Many of today’s retail options are online only or have an online component. Entrepreneurs in both the e-commerce and brick-and-mortar spaces must understand how this shift affects consumer expectations and loyalty so they can target and serve customers effectively.
As online retail continues to grow in popularity and strength, entrepreneurs must stay aware of current consumer purchasing trends and understand what these tendencies mean when pinpointing their target audience.
Trends in online purchasing habits
According to U.S. Census Bureau data, in the second quarter of 2022 e-commerce comprised 14.8 percent of total sales. This number is expected to grow, so it’s essential for online retailers to maximize consumer interests and tendencies to accommodate their needs and boost sales.
Here are five online purchasing trends online sellers must consider.
1. Consumers expect personalized experiences in their online sales.
Consumers expect companies to know their preferences and understand their behavior — and they want sellers to keep that information in mind when communicating with them.
In a recent consumer survey report from 3Radical, more than 64 percent of consumers surveyed said they expected brands and retailers to tailor offers to them — and more than 52 percent said they got frustrated when they received irrelevant communications. Lack of personalization has significant costs; more than 41 percent said they would be less inclined to shop with brands that didn’t deliver personalized communications.
To boost personalization efforts, consider the following:
- Collect data on customer preferences and habits. Gathering data on customer preferences and shopping habits — and using their past purchase data — helps retailers tailor their website and email campaign experiences to customers. Website and email personalization can increase conversions, keeping customers loyal and countering their tendency to shop around.
- Use your POS system to inform personalized campaigns. Retailers don’t have to spend thousands on marketing analytics software. Systematic collection and data analysis with standard tools can help inform personalized campaigns. For example, if your POS system features include a customer management module that links sales to each customer, that gives you essential data to use for personalized campaigns.
- Monitor devices and channels to personalize campaigns. Devices and channels can provide excellent opportunities to customize the customer experience. This requires understanding where and how consumers interact with your brand, so you know how to appeal to them. For example, if a consumer likes an Instagram post, you can send them a special discount for Instagram followers to prompt them to take action. Additionally, you can reach mobile device users via geofencing, SMS marketing and other mobile-focused marketing strategies.
Personalization is crucial to email marketing. It’s also essential to outline a clear goal for your marketing campaign, target your customers, and use market segmentation to narrow your audience.
2. Consumers have more power than ever.
Customers have more power than ever, and online retailers must do more to earn and keep their business. Here are some ways today’s customers are in control:
- Consumers can effortlessly compare prices and competitors. Consumers can access hundreds of your competitors with the touch of a button. Smartphones and mobile apps make price comparisons and instant shopping decisions easier than ever. Even if customers are loyal to some retailers, they can easily switch to competitors when inundated with attractive offers.
- Consumers can share their experiences online. In the age of social media and online reviews, customers can share their experiences, likes, and dislikes with hundreds or thousands of people via Facebook, Twitter, Snapchat, Instagram and online review sites. Customers who have a negative experience can tell the world about it with a bad review. Conversely, they can share their excellent experiences and positive interactions in good customer reviews.
Online retailers’ goal should be earning an excellent reputation through customer satisfaction. To do this, you can take the following actions:
- Harness the power of word-of-mouth advertising. You may not be able to stop customers from shopping around, but you can use the power of word-of-mouth recommendations to increase your reach and build your brand.
- Get customers’ attention early. Retailers must fight for a share of customers’ attention early in the sales funnel as customers shop around.
- Create a frictionless buying experience. You must also reduce friction on your e-commerce website so the customer’s experience is pleasant and seamless.
- Build a relationship with customers. The sale is never final. Retailers must earn customers’ repeat business by offering attractive promotions, loyalty programs and perks, community building, and excellent customer service.
3. Consumers take their privacy seriously.
In a recent KPMG study, 76 percent of consumers surveyed said they wanted greater company transparency about how their data is used. Additionally, 85 percent of consumers in a McKinsey study said that knowing a company’s data policies is important before making a purchase. Nearly half (46 percent) said they often or always consider switching to another brand when data policies are unclear or aren’t divulged.
As much as the online environment provides opportunities to collect data and information on customers’ preferences, likes and dislikes — and to enable customization and personalized experiences — take customers’ privacy concerns seriously. Never sell customer email addresses, don’t spam them, and ensure you manage their data securely.
To create a secure e-commerce platform, implement SSL certificates and multifactor authentication. Consider using a VPN to create an encrypted connection to a secure offsite server as well.
4. Customers want easy checkout and payment options.
Online shoppers want a quick and easy checkout process. Here are a few ways to accomplish this.
- Save customer checkout information. Saving your customers’ billing and shipping information is an effective way to create a fast checkout process. This is a great solution for regular customers.
- Offer an account-setup option after purchase. New customers may not want to take the time to set up an account before completing their purchase. Consider offering them the option to set up an account after their purchase using data from your checkout page to populate the fields.
- Allow customers to register via another account. Use a federated identity for identification and payment by allowing new customers to register via the login credentials for their Google, Apple or Facebook account. You could also set up shop on an e-commerce platform that allows customers to have one account for multiple merchants (more information on this option below).
- Offer multiple payment options. You can make more sales with more e-commerce payment options. If you don’t accept a customer’s preferred payment form, you may end up with an abandoned shopping cart and a lost sale. Choose a payment processor that gives customers multiple payment options, including peer-to-peer services like PayPal and Venmo and mobile wallets like Apple Pay and Google Pay.
5. Sustainability is vital to online shoppers.
Online customers are more aware of their purchasing decisions’ effects on the earth’s resources. According to the Global Sustainability Study 2021, 85 percent of respondents say they’ve shifted their purchase behavior toward sustainability. In fact, 61 percent of U.S. consumers say sustainability is an important factor when deciding to buy a new product, and over a third of consumers say they’re willing to pay more for sustainable products and services.
Using green innovations like low-waste business practices, non-polluting manufacturing, and biodegradable packaging shows customers you care about sustainability and may help drive targeted audiences to your site and increase customer loyalty. For instance, consider letting customers know that you use eco-friendly packaging practices and sustainable items in product manufacturing. In many instances, green business practices, such as using solar power, can also save you money.