Meet the Moment with Online Experiences Consumers Expect this Holiday Season

Press enter to search
Close search
Open Menu

Meet the Moment with Online Experiences Consumers Expect this Holiday Season

By Julia Fearn - 10/06/2020

To say the last five months have been turbulent for retailers would be an understatement. This moment in history we’re collectively experiencing has put intense pressure on retailers to quickly adapt to changing consumer behavior, as well as to new government regulations meant to protect workers and the public.

Pandemic or not, the holidays are imminent. And for retailers, this is the time of year when they typically go from the “red” to “black.” This makes the need to rethink the customer experience being delivered that much more urgent. In addition, the pressure for online teams to bridge the revenue gap as a result of offline and instore sales being impacted this year means the pressure is really on. 

Retailers are fully aware that shopping behavior has changed. But it’s not only shopping habits and behaviors that have changed; so has the general retail environment, partly due to rapidly changing COVID-19-related regulations, which in the U.S. vary widely from state to state and even county to county.

Our recent consumer report, which surveyed shoppers in the U.S. and the U.K., was a real eye-opener and revealed just how quickly and dramatically the shopping landscape changed in just a few months. Some of the findings include:

  • One in two consumers currently do more than 75% of all their shopping online; one in four consumers buy more than 90% of what they need online.
  • About 35% of shoppers said they’ll shop online more this holiday season than they did before the pandemic; meanwhile, just 10.6% of shoppers said they will do less shopping online than they did prior to the pandemic.

COVID-19 has accelerated the shift to e-commerce, which has been slowly eating away at department store profit. In 1992, department store sales accounted for 14.3% of all retail sales, falling to 3.7% in 2019, according to the U.S. Commerce Department. This backs up our survey that found that 30% of consumers feel comfortable returning to stores, with 18.9% of consumers planning to hold off on shopping in-store until 2021.

While services like buy-online-pickup-in-store (BOPIS) and curbside pickup are important, it’s clear that retailers can’t depend on foot traffic to boost sales during a pandemic.

This rapid move to online commerce requires a swift and immediate response from omnichannel retailers if they want to be successful and remain competitive this holiday season. A U.S. Census Bureau report estimates that U.S. retail e-commerce reached $211.5 billion in Q2, up 31.8% from the first quarter of 2020 and accounting for 16.1% of all retail sales in Q2. This points to a groundswell for online retail sales going into the last quarter of 2020, which is definitely positive news for the sellers who have done the work to keep up with changing consumer needs and attitudes towards online shopping.

More than 36% of the consumers stated they now shop with more retailers than they did a year ago.

Small changes to the customer experience can deliver big returns

Customer loyalty is waning. More than 36% of the consumers we surveyed stated they now shop with more retailers than they did a year ago. Retailers must focus on not only increasing brand loyalty but on gaining new customers. By leveraging data to create and deliver a highly personalized shopping experience, retailers can cater to existing customers and first-time shoppers, many of which may be new to e-commerce.

The upside is that two in three consumers expect — and even demand — relevant shopping experiences, and more than half notice and recognize when retailers are actually delivering personalized experiences. Today’s consumers are savvy and know they stand to benefit when retailers know what they like or don’t like.

Technology that leverages machine learning can empower the customer much like a store associate who has been with your company for many years, so that every single interaction and touchpoint a shopper has with a brand is personalized. It’s clear that the need to make sure the digital experience is on par or close to the instore experience is of huge importance this year.

Whether that’s through relevant recommendations, much like someone would get from a store associate, or low stock notifications, something a customer would physically see instore, or even popular or trending items that could be communicated in person.

Bringing the physical store experience online isn’t just about augmented reality (AR) or virtual reality (VR) experience; many retailers employ much more subtle techniques to ensure the shopper is receiving the best and most contextually relevant online experience possible. As a result, these experiences increase the propensity to purchase, convert and boost revenue per visitor (RPV).

While this holiday season will be unpredictable and unlike any we’ve seen in our lifetime, there are still strategies retailers can leverage to prepare for the holidays — the issue is where to focus for maximum impact.  Retailers should focus first on the two biggest revenue drivers, product recommendations and social proof.

Product recommendations are only truly effective when they incorporate visitor context.

Product recommendations are the lifeblood of retail; however, the effectiveness of recommendations is directly related to relevance and understanding the visitor’s context (browsing data, previous purchase behavior and any other data a brand might have to derive insights about the individual). In order to truly leverage the power of recommendations, retailers must use real time customer journey data.

Recommendations powered by AI and deep learning are focused entirely on the customer versus what interests another shopper, and identifying predictable sequences based on previous behavior.

Here are three tips to assess how well your recommendations engine is performing include:

  • Tip #1: Are your recommendations well-positioned across different product pages? Also determine whether recommendations should be more prominent, without interrupting shoppers from their journey.
  • Tip #2: Make sure the products recommended in the carousel are truly relevant, not only in terms of relevance to that product being viewed, but to the customer specifically.
  • Tip #3: Recommendations should be an indispensable tool for both merchandising and marketing teams. AI-led recommendations adapt to customer behavior in real-time and utilize a wide array of data points like assortment, pricing and customer history. The ability for the marketing and merchandising teams to implement recommendations and activate bespoke business rules enable them to boost, bury and run campaigns without having to write a line of code.

Another proven technique to increase conversions and RPV is social proof. By using customer context and data, social proof can be used in a variety of ways. Because social proof is based on real time customer data, and is a “set and forget” tactic that can continue to run and update “hands free,” it is a real plus during the extremely busy holiday season.

Two key tips for leveraging the power of social proof include:

  • Tip #1: Trends vary from region to region. What’s popular in New York may not be popular in Los Angeles, etc. “Supercharge” social proof by using contextual data to target customers based on location in real time.
  • Tip #2: Luxury retailers can reverse engineer social proof to highlight exclusivity. By letting customers know they were one of the first to discover a specific product that day relays a sense of exclusivity and privilege, which also recreates some of the aura of the instore luxury experience.

This is an incredibly turbulent time for retailers. Sellers that went into 2020 thinking this year would be “business as usual” had to throw out the strategies, roadmaps and plans made in Q1. It’s absolutely critical that retailers adapt, creating a new plan that relies upon the teams and technology that will help them to be more agile; this places sellers in a better position to adapt to the accelerated shift to an e-commerce-driven retail economy.

Julia Fearn is VP customer at Qubit.

More on Customer Experiences

Consumer goods and retail insiders provide a behind the curtain look at the technology setting the pace for change across the industry today. This webinar series explores the solutions your company needs to drive growth in an increasingly competitive and ever-shifting marketplace.

The past six months have been a trying time for many retailers and satisfying customers has become a difficult feat under the circumstances. Learn which 7 retailers are still meeting customer expectations in this special COVID-19 customer satisfaction ranking based on interviews with 30,787 customers from April to September.

When it comes to grocery fulfillment, Walmart tops the list for buy-online-pickup-in-store services, while Sam’s Club ranked first for curbside pickup. Find out which other retailers are highly ranked and which parts of the experience matter most.