Digital Experience
June 14, 2021

Online Consumer Behavior Evolves, So How Are People Shopping Online in 2021?

The relentless rise of omnichannel retail continues to reshape consumer behavior in fashion and e-commerce as a whole. Currently, 33% of retail sales in the United States are through e-commerce, with even more customers lured online since the pandemic. Not all companies are equipped to handle the influx, however. Retailers need to invest in new skills, new technology and new processes to compete. This also requires a bolder approach to personalization and product data. With the incumbent strategy falling short of consumer needs, here’s what retailers must do to respond to online consumer behavior in 2021.

Digital Experience
May 13, 2021

Online Consumer Behavior Evolves, So How Are People Shopping Online in 2021?

The relentless rise of omnichannel retail continues to reshape consumer behavior in fashion and e-commerce as a whole. Currently, 33% of retail sales in the United States are through e-commerce, with even more customers lured online since the pandemic. Not all companies are equipped to handle the influx, however. Retailers need to invest in new skills, new technology and new processes to compete. This also requires a bolder approach to personalization and product data. With the incumbent strategy falling short of consumer needs, here’s what retailers must do to respond to online consumer behavior in 2021.

The Key Online Shopping Behavior and Trends

The momentum toward online shopping was already steady, but the pandemic turbocharged the switch to digital at both ends of the retail scale. As e-commerce sales grew by 30% in 2020, flagship brick-and-mortar stores have had to invest in their online experience, and a surge of new entrepreneurs have entered the market. There were 1.5 million new business applications in the United States in 2020, many of them solo start-ups in retail and fashion. Overall, that paints a rosy picture for e-commerce, with global revenues estimated to hit $6.54 trillion by 2022. Building an online presence is not a guarantee of success, however. The strategies that work well in-store aren’t the ones that will make your e-commerce efforts soar; you must find new ways to connect with your customers.

What Consumers Want in 2021

  • Hyper-personalized online experiences
  • Contextually relevant information based on behavioral insights
  • An emotional bond in a fragmented world
  • Freedom of expression — platforms must recognize that no two customers have the same perception of the same product in relation to color, textile, fit and so on 

Innovation is key, and with the right platform it is achievable. According to a recent McKinsey report, the fashion industry in particular has used the pandemic to “reshape their business models, streamline their operations and sharpen their customer propositions.” Those that succeed will acknowledge the following trends.

The Importance of the Brand Website in an Omnichannel Environment

The conventional approach for brands, although now obsolete, has been to launch a “set and forget” website focused on championing products and brand history. It’s not working. Across all sectors, 88% of online orders are abandoned before purchase, rising to 90% in fashion. Retailers cannot expect a single website to accomplish lead generation, conversion and community building, unless it is powered by smart customer data and analytics to offer a dynamic, personalized experience. Here’s what a brand website needs to offer in 2021:

The Hub of an Omnichannel Platform

  • Granular and consumer-centric product attribute data to build the foundation for a relevant and personalized digital product discovery experience
  • Integrated data collection using a sophisticated algorithm to build up a complete historical and real-time profile of each customer’s behavior
  • Applying that deep customer data to provide intelligent search features that leverage product and customer context 

Personalization Across Multiple Touch Points

While studies have shown that it takes anything from five to 20 touch points to convert a sale, there is one figure that’s more relevant: 32% of consumers will quit a favorite brand after just one negative interaction. Too many retailers wildy overestimate brand loyalty, but even without a negative experience, the cold fact is that 75% of customers do not purchase from the same store again. 

The established trend is for shoppers to use multiple channels during their journey. The challenge for retailers is to deliver a consistent experience across all of them and secure end-to-end visibility of customer data at each touch point to allow for better personalization. Quite simply, customers engage more with brands that offer personalization. Bearing in mind that online sellers will spend $7.3 billion on AI by 2022, here’s the standard to set for tomorrow:

Making Business Personal 

  • Deploying advanced personalization using AI can give a 25% lift in revenue. Don’t settle for manual tagging when you can use machine learning and predictive analytics to drill down on each unique customer profile. As a benchmark, Lily AI uses more than 15,000 tags in our algorithm. 
  • Unlock augmented reality and 3-D. 35% of people would shop online more if they had the ability to try items on virtually.

Mobile, Mobile, Mobile

It’s impossible to over-stress the importance of a mobile-first approach. Mobile shopping will account for 73% of all e-commerce sales in 2021, making it essential to have a dynamic, responsive platform that loads fast and offers frictionless checkout. It also means offering more ways to pay, particularly through saved card details or unique IDs. Some 37% of customers abandon a purchase because of the need to create an account, while 20% do so because the site crashes. Again, the benefit of hosting a native app or mobile-friendly site is the opportunity to collect a steady stream of valuable customer data to enhance personalization. 

Community Matters

Referrals and rewards are powerful pillars for maximizing customer lifetime value. Building and nurturing a community is crucial to meet online shopping habits in 2021. Again, the goal is to enhance the customer’s experience through meaningful connections. Here’s how:

Building a Tribe

  • Promote user-generated content for lead generation, particularly video.
  • Deploy chat bots to handle routine inquiries, ideally using machine learning to go beyond generic answers to specific questions
  • Encourage customers to become ambassadors, giving them the tools they need to promote and share your products with their own communities 

Greater Demands on Delivery

The last mile of delivery is another touch point that can translate into valuable benefits. The reality is that today’s shopper expects free, fast delivery, whether same-day or within two days. But that’s not all. By providing personalized fulfillment options — spanning click and collect, home delivery and “dark stores” — brands can go further in delighting customers and encouraging them to share positive experiences. In 2021, unboxing is a key part of the shopping experience, so fashion brands in particular should move to customized packaging that is consistent with online branding. That way, when customers share their purchases online, they’re sharing not just the product but your brand too. 

How Lily AI Helps You Personalize Experiences Based on Consumer Behavior

Too many brands still assume that they have personalization covered because they’ve added a first name to an email subject line or retargeted on social media for an abandoned cart item. Take it a step further and dive into emotional context. The Lily AI algorithm builds psychographic profiles for each visitor to help you deliver authentic personalization. Using enriched product-data, our technology empowers your brand to serve relevant content to each shopper at the right time. For 2021 and beyond, that is the benchmark for online shopping.