Last year was a rollercoaster, to say the least. We sat down with Kate Massey, Head of APAC at Searchspring, to examine the highs and lows of 2020, and what retailers can learn for a fruitful 2021.
Online retail has been experiencing history-making changes in the last 12 months. What have been some of the most significant changes that you have seen in the year?
For two weeks in March, everything seemed to stop. Purchase decisions grounded to a massive halt as we held our collective breaths and waited to see the extents on the economy the pandemic was about to bring. In speaking to a lot of business owners at the time they were concerned first and foremost about the impact on their staff, followed by their cash flow, revenue and supply chains. There was a lot to contend with and naturally, a lot of uncertainty.
Trends then quickly started to emerge that no one saw coming at the start of last year. Home office furniture was literally flying off the shelves (both in-store outside of lockdowns and online), homewares and the home improvement market saw sales skyrocket and panic buying took off. No matter the retail vertical – groceries, pet food, alcohol deliveries and health and beauty – retailers needed to quickly adapt to stay on top of their orders and spikes in sales. With travel off the cards, consumers switched their spending habits to cocoon at home and reallocated their expenses.
What changes in retail have surprised you the most?
The rate of online adoption was unprecedented. Shoppers that have either never shopped online, or only shopped for certain things, became regular online shoppers overnight across a wider range of categories – and these shoppers are here to stay.
The flexibility many retailers are now offering as mainstream includes trends that rapidly increased in popularity like ‘Buy online, Pick Up In-Store’/ ‘Click and Collect’ and free returns in-store, which are focussed on improving the customer experience.
The reliance on social proof in purchasing decisions such as top reviewed products and user-generated content are often drivers to building high converting shopping journeys.
Subscriptions whilst not new are becoming more prevalent. Food deliveries, pet food, alcohol and contact lenses were all standard offerings before. Fashion and apparel retailers like Fabletics are also looking to gain more predictable revenue by offering VIP membership for weekly or monthly outfits – a trend likely to be adopted by more retailers looking to grow recurring revenue.
How will some of the more pivotal changes affect the way Australian retail business operations, and do you expect these changes to last over time?
Retailers that are focused on providing best-in-class service will continue to thrive in an increasingly competitive online shopping world. Retailers now more than ever need to create memorable experiences that keep shoppers engaged and turning them into lifelong fans.
Merchandising online is tipped to receive more attention as retailers look to bridge the gap between in-store and online experiences with technology doing more of the heavy lifting through automation of business rules and logic. It’s pleasing to see the volume of jobs being advertised in e-commerce and digital. A sign that retailers see e-commerce sales here to stay and are doubling down their investments to improve conversions for the year ahead.
Personalised online experiences will continue to be driven by increasing consumer expectations. A generic experience will no longer cut it. Here’s a stat retailers should no longer ignore: 91 percent of consumers will buy from a brand that offers a personalised experience.
We’ve entered a new era of shopping, and we are now accustomed to Netflix, Shopify and Youtube recommendations based on history and preferences. This very trend applies to retailers. It’s important not to ignore the elephant in the room, create the personalised experience your shoppers can not click away from.
With every change in online retail comes the added development in customer behaviour. What have been some of the most interesting changes in shopping behaviour that you have noted, and what does this mean for the industry?
Personalised shopping journeys are becoming more of an expectation than a convenience. Understanding your shoppers’ intent and helping them navigate your virtual store to find the products right for them is critical. In-store sales assistants and layouts do this well. Retailers are looking at how this can be replicated online with recommendations including complete the look for fashion, and complete the room for furniture and homeware great examples. By introducing inline banners for sizing guides, product care or blogs, and videos on finding ‘the best item for you’ can help educate shoppers and provide a level of service they used to get in-store.
Introducing categories like ‘Spring racing, at-home comfort, workwear, weddings and baby showers’ are all great ways to group products together to help shoppers find the perfect look quickly rather than scrolling through countless pages of options.
Shoppers’ expectations are at an all-time high, while their attention span at an all-time low. Creating a frictionless experience by helping them finish their cart, and presenting them with relevant product recommendations, will not only create high-converting journeys but will drive brand loyalty, at a time when shoppers’ trust has become paramount.
Changing customer behaviour can radically change a retailer’s business strategy, but not every new trend should be taken seriously. What changes do you think retailers should pay attention to, and which would be considered a ‘fad’?
Retailers building a strong brand narrative, origin story, purpose and community following will continue to thrive. As well as, delivering a best-in-class service that creates loyal customers and easy-to-shop experiences.
Brands that achieve the above will continue to move away from regular heavy discounting strategies and sales.
Personalisation is an ongoing trend across brick-and-mortar and e-commerce. How can retailers utilise personalisation to attract a new customer base, and how can it help develop stronger loyalty between brand and customer?
Understanding and building a profile on your customers will allow retailers to further bridge the in-store and online experience. Having a well mapped out customer engagement plan and membership/loyalty program that creates a loyal community can be a great tool in attracting a new customer base.
When online it’s important to remember that not all shoppers are the same. Are you showing new shoppers your best sellers, while returning your new or trending products? Do you have recommendations that are personalised for each shopper journey that provide the best chance of conversion? Do you have access to data insights to be driving your decision making around this? Understanding customers can help them shop online, and drive conversions. Retailers should be targeting ‘look and leave syndrome’ by offering hyper-relevant experiences for each shopping session.
What are some of the biggest mistakes you’ve seen retailers try to attract a new audience, and how can they prevent it from happening?
Discount-led strategies can set the stage of expecting discounts or waiting for key sales holidays like Click Frenzy. These can be great revenue boosters and when planned out to think about increasing the AOV through adding accessories, complementary products or bundles and building a database to turn shoppers into repeat customers, they can be part of an effective strategy. Companies that set themselves apart, and often for a price premium, will be those that have built a very strong and compelling brand story that resonates with their audience.
