Trying to understand your customers is more difficult than trying to understand a member of the opposite sex. Their actions don’t always seem logical and it can be hard to know where to put your time and resources. But thankfully, there are some common characteristics and habits that will help bring some clarity to the issue.
Understanding Your Customers’ Online Shopping Habits
According to a fairly recent study of more than 1,000 U.S. consumers, the ecommerce industry is booming – and will continue to grow at a staggering rate over the next five to ten years. Specifically, the results from the Bigcommerce study show that 96 percent of Americans are classified as “online shoppers.” They spend an average of five hours per week shopping online and allocate an impressive 36 percent of their shopping budgets to ecommerce.
Just how important is online shopping? The average consumer ranks online shopping ahead of both smartphone GPS and streaming media as a basic essential they couldn’t live without. Four out of five customers make online purchases at least once per month, while 30 percent do so on a weekly basis.
“Shoppers are dedicating more of their time and budget to online shopping, and the frequency and number of online stores they purchase from has grown exponentially during the past few years,” says Troy Cox, senior product director at Bigcommerce. “With e-commerce now such a prevalent part of America’s buying habits, retailers have an incredible opportunity to reach more customers by opening their business to new channels.”
When you narrow your focus and look at millennials, in particular, it becomes even clearer that online shopping is the present and the future. Roughly 48 percent of millennials spend half of their shopping budget online, while 67 percent prefer to “search and purchase” on an ecommerce site rather than in-store.
Clearly, online shopping is something that all business owners and marketers need to be focused on. Whether you already have a thriving ecommerce presence or are barely dipping your toes in the water, it’s imperative that you understand how people shop online. Let’s check out some of the biggest habits and trends to give you a better idea of what’s actually happening when customers interact with you.
1. Comparison Shopping is a Big Deal
One of the single biggest trends in online shopping is comparison shopping. While people have always looked around for good deals – one study says that 79 percent of customers consider themselves bargain shoppers – the internet has made it easier and more convenient. Finding the best possible price is as easy as running a Google search or using a price search engine.
Comparison shopping is particularly important in industries where the average price per item is high and there’s lots of competition. The fine jewelry industry is one such example. As industry leader Diamondere acknowledges, “Price is one of the prime factors when buying jewelry.”
In order to account for lots of comparison shopping, Diamondere – and other companies in crowded industries – have to focus on adding perceived value to their products. This often comes in the form of customer service, branding, and add-ons.
2. Online Shoppers Like to be Comfortable
Part of the reason people love online shopping so much is that it’s easy and convenient. You don’t have to put on makeup, find your keys, drive to the store, fight for a parking spot, brave the cold weather, locate the item you want, and wait in line at the register. Online shopping happens from wherever you are.
According to the Bigcommerce study, 43 percent of online shoppers have made purchases while in bed. Approximately 10 percent of shoppers admit to buying something online after consuming alcohol. This speaks to the ease of the online shopping process. If you want to reach customers, you have to capitalize on their ability to feel comfortable.
3. Genuine Reviews Matter a Great Deal
You know that online reviews matter. When you shop for something, one of the first things you do is scour the internet for a review. But it’s not necessarily the number of reviews that matter to your customers. They’re much more interested in the quality. In fact, there’s research to suggest that negative reviews can actually have a positive impact on sales.
In most cases, negative reviews are seen as a nuisance – but this isn’t always the case. “When an established brand is at stake—or in a product category, such as cars, where advertising budgets and pre-review awareness are generally high—it’s smart to make an effort to limit bad press,” marketing professor Jonah Berger admits. “But if the negative publicity seems likely to increase brand awareness, smaller or unknown brands would often do better to let it go.”
You obviously don’t want a ton of bad reviews, but when they make up just a fraction of your total review count, they actually help your brand appear more credible. The notion is that negative reviews show your customers are critical thinkers and aren’t posting generic reviews as a favor to the company.
4. Millennials Love Loyalty Programs
The ironic thing about millennial shoppers is that they aren’t brand loyal, yet they love loyalty programs. Most customers will hop from one competitor to the next, so long as they can find a better price. But if you stand any chance of getting a repeat purchase from them, you probably need a loyalty program.
According to one study, 69 percent of millennial shoppers belong to a retail loyalty program, while 70 percent are happy with the programs. If you can find a way to develop a good loyalty program, you’ll be more likely to keep your customers focused and have a reason to reengage them in the future.
5. UX Directly Influences Conversion Rates
Just as a brick and mortar’s in-store experience impacts whether or not customers make a purchase, your ecommerce website’s user experience has a significant impact on conversion rates.
As much time as you spend on R&D for products and services, you need to be spending just as much energy on tweaking and optimizing your ecommerce pages. The more you reduce friction and make the experience seamless for the end user, the higher your conversion rate will be.
Stop Moving Against the Grain
A lot of ecommerce entrepreneurs have what we’ll call the Steve Jobs Syndrome. As Steve Jobs used to say, customers don’t know what they want until you show them. The problem with this quote is that, while Jobs was savvy enough to actually back this statement up, most people aren’t.
Your customers do know what they want and you can’t afford to move against the grain. Respect the online shopping habits of your customers and they’ll feed your bottom line.