In 2023, retailers’ ecommerce experiences will continue to develop in response to shifts in consumer behaviour underpinned by ongoing innovation, and the drive to make shopping more relevant and fun. As the downturn worsens, one of the primary motivators will be the need to maximise profitable conversions.
Here are a few of the major trends we can expect to accelerate:
Greater investment in experiences that support customer loyalty, retention and VIP programmes
As the economic slump kicks in, we’re already starting to see retailers prioritising efforts on increasing customer loyalty, retention and repeat purchases. Using AI and machine learning to segment shoppers based on predicted customer lifetime value, they will build dedicated experiences for their most valuable and loyal customers. There is a growing emphasis on custom experiences delivered via VIP programmes with retailers’ most loyal customers beingautomatically recognised and shown dedicated content (early access to sales, exclusive launches, limited run products runs and so on).
Aligning with shoppers’ values
It’s now more important than ever that retailers are able to identify and align with customers’ values as these remain an important factor in purchase decisions, with shoppers increasingly comparing offerings from different merchants. Many brands are becoming better at using behavioural data to identify when shoppers have an affinity to specific social causes, for instance—whether that’s shopping sustainably, buying organic or supporting certain charities. Once this is recognised, shoppers are automatically shown relevant products or content or can self-select using socially-conscious filters to customise their experience according to their values. We are seeing retail brands offering a list of causes and allowing shoppers to choose the ones they want to support. And increasingly socially conscious badging is being used to show shoppers how much difference their actions will make to a specific cause (how much will be donated or how many trees will be planted if I buy this product).
Expanded use of visual UGC to drive conversions and cost savings
Visual user-generated content (UGC) is set to become more accessible and noticeable, appearing on more parts of the website and more channels, featuring widely on the home page, within personalised product recommendations, in ads, paid and organic social and in email campaigns. In addition to increasing conversion rates by giving potential consumers the reassurance and confidence to go through with purchases, there’s evidence that return rates will decrease if customers can see how clothing fits “real” people rather than just models. And one of the biggest factors that is driving up use of visual UGC is the potential savings it delivers in content production: the more retailers are able to use customer generated imagery, the less they need to spend on expensive professional photography.
Increased emphasis on dynamic ranking and merchandising
The pressure to maximise profitable conversions will encourage merchants to more closely track behavioural data around how products are performing and adjust how high they rank within search results (and how visible they are to shoppers). Every product will need to fight for its space – not too dissimilar to the way in which online marketplaces operate. Any item that can’t stand on its own, will become less visible. But by using personalisation and segmentation, merchants will still try to ensure that less visible products are recommended to those that show a strong affinity and are therefore more likely to convert on them
More editorialising and branding on category pages
Most ecommerce marketing revolves around channelling traffic directly to category or landing pages, meaning if visitors aren’t tempted by anything they see there, they’ll frequently leave without ever exploring the brand, product or promotional messaging on the homepage or elsewhere. In an effort to address this missed opportunity, ecommerce businesses are beginning to add more individualised editorial to category pages to market the brand and push information about sales, discounts, and wider inventory. The aim is to maximise the potential of every visit, lower bounce rates and encourage visitors to browse more thoroughly to drive more conversions. As a result, category pages will no longer consist of row upon row of products.
Upselling through more advanced ‘Outfitting’ / ‘Shop-the-Look’
To increase average basket size, merchants are developing new ways to identify and showcase complementary and related products, especially in sectors such as fashion and home goods. The traditional ‘shop the look’ recommendations we’ve become accustomed to seeing are based on behavioural signals such as: “most shoppers who purchased this winter coat, go on to buy this scarf or these boots”. This is now evolving into Outfitting which usesvisual AI technology to analyse the images that shoppers are browsing—such as the outfits and accessories the models are wearing—to create bespoke collages of visually similar (or contrasting) complementary products. All the items shown are pulled on-the-fly from retailers’ in-stock inventory and filtered to match the size and fit of individual shoppers.
As an overarching trend across ecommerce, retailers are becoming more scientific and KPI-driven, as they try to reduce waste and increase efficiency. A/B testing will be used more widely for everything from new ad channels to campaigns and banners and messaging around sustainability or other initiatives. At the same time, brands are becoming less patient and more brutal on non-performing elements. Over the next year or so, every marketing tactic or strategy will have to prove its value faster with less time for experimentation.
Jan Soerensen is General Manager North America at Nosto