There is so much focus and money being spent on driving traffic and not enough on converting that traffic and increasing the AOV through effective site search, navigation, merchandising and recommendations. There’s a lot of wasted opportunities occurring.
Many older shoppers are using e-commerce platforms for the first time. Do you believe retailers should have a strategy to make the shopping experience easier for those who aren’t used to the e-commerce platform? Why/Why not?
Absolutely. Retailers should be aiming to simplify and make it easy to find the right products at the right time for shoppers that visit their e-commerce store. Obviously, it’s important to understand the audience. For example, fast fashion, targeting millennials, has a very tech-savvy audience. Meanwhile, new online consumers may want a simplified shopper journey with relevant suggestions and an easy user experience to find the top reviewed, best seller or trending items.
Looking into the future, I expect customers to shop in-store more than they did in 2020, which is why creating an omnichannel merchandising strategy can make the difference between a brand that thrives, and one that’s easily forgotten.
By doing so you can create a consistent shopping experience across every customer touchpoint, including brick-and-mortar, e-commerce, and third-party marketplaces. The omnichannel approach to promoting retail goods is centred around the customer, rather than the product. It’s about creating a seamless brand experience across every sales channel.
What is the most frustrating thing you see retailers do that actually drives customers away?
Having rubbish search, filtering and sorting options. There is nothing more frustrating than a lack of understanding of search intent. For example, searching for a ‘black dining chair’ and having everything black, everything chair and everything dining come up at once. This leads to you having to manually (and time consumingly) scroll through countless pages to find their black dining chair options! We’ve all been there!
There is also nothing more frustrating than trying to find the product you know they stock but you can’t recall the name of it and everything you try keeps showing zero results. Hint – always ensure your zero results page tries to get your shoppers back on track vs leaving them to bounce off or start again with a message like “Sorry we didn’t quite find what you are looking for but here’s our most popular categories (/or top-selling products)”. Trying to purchase a pair of Adidas but just keep misspelling it? I’ve been there (Addidas, Adiddas?). With synonym redirects, a misspelled word can easily solve this problem and avoid customers clicking away from your website.
Another point of friction includes generic categories that have too many products in them without the ability to search and filter to find relevant options or navigate to specific categories – for example, ‘dresses for weddings’ rather than just a ‘dress’ category, or “modern lighting” rather than “all lighting options”. I also find it frustrating when you can only filter on one option at a time vs being able to multi-select different filters meaning you need to spend time going through each option. The list goes on but you get the point. Make it easy for shoppers to find the products for them.
Many shoppers are still wary of walking into a physical store following the pandemic. To combat this for the time being, how can retailers replicate the in-store experience online?
First, invest some time in understanding the moments that matter in-store and look at how you can replicate them online. For example, shop assistant greetings can be done via chat pop-ups or building team messaging and images to the online store, using banners and inline banners to tell the brand story, promote call to actions and help them find what they are looking for. Badges on products like ‘staff pick’, ‘top seller’, ‘low stock’ and ‘top reviewed’ are also providing information a store assistant may provide in-store to help a consumer with their purchase decision. Another trick would be to merchandise products together that they would find in-store or using techniques like ‘complete the look’, ‘complete the room’ and ‘buy the bundle’.
Do you think e-commerce is a channel that will overtake traditional retail in a post-pandemic world?
Not all businesses will be created equal but I do expect to see many traditional retailers continue to see more and more sales online as they double down on their e-commerce investments, including technology solutions and their teams. I also see ‘shop online, pick up or buy in-store’ will see more educated in-store shoppers looking for a great in-store experience.
What do you believe are the biggest challenges for e-commerce businesses right now, and what could be done to address these? What are the biggest opportunities?
E-commerce and merchandising teams are often being stretched to the limit and trying to keep up with the accelerated pace of last year. I haven’t met an e-commerce team yet that is achieving all they wish to be because they are so busy. I see an investment in tech stacks to do more of the heavy lifting and free up teams to focus on strategies and understanding the data behind the trends. There is a huge opportunity to drive conversions and thrive online in 2021 and beyond. We are already seeing a level of investment that hasn’t been seen before. This is a really exciting opportunity for retailers to build lasting brands, online and in-store.
What online retail trends do you expect to see in 2021?
2021 will be the year of personalisation. Retailers will want to create connected shopping experiences that match the ones in-store. In the same breath, shoppers want to be understood and do not want their work cut out for them. After all, time is money – time wasted looking for products will result in customer loss. By providing a hyper-relevant, meaningful, and frictionless online shopping journey, you will create retention, and increase AOVs and conversion rates. Retailers that are customer-obsessed will be the winners of 2021.
On the backend, retailers will also want to maximise efforts and save time by leaning on experts and automation to carry out fast and reliable e-commerce strategies in just clicks.
Trends you don’t see being carried forward in 2021?
While I don’t see this as a trend, I do not see AI replacing humans with what we are providing. E-commerce teams aren’t looking to sub their thinkers and doers and turn their e-commerce strategy over to AI. Our solutions aren’t meant to replace merchandising decisions. Anytime we automate or make computer-generated decisions we expose them. I think while AI and automation will certainly be more prevalent, nothing will replace the calculated decisions from e-commerce experts. Searchspring, for instance, encourages merchandising teams to understand why we made the decision, and we allow you to take over if needed.
What does the future look like for retailers in Australia in 2021 and beyond?
Aussies will continue to shop online more than they did pre-COVID, making optimising the online journey top of the priority list for retailers looking to create best-in-class experiences that drive conversions and keep shoppers returning time and time again.
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