Online shopping continues to be the main growth driver for retail brands, especially with the viability and role of physical stores and malls in question. As an example, by the end of May 62-year-old retail chain Payless ShoeSource will have shuttered all of its 2,100 stores nationwide, becoming one of the latest major victims of the current retail climate.
While it would be unfair to blame Amazon for Payless’s demise, it’s hard to deny the impact that Amazon is having on the retail market and also on consumer shopping behavior.
In our most recent consumer survey, we asked more than 400 U.S. shoppers questions about their online habits. The results offer up some valuable takeaways for brands on what drives online shopping choices.
Differentiating against Amazon
Considering how many brands there are to choose from, surprisingly few sites are browsed before shoppers make a purchase.
Over 57 percent of consumers visit two to three websites before they purchase something, with 35 percent of consumers stating that half or more of their shopping will be on Amazon. What this tells us is that while most consumers shop on multiple websites, the chances are one of them will be Amazon.
Online retailers may have less of a chance to engage consumers than they thought. But that doesn’t mean smaller brands necessarily have to lose out if they can snag that one to two remaining spots on the consumer’s list of go-to sites.
Benedict Evans, a partner at Silicon Valley venture capital firm a16z, recently presented a talk that discusses the concepts of retail as logistics and retail as tastemakers. He says: “The internet lets you buy anything you could buy in New York, but it doesn’t let you shop the way you can shop in New York.” While Amazon has nailed the logistics aspect in retail, there’s room for brands to surpass Amazon when it comes to inspiration.
Omnichannel retailers have the ability to transfer the in-store experience to match what they deliver in-store. This ability to provide a 1:1 experiential brand experience has the potential to go far beyond what Amazon’s logistics-driven approach is providing.
Consider the Nike buying experience on Amazon versus what you encounter in their stores and the Nike website. Customer-centric brands like Nike that focus on providing customers an experiential shopping journey have an opportunity to use personalization as their differentiator and competitive advantage.
Ease of use is a top consideration for shoppers
Why do so many shoppers make purchases with Amazon? In our survey, which focused on the shopping experience, 30 percent of consumers responded that: “Amazon makes it easy for me to find the products I want,’” as the top reason for shopping on Amazon. Second to this is Amazon stocking everything (27 percent) and delivery times (19 percent). The lowest rated response was “Amazon stocks the highest quality products” (4.8 percent).
There is an effortlessness to the online shopping experience that Amazon has established as the norm, and it’s something that shoppers expect from any online shopping experience.
But notice that the top reasons for shopping on Amazon still revolve around convenience and logistics, and not product quality, for example.
Shoppers want product recommendations
Consumers are very aware of product recommendations and have, again, come to expect them during their visitor journey with any brand. This extends to the likes of Netflix and Spotify, which are the experts are delivering personalized and scalable 1:1 experiences to millions every week.
In fact, nearly 70 percent of U.S. consumers are comfortable sharing preferences and data with brands so they can create a more relevant experience. Shoppers want to save time browsing and are willing to share their data with brands to gain efficiency. Nearly half of consumers in our survey find product recommendations very useful to the shopping experience, with a further 49 percent of shoppers saying they’ve bought something that has been recommended to them.
Amazon is a pioneer when it comes to product recommendations, telling consumers what others have purchased after viewing this product or giving them complementary items to consider.
Curating personalized experiences, however, can be so much more than product recommendations or your name used in an email. Brands need to inspire a customer with a full suite of personalization techniques across every customer touchpoint.
Amazon presents a massive catalog without necessarily a regard for one seller over another. When a shopper enters a brand’s site, there are many ways to expand beyond product recommendations with other personalized techniques—ranging from social recommendations, to what’s trending in fashion, to ideas for replenishment based on a previously purchased product, to low stock pointer for your size or seasonal suggestions regarding apparel item, etc.
A single brand is not limited to strategies that must apply across a vast catalog of products and SKUs. Tastemaker brands can offer a signature brand experience, magnified by relevant personalization techniques that provide intelligent recommendations based on every click or swipe of the visitor journey.
Don’t give them a reason to walk away
Tastemakers shouldn’t forget about logistics either—these are important too and a major way that Amazon has changed shopper mentality.
When asked, “What’s the biggest reason that you don’t/won’t buy from a retailer online?” over 40 percent indicated that they don’t click the “buy” button when free shipping was not offered. One way brands can avoid “abandoned cart syndrome” is by incorporating shipping costs into product pricing to make the experience approachable and take away reasons for them to shop elsewhere.
But there are other ways to seal the deal—customers respond to all kinds of incentives to keep them from abandoning their shopping cart. Look for ways to offer subsequent discounts, referral bonuses or free samples to keep them engaged. For example, as the visitor displays behavior indicating they are thinking of leaving the site, a pop-up can appear highlighting products they have added to their basket and perhaps offering an incentive to convert.
While Amazon is great for consumers who know exactly what they need, what about customers looking to be inspired? There’s an opportunity here for tastemaker brands to compete and win.
Brands should strive to create targeted and personalized messages and campaigns to not only acquire customers but to get that second, third and fourth purchase. Smart segmentation and creative offers forge new opportunities to keep shoppers happy and coming back time and time again.
Retailers can utilize personalization to transform their brand’s shopping experience by anticipating the needs of customers through deeper insights into their browsing behavior and providing validation to their purchase. This optimized customer experience will lead to customer loyalty, lifetime value and ultimately impact the bottom line.
Qubit provides personalization software to online retailers and brands.