What Merchants Need to Know about the Age of Ecommerce Customer Experience
Driven by tech innovation, online commerce is growing fast. Merchants should quickly adapt to the shifts in buyer psychology and deliver ecommerce customer experience that keeps them competitive.
- What Drives Ecommerce in 2019
- Generations Y and Z as Key Buying Forces
- Mobile-First Ecommerce Customer Experience on The Rise
- Customers Want to Combine Online and Offline Channels
- Digital Payment is a New Norm
- Ecommerce Security Remains a Concern
- Contextual Commerce Is Still Booming
- Voice Commerce Keeps Growing Thanks to AI
- On-Demand Delivery Goes Beyond Logistics
- Innovations Change Shopping Preferences
- How Ecommerce Brands Can Adopt to the Changes
Ecommerce brands can no longer get away with inaction when it comes to the customer experience (CX) they provide. As a sign of the arrival of the new customer experience era, thought leaders at PwC suggest that businesses use a new metric related to brand perception—return on experience, or ROX for short.
For consumers, experience is a part of the product or service they buy, so today online shoppers often choose merchants judging by CX. The number of components of the holistic ecommerce customer experience keeps increasing—from the first brand encounter to checkout. The online buying audience has become more susceptible to new gadgets, shopping channels, and overall digitization, and all of this has spilled over to the overall expectations from online retailers’ service.
Evolving technologies are making these expectations ever more complex. To retain and increase the share of customer wallet in a tightly packed market, B2C merchants have no other options but to invest in ecommerce development.
Now let’s look at how ecommerce is changing in the light of the technological boom, and what merchants can do to stay competitive.
What Drives Ecommerce in 2019
The global B2C ecommerce market is growing at quite a speed and is predicted to conquer 17.5% of the total retail sales by 2021.
Shoppers are getting less suspicious of buying via the internet, which is reflected in the growing frequency of online purchases. While the share of shoppers who buy online weekly or more often has risen to 31% in 2018, the number of customers who stay away from web stores has fallen by 3%.
The drivers of the ecommerce business growth are versatile, and some of them truly challenge the traditional business model as we know it.
First, there are Generations Y and Z that are coming into their full maturity and spending power.
Second, it’s the increasing worldwide adoption of mobile and wearable technologies, which have created a sort of commotion in retail marketing and have given birth to even more customer-facing channels.
Third, it’s the speed of innovation itself, where the next big thing is being rolled out almost daily.
In these unprecedented conditions, retail businesses have no choice but catch up with their customers who want fancier experiences while fiddling with their connected devices.
On a side note, this connectedness is becoming the leitmotif of today’s retail. It has given rise to the term connected spenders, who are defined as the newly emerged customer segment ready to part with some of their pretty high discretionary income to buy online (including premium products).
To get ahead of the competition for today’s shoppers, online retailers are expected to deliver ever more sophisticated experiences like no one else, as well as play on the old good grounds of quality, trust, and value.
Generations Y and Z as Key Buying Forces
Among connected spenders, Millennials and Gen Z are the major consumer groups of online shoppers, and their psychographics is not that straightforward as you may believe.
The Salesforce State of Connected Customer dived deep into how the psychology of the rising online shoppers differs from previous generations when it comes to ecommerce customer experience.
As Millennials inherited the bourgeois bohemian mindset from their parents, their expectations from brands are rather contradictory. Affordably priced products with a handcrafted look and feel, same-day delivery of last-minute purchases, instantaneous customer support—essentially, it can all boil down just to convenience. This magic word is key when it comes to selling to Millennials. Maybe, they are not yet ready to commit to such life-changing purchases as real estate and cars, but they do shop online on a daily basis, and they want to do it effortlessly.
Gen Z’s have been growing at the time of the technological boom and for this reason value innovation and cutting-edge digital experiences.
To appeal to these picky cohorts, ecommerce brands have to follow the latest developments in the industry. Yet, brands should remember that innovation for innovation’s sake is pointless unless they actually make customer experience better by addressing true pain points.
Mobile-First Ecommerce Customer Experience on The Rise
The desktop is waving us goodbye as mobile usage takes over. Connected spenders are called this for a reason, and digital retailers should respond by tapping into new opportunities that m-commerce brings them.
In 2018, smartphones have finally outperformed PCs and tablets in the competition for online shoppers. According to PwC, 24% of online purchases were complete via mobile devices, compared with 23% done via a PC and 16% via a tablet.
Mobile shopping is gaining popularity for the most part because it makes ecommerce customer experience smooth, with no physical and emotional barriers, such as checkout queues, paid parking, poor in-store assistance, etc.
Customers Want to Combine Online and Offline Channels
As customers still want shopping to be filled with human interaction, mixing online and offline channels is getting ever more popular. For example, the click-and-collect model that originated in the UK has expanded worldwide, without leaving the US aside. Such integration of channels is particularly effective for online sellers who need to understand customer requirements precisely and serve the most relevant product or service.
Digital Payment is a New Norm
Despite security concerns, the number of digital transactions is growing. Over 51% of customers paid bills and invoices or transferred money via the internet in 2018, according to PwC.
In-store mobile payments are also booming thanks to the expansion of eWallets. The share of such transactions escalated by 10% and reached 34% last year (Global Consumer Insights Survey 2019, PwC).
Retailers need to cater for mobile-bound customers and potentially boost their loyalty with specialized discounts, mobile-only special offers, single-tap payment options, or releasing branded mobile wallets (just like Starbucks did).
Ecommerce Security Remains a Concern
Payment security is generally one of shoppers’ biggest concerns, especially if they use mobile applications loaded with personal data. A single data breach can ruin all the efforts you do to polish ecommerce customer experience. To engrain trust in connected spenders’ minds and ensure no security-related issues tarnish their journey, merchants should invest carefully and integrate only those solutions that have passed the test of credibility over time.
These include such renowned mobile wallets as Apple Pay, Google Pay, and Samsung Pay, which can employ transaction tokenization, fingerprint verification, and secure PINs to keep fraudsters away.
To reinforce the security of payment transactions in your web store, it is also important to choose reliable payment gateways and implement additional security measures, such as hosted order post, silent order post, or platform features that we discussed in the article about ecommerce payment gateways.
Contextual Commerce Is Still Booming
Today’s customers don’t want to be limited in their choice of shopping destinations. Expect them to want ‘everywhere shopping’ with a chance to buy a product wherever they see it. This tendency is embodied in contextual commerce and heralds largely impulse-driven purchases from curated product reviews and social networks, such as Pinterest, Facebook, and Instagram.
On the one hand, this lowers retailers’ ownership over the shopping context to some extent and can’t guarantee brand integrity. On the other hand, contextual commerce offers new stimulating channels to engage online buyers where they are, with no need to try hard to make them come to your online store anymore.
Voice Commerce Keeps Growing Thanks to AI
In 2018, 9% of shoppers used voice ordering to shop weekly (Global Consumer Insights Survey 2019, PwC). It is gaining traction globally with voice-operated virtual assistants ready to order for you in the blink of an eye.
For digital retail brands, voice ordering means they just need to become the number-one choice among competitors to naturally spring to their customers’ mind when they are about to utter their order. While this is something of marketers’ duties to engrain it in customers’ subconscious, one of the hands-on ways is to create voice-targeted, algorithmic marketing campaigns in partnership with today’s go-to virtual assistants from Apple, Google, and Amazon.
On-Demand Delivery Goes Beyond Logistics
Dealing with missed or long deliveries, as well as putting together batches of parcels before bulk shipments used to account for the biggest problems in the digital shopping realm. Now, customers no longer want to wait several days till they get what they want, and they are ready to pay for quick service.
Customers’ desire for speed and convenience first motivated larger market players, such as DHL, to offer on-demand delivery options, and then led to the growth of transportation companies focused entirely on this delivery paradigm. Postmates, UberRUSH, Instacart, Google Express—the list of fast delivery providers keeps growing as more businesses understand that customers today value their time more than ever.
On-demand delivery has become so popular over the past few years that it went beyond the transportation of goods. On-demand laundry services by Rinse, 24/7 healthcare services by Doctor on Demand, and even rides and care for kids by Kango—these examples show that shopping online for goods and services is getting even more centered on customers’ individual needs.
Innovations Change Shopping Preferences
In 2018, eMarketer analyzed customers’ attitude to various shopping and delivery options. The Retail 2025 Shopper Study proved the popularity of the mixed approach to shopping: in particular, about 60% of respondents preferred to shop in physical stores using interactive screens and self-checkout via mobile devices. This doesn’t come as a surprise if you take into account customers’ dislike of queues and need to feel the product before buying.
Still, the popularity of physical stores is likely to decline soon as cutting-edge technologies keep transforming ecommerce customer experience. The same study showed that about 40% of customers voted for the use of VR to virtually try items on.
While home delivery remains popular, technologies offer new opportunities to make shopping more convenient. More than 30% of customers are interested in ordering in smart cars or via in-home product order buttons, which means that shopping is getting as close to the customer as possible.
How Ecommerce Brands Can Adopt to the Changes
For ecommerce brands in 2019, it should be intimidating to see so many disruptions underway. Together with the growing competition, this makes for a not-so-friendly business landscape.
To confront it for the sake of providing the very customer experience that customers crave, it’s first necessary to study the customers themselves—be they Millennials or Gen Z or, more broadly, connected spenders.
Such a study should be complemented with developing buyer personas to understand the drivers and barriers in customers’ purchasing decisions, as well as their common behavior and individual journeys. This applies equally to low-cost, medium-price, premium, and luxury retailers.
Additionally, modern ecommerce just screams for broad and versatile technological partnerships with third-parties from all walks of the industry— development of mobile applications and introduction of AI capabilities, enablement of secure digital payments, optimizing shipping and delivery, and more. This move makes it possible for digital retailers to cover the entire variety of channels where their customers can come across their brands—not only through actual ecommerce platforms, but also via branded mobile apps, aggregated marketplaces, social media, messengers, virtual assistant apps, and connected devices.
But before all of that, it’s really critical to think about creating a dedicated ecommerce customer experience team. Someone needs to take charge of the entire engagement initiative, envision and implement technological alliances, drive changes and sustain success in customer relations. Otherwise, delegating the bits and pieces of the CX strategy to different departments with no dedicated coordinators will only result in roadblocks on the way.
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