitor journey tracking: Similarly, on your website, track the visitor journey from the source point (e.g., landing page) to the exit page (e.g., checkout), identifying areas for improvement and conversion optimization.

By implementing these practices and staying attuned to the evolving needs and preferences of your customers, you can effectively boost sales in both online and offline channels, creating a truly integrated shopping experience.

Omnichannel Communication: Make It Consistent but Not Boring

Consistency and unified messaging are foundational principles in the successful implementation of an omnichannel strategy. They play a pivotal role in delivering a seamless and cohesive experience to customers across all touchpoints, both online and offline. However, retailers need to walk a fine line between diversifying channels and preserving a unified message.

The boom of retail media is an indicator that the online advertising market still has significant growth potential. Retail media, or ads placed in online marketplaces, has joined social commerce and contextual advertising as the new kids on the block, allowing retailers to meet shoppers where they are.

• Retail media is extremely effective because visitors to online marketplaces, such as Amazon or Walmart, already have buying intent.
• Social commerce is gaining serious traction. The more people use social media platforms as gateways to the internet, the more potential gain for retailers utilizing that space.
• Contextual advertising is a highly effective method for creating or reinforcing brand awareness, matching content to both user interest and page context.

Of these, contextual advertising offers the added benefit of brand safety. It guarantees placements in brand-safe environments that elevate brand image, match page content and sentiment via advanced NLP modeling and, therefore, answer customer intent.

Brand Values and Meeting Consumer Demands

Increasingly, the discourse on transparency, sustainability and environmental impact has moved to the consumer level. Mindful shopping and purchasing, wasteful packaging, worker labor conditions and unsustainable sourcing are now common concerns across all verticals.

Let's talk more about this and how it is reshaping consumer behavior in significant ways:

1. Ethical sourcing: Consumers are increasingly concerned about the origins of the products they purchase. They want assurance that products are sourced ethically, without exploiting workers or harming local communities. Brands that can demonstrate transparency in their supply chains gain a competitive edge.
2. Sustainable materials: There is a growing preference for products made from sustainable materials, such as organic cotton, recycled plastics or renewable resources. Consumers often seek products with clear labeling that highlights eco-friendly choices.
3. Reducing waste: Wasteful packaging is a top concern. Consumers are actively seeking products with minimal and eco-friendly packaging, and they are willing to pay a premium for products that generate less waste.
4. Carbon footprint: Awareness of a product's carbon footprint is on the rise. Consumers are gravitating toward brands that prioritize reducing emissions in their production and transportation processes.
5. Fair labor practices: Consumers are increasingly advocating for fair labor practices. Brands that support workers' rights and provide safe working conditions are more likely to gain consumer trust.

Connect your brand to an attitude. Sustainably made or sourced, fair labor, equitable production conditions and low environmental impact are important labels to an increasing number of buyers.

Takeaway: Angle your advertising to the top-most relevant concerns in your market.

New Drivers for Repeat Purchases

To be able to prompt a repeat purchase, we, first, need to understand how the market has changed.

1. Mobile shopping is poised for fabulous growth. Desktop interactions did yield the highest conversion rates (3.9% vs. 2.3%). However, in Q4 of 2021, 67% of US online shopping was conducted on mobile devices. Be prepared to provide a seamless mobile experience, and then close the deal on a desktop.
2. Specific verticals have specific behavior patterns and drivers. Entertainment, apparel, electronics, accessories and footwear are now routinely bought online more than in brick-and-mortar stores. However, brand loyalty now tends to be lower: shoppers are more easily lured away by offers more aligned to their demands.
3. Fewer visits, more money. Buyers visit brick-and-mortar less often than before the pandemic, but the amount spent has increased, even when accounting for inflation. The trend tends to be similar for online marketplaces, with fewer pages visited but more time spent on each page.

Knowing how market segments are likely to interact with brands (what devices they use, what platforms they browse on, what prompts a click, where they close deals) will help you drive resell and upsell decisions.

Employing the below drivers can help you increase the likelihood of repeat purchases across the digital landscape.

1. Loyalty benefits with QR codes: Implementing loyalty programs with QR codes that bridge physical and digital experiences can be highly effective. Customers can earn rewards and discounts both in-store and online, encouraging repeat purchases.
2. Curated customer content: Encourage customers to create and share content related to your products. User-generated content, such as reviews, images and videos, can build trust and engagement. Feature this content on your website and social media to inspire others.
3. Digital enhancements for visualization: Use augmented reality (AR), digital size guides and 3D sizing tools to help customers visualize products. This reduces uncertainty about how products will fit or look, leading to more confident purchases.
4. "Try before you buy" options: Offer customers the ability to try products before making a final purchase. This could involve home trials, sample boxes or virtual try-on experiences. Expedited shipping for these trial products can further incentivize conversions.
5. Frictionless, seamless experiences: Prioritize a seamless shopping journey that transcends online and offline channels. Ensure that customers can easily switch between channels without encountering obstacles or inconsistencies in their experience.
6. "Complete the look" and recommendations: Suggest complementary products to customers based on their browsing and purchase history. This cross-selling strategy can boost average order value and encourage repeat purchases.
7. Sustainability and ethical practices: Highlight your commitment to sustainability and ethical sourcing. An increasing number of consumers are making repeat purchases from brands that align with their values.
8. Personalized email marketing: Use data analytics to send highly personalized email marketing campaigns. Tailor product recommendations, promotions and content to individual customer preferences.
9. Interactive customer support: Offer real-time chat support or chatbots to assist customers in their purchase decisions. Quick and helpful support can instill confidence in shoppers and reduce cart abandonment.
10. Gamification: Gamify the shopping experience with rewards, challenges and competitions. This engagement tactic can encourage repeat visits and purchases.

The Future of E-Commerce: Trends to Pay Attention To

So what's next? Consumer preferences, technological advancements and market dynamics are in constant flux, shaping the future of online retail. Adapting to emerging trends is crucial for maintaining competitiveness and ensuring sustained growth. So let's summarize top e-commerce trends that are reshaping the industry and why they matter for businesses aiming to remain at the forefront of digital commerce:

1. Growing AI influence: Already AI is being used everywhere and it will only grow — advanced AI algorithms provide highly tailored product recommendations and shopping experiences, AI-driven chatbots handle customer inquiries and provide support, not to mention the use of AI for data analysis and content creation.
2. Pricing competition: With customers easily comparing prices online, the pressure to compete on price is high. Differentiation strategies and value pricing can help e-commerce businesses maintain profitability.
3. Social commerce: Social media platforms like Facebook, Instagram and Pinterest are evolving into e-commerce hubs. Integration of shopping features within these platforms is driving the growth of social commerce.
4. Augmented reality (AR) and Virtual reality (VR): AR and VR technologies are enhancing online shopping by allowing customers to visualize products in their environment. This trend is expected to continue as more retailers adopt AR and VR.
5. Sustainable and ethical shopping: Consumers are prioritizing sustainability and ethical practices. E-commerce retailers are responding by focusing on eco-friendly sourcing, packaging, manufacturing, and carbon footprint reduction.

In general, the future of e-commerce looks quite clear: it is set to evolve significantly in the coming years. It will become more personalized, seamlessly integrate online and offline shopping and use new technologies such as AR, VR and blockchain. Data privacy and security will be paramount, and online marketplaces will diversify. E-commerce will expand globally, presenting new opportunities and challenges for businesses. So adaptability and innovation will be key in this changing landscape.

Necessity is the Mother of Invention

Consumers have become increasingly sophisticated and demanding. To capture their attention in a crowded market, advertisers must build on basic principles (buyer intent, customer journey tracking).

From the changes in time spent on a page to where exactly shoppers close the deal, from how retailers collect information about their audience to how they design the user experience, the world of commerce in 2023 is new again. However, the challenges we are facing are an opportunity to think outside the box and innovate in order to reach the audience one millisecond before a competitor does.