Commerce is rapidly evolving as consumers' expectations and behaviour patterns shift. What buying behaviours are we seeing right now changing the future of eCommerce for the next few years? What should a brand do to ensure expectations are met in the new era of commerce?
This all happens during an era of uncertainty and high financial risk. We have analysed top D2C brands, talked to futurists, Shopify and our key partners to figure out to make sure you can stay on top of the latest trends and changes in buying behaviour.
1. Young generations will buy more directly on social media.
For Generation Z the most popular social media platforms are Youtube, Tiktok, Instagram and Snapchat. Compared to other age groups they are more likely to participate in social media - not just giving likes and comments. They also use social media searching brands which might be the one factor behind the popularity of social commerce compared to other age groups. Generation Z has a spending power and also they have a huge role in how new trends and virals are born through social media.
In social commerce you make shopping easy directly on social media platforms with only a few clicks. Shopify is one of the modern ecommerce technologies which has direct integrations to social media platforms and you might easily use some add-ons like video-online shopping tools to connect your store and streams.
2. Older generations will search and buy more online
Even though we see people will spend less money on buying, they will shift product ordering online. This does not mean that physical channels have less impact. People who are digitally native have understood how easy the ordering process itself is online. For those who have bought only a few times, the ease of buying and the experience of how the package is delivered are the most crucial factors if the customer will buy twice.
3. Your subscribers who has not bought might be your best salespeople
As we have seen many still rely on the AIDA (awareness, interest, desire, action) model in customer acquisition which works but also we have seen in the omnichannel era that the buying process is not linear and thus is not your sales funnel. You might actually have a lot of subscribers who have not bought anything but they might be your best marketeers and micro-influencers. So our tip is to use some time to analyze who is your most active subscriber and what does he or she do?
4. Consumers rely on their buying decision on price, delivery, user generated content (UGC) and the environmental impact and also what additional services are available.
How to improve conversation rate on your online store is a key question to develop your ecommerce sales. As consumers will spend less and are following prices more closely they will compare the delivery times as a second factor. In addition, reviews also play an important role, but even more real pictures and videos from the users will have a bigger impact. Also, consumers will evaluate more than ever how sustainable the product and brand is, especially when the price is the same between two or more brands.
5. Purchase flow needs to be easy and mobile friendly. Mobile can bring up to over 90% online sales.
The next two years people will spend most of their time on mobile. Let’s see how mobile usage will change in future when we have more home appliances connected to the Internet of Things and Alexa voice AI will be more popular to help in daily basis and we have more AI technology solutions which are based eg. on ChatGPT.
On mobile devices it is important that the actual user experience is as easy and fast as possible. Younger generations seem to prefer agile customer journeys with very few obstacles. Also the use of express payment methods such as Apple Pay and Google Pay have been increasing.
6. People will use more chat and video-online shopping especially when buying eg. furnitures or something which is expensive eg. car. Live video also plays a vital part when launching new items or product categories.
One angle of great experience is customer service. Still many ecommerce companies lack the presence of a live chat. Besides, new technologies like video online shopping are not used even though you can bring “a physical store experience” to a digital environment. Immerse video can make the shopping experience much more enjoyable and in items where the size and scale are key, they can play an essential role of helping customers to realise how items would for example fit in their home. We have just crossed the surface with video shopping and 1-1 video shopping possibilities in luxury retail.
7. People are interested in having an option to buy pre-owned products. Sustainability as a trend keeps on growing. Can you offer second hand products, more environmentally friendly delivery or otherwise commit to sustainability?
Sustainability becomes more inevitable and sustainability should be a high priority for all brands who care for the people and the planet. The issue for many is that it’s far away from profitable business, especially within goods where used goods are sold with the value of a few dimes. Yet, this trend is unavoidably important. Many D2C brands have chosen to explore sustainability in production, but done second hand with different partners such as trusted marketplaces. Part of sustainability is also to offer services and kits, where you can fix yourself a broken or dirty product. Sustainability is also a category, which would benefit from new innovations within unnecessary returns, product lifetime duration extension and moving away from the vicious circle of fast fashion and sudden trends.
8. People have not stopped hunting for discounts
Certain customer profiles are still price sensitive. This has increased lately in many European markets due to inflation and skyrocketing electricity prices. This means that campaigns do rock the boat, but it’s also a question for the brands. How to make campaigns, which feel tempting, but can be profitable. Typically this can be conducted by quantity discounts and offers, which are suited for specific customer segments.
9. Omnichannel retail
Retail is in a constant evolution! Post the pandemic customers are increasingly visiting physical locations besides shopping online. Therefore even Shopify has suggested to just talk about one term, namely “commerce” instead of the old polarised way of dividing physical retail and online retail into their own separate silos. The question has also been asked lately whether D2C is dead, and if so will it be replaced by so-called CTC (Connect to Consumer) models? Yet, best brands seem to build strong communities and rely heavily on constant storytelling, good examples being Liquid Death and Feastables.
Perhaps D2C isn’t quite dead yet, but pure D2C online per se is getting more and more challenging. It’s likely that brands need multiple ways of attracting their customers with their own concept stores and well thought out pop-up stores. The benefit for Shopify brands is the power of Shopify POS, which can collect data from brick & mortar locations in addition to online data. Brands like Steven Madden and Allbirds have been utilising this already for some years. These brands really rock on a holistic customer experience where their physical retail stores share the same omnichannel experience than on their online stores.
What's our omnichannel webinar here: 5 ways to create a winning omnichannel experience in the Shopify ecosystem
10. Keeping your existing customers happy becomes even more important, as it’s more expensive to gain new ones and they’re quite careful with their money.
Customer acquisition costs are skyrocketing and customer acquisition is also becoming harder than before. Therefore there has been a shift towards retention marketing. This becomes important once you have tens of thousands or more existing customers. How to make sure your key customers are keen on coming back?
Less focused related topic is how to educate average customers to become better customers in terms of purchase frequency and customer lifetime value. Due to the complexity of the market, customer lifetime value is measured with shorter time-windows such as upcoming 90 days or one year typically being a maximum.
Keeping existing customers happy is not just a marketing stunt, but it should be an ongoing strategic process with actual quarterly goals. For brands selling omnichannel it’s also key to activate retail customers who have returned after the pandemic.
Final words
Let the world be your commercial oyster. Most importantly make sure to focus on your core game. What is your value proposition? What differentiates you from the market? What are your customers doing differently this year than last year? How to make sure you are one step ahead of the competition?
Writers,
Pinja Kuitunen
Mikko Rekola