New behavioral challenges for e-commerce players


The e-commerce business has grown tremendously during the covid pandemic. Two industry reports, The State of Ecommerce 2021, a study by Catalyst and Kantar, and Commerce Stats & Trends Report 2021 by SalesCycle provide interesting insights into e-commerce and also focus on some of its significant challenges.

In 2020, global online retail sales reached over $3.9 trillion worldwide, an increase of 10.2% over 2019. The most notable recent trend in the world of retail electronics is perhaps the unprecedented use of mobile devices. In Q3 2020, smartphones accounted for more than half of global website traffic. The disparity between desktop and mobile traffic worldwide is more than doubled in favor of mobile in