Why Consumers Are Demanding More from E-Commerce Companies
E-commerce sites were on an unprecedented tear during the pandemic era. A study by Adobe showed that in 2020 alone, e-commerce sales ballooned by 77%. However, these figures are a distant memory to online retailers now grappling with changing market factors post-COVID. With growth slowing to a mere 10 percent and set to fall even farther this year, has e-commerce reached its apex?
For consumers choosing to trek back to brick-and-mortar stores rather than shop at home, the answer may be yes, for now. Although the pandemic shuttered in-person retail experiences and supercharged e-commerce growth, it came with one large unintended consequence. E-commerce sites became complacent in their successes just as retailers began to roll out compelling in-person experiences irreplicable online. Winning these consumers back will require unprecedented levels of personalization and a commitment to offering consumers a superior shopping experience, not merely a more convenient one. Although a sizable departure from today’s e-commerce formula, such a reinvention is the only way to safeguard growth and secure new business in the coming years.
Ads Aren’t the Only Answer
One of the biggest points of contention between consumers and e-commerce brands is the amount of effort expended in converting leads to sales. Many e-commerce sites today are quite simply trying too hard, chasing slightly interested consumers all over the internet with pop-up banners and targeted ads. This once-successful approach is no longer working, with recent research from AiBUY and third-party research firm Censuswide showing more than 80 percent of consumers will go out of their way to avoid ads, and over a quarter (26 percent) will even pay not to see ads. One more sobering statistic for ad-happy online sellers: One in five consumers recently admitted that too many pop-ups from a brand/retailer will cause them to abandon their purchase completely.
For many e-commerce sites, even the concept that ads aren’t always effective might come as a shock, as few marketing tactics are as easy to execute (or evaluate for ROI). To be fair, this isn’t a call to completely abandon ads as marketing tactic. However, as the consumer research stats above illustrate, traditional advertising tactics just aren’t converting consumers to customers like they used to. In fact, it’s more likely consumers are going out of their way to avoid them. For e-commerce sites, new and more innovative tactics are required to survive and thrive.
Build an Experience, Not a Platform
For nearly four decades, e-commerce sites have relied upon their ability to put products in the hands of consumers efficiently as their sole driver of success. To maintain this momentum in the coming years, far more effort is required. The next generation of e-commerce still relies on speed but introduces new elements, such as experiential shopping and spontaneity. As the reinvigoration of brick-and-mortar stores has demonstrated, customers don’t want to merely shop, but be entertained while doing so.
Brands are already re-evaluating their online presences to accommodate this shift. Fanatics, the online sports retail giant, took a step in this direction last July with the launch of its shopping app “Fanatics Live.” The app operates in direct contrast to most sports shopping apps on the market. Instead of merely offering a mobile platform for purchasing jerseys and other memorabilia, Fanatics’ tech serves up “creator and partner-focused programming based on user interests.” This content-first approach makes purchases a part of a broader experience, rather than the end goal.
The other big advantage to a content-first mindset is the potential to accommodate for impulse buys; historically only an advantage of brick-and-mortar stores. This trend has penetrated the virtual world, with more than half of online shoppers today making impulse purchases. With consumers no longer spending days or even hours considering many of the purchases they make, e-commerce sites built for methodical and product-driven shopping will struggle. Meanwhile, sites like TikTok Shop (which use a curated feed to encourage users to buy products they may have never heard of), are in a better position than ever to succeed.
E-commerce sites that have found success over the past two decades may not survive through to the next one if they’re unable to adapt to today’s consumer shifting priorities. Social shopping, an umbrella term encapsulating tech like experiential shopping and platforms like TikTok Shop, is slated to reach $3.37 trillion by the end of 2028, nearly the market size of the entirety of retail e-commerce in 2019. The key to e-commerce thriving this next year and beyond lies in adopting new strategies and technologies to meet consumers where they are.
Randy Bapst is the CEO of AiBUY, a provider of in-content commerce solutions. Bapst has a 30-year plus background in growing businesses across industries, identifying high-growth niches in emerging markets to launch and scale successful companies. His early career includes time in the U.S. Marine Corps, where he was a crew chief on Marine One for Presidents Carter and Reagan. Bapst also attended the MIT business executive school for data analytics.