Why online shopping needs to get personal

Prior to the COVID-19 global health crisis, the online shopping landscape was becoming a very crowded and competitive place. 

Now, ecommerce saturation is experiencing a new peak: we can see that in 17 markets, 36% of those who weren’t shopping online before the crisis now report doing so.

Amid panic-buying and stockpiling of goods, with retailers forced to shut physical stores – shifting their focus to online trade exclusively – there’s an even greater dependence on online stores.  

But, as ecommerce capabilities have become more sophisticated over time, so too have consumers’ expectations.

According to our ongoing research, 31% of consumers want brands to offer customized or personalized products.

Consumers are far less willing to accept a blanket approach to messaging too. Therefore, brands who strive to provide a more personal online shopping experience are the best equipped to withstand the competition. 

Here, we delve into why segmentation and attitudinal data are the first steps to implementing personalized tactics – and how to go about it.

The current online shopping landscape, as shaped by COVID-19.

It’s too early in the pandemic to be making absolute statements about what the world and consumer behaviors will look like once the outbreak passes, but we can provide a summary of the online shopping landscape at present.

Across 17 markets, almost 1 in 2 are doing more online shopping amid the coronavirus outbreak.

Consumers’ existing shopping habits factor into this: close to 50% of those who were visiting Amazon or eBay before the outbreak report increases in online shopping. 

In the custom coronavirus-focused survey we fielded across 17 markets from March 31- April 2, the prevalence of consumers engaging in any form of online shopping is high.

Millennials are the most likely to say they’ve been shopping online more because of the outbreak, with 51% reportedly doing so.

In terms of what specifically each demographic is going online more to buy, millennials lead for increased shopping of virtually all the categories we track. 

By gender, men lead for the purchasing of alcohol and home appliances online, whereas women are ahead for beauty/cosmetics products. 

When we look at online shopping behaviors by income, doing more online shopping is skewed towards those with a higher income (32%) versus those with a lower income (18%).

Among those who report shopping online more, there’s a clear focus on essentials, with food/grocery products, household essentials and personal care products topping the list. 

They’re also going online more to purchase other retail categories we track: 

• 19% shop online more for clothes.
• 17% shop online more for entertainment items (books, films etc).
• 15% shop online more for cosmetics/beauty products. 

While purchasing essential items is front of mind for obvious reasons, our research shows consumers continue to purchase various different items online amid the outbreak. 

For independent record store Sister Ray, online sales were previously only a small part of their revenue. But the company has seen a slight spike in online orders being placed, presumably from customers doing what they can to support their favorite local businesses in these exceptional circumstances.  

This is good news for retailers across various industries, as it shows consumers’ appetite for purchasing non-essential goods hasn’t diminished.

Our data clearly reflects this – 60% of internet users across the 17 countries approve of brands selling non-essential items via their websites.

Why personalization is an advantage for any retailer.

Personalization is profitable.

In ecommerce, personalization is about harnessing the power of consumer data to provide tailored experiences to online shoppers. 

The end goal is to provide an experience that appeals to individuals based on their needs, priorities and preferences. In other words, incentivizing customers by presenting an offer too good to resist. 

Hence, personalization is fundamental to attracting, acquiring, and encouraging customers to make a purchase. 

Our research shows: 

• 16% discover brands via personalized purchase recommendations on websites.
• 50% tend to opt for personalized loyalty rewards from brands.
• 24% would be most motivated to promote a brand online when something is relevant to their own interests.
• Even among ad-blockers, relatively few block ads to avoid personalized marketing; it’s actually the least cited reason for doing so.

Customer segmentation is the gateway to personalization. 

Consumers spend around 6 ¾ hours online per day, spread equally across mobiles and PCs/laptops. While online, consumers average 2 ½ hours minutes per day on social channels.

Though the opportunity to reach different audiences is growing, especially in the online space, 

there’s no doubt consumers are becoming increasingly more savvy. Their rejection of blanket advertising isn’t new (it’s a contributing factor in why 48% used ad-blockers in the past month), but – more recently – our research tells us consumers expect: 

• More tailored content.
• Seamless purchase journeys.
• A one-to-one relationship with the brands they favor.

Thankfully, personalized marketing can help retailers overcome these challenges.

As for knowing where these opportunities for providing personalization are, these clues are discoverable during segmentation – a process all modern businesses should be investing in. 

Whether starting broad, or diving down into the most complex segments you can think of, segmentation is a crucial means of organizing like-minded individuals who share attributes. 

Each consumer segment (or ‘group’) warrants its own personalized approach, determined by the tastes, needs and motivations of those within it. 

The goal of segmentation is to meet your customers where they’re at.

In practice, this means providing a tailored end-to-end ecommerce shopping experience at every touchpoint. 

By undergoing segmentation, brands can uncover new opportunities to strengthen their relationship with consumers – and help them stand out from the rest. 

Demographic segmentation however, won’t cut it. Though simple to define, it’s almost impossible to change or influence behaviors through advertising based on demographic segmentation alone. Consumers are simply much more complex than their age, income or location. 

Neither will behavioral segmentation. It’s possible to change or influence behaviors through advertising based on behavioral segmentation, but only to a certain extent. Rather than just observe their actions, ecommerce marketers need to know why consumers do things, as this is key to reaching them on an emotional level.

This is where attitudinal segmentation comes in. In this instance, segmenting attitudinally will help marketers uncover in detail what customers value most in an online shopping experience. 

Consequently, these insights:

• Show which ecommerce personalization features are priority for each audience segment (personalizing the homepage and navigation, or re-targeting consumers before or after they’ve left your ecommerce website, for example).
• Will inspire your approach to messaging and advertising to be as tailored as possible.

As an example of how this theory works in action, our coronavirus research tells us 10% of consumers cite shopping online more during the outbreak to ‘treat’ themselves. Though this audience can be further segmented by attitudinal, behavioral and demographic traits, marketers already know that reinforcing the sentiment of ‘rewarding or treating yourself’ at key touchpoints in the path to purchase is likely to appeal. 

Online retailers need to adapt with their audience, not trail behind.

Despite increased competition and an overly saturated market, profiting in the online retail space ultimately boils down to being in tune with your audience. 

Segmenting attitudinally allows you to tap into the things your customers care about and amplify these exact factors through the functionality of your website and in your messaging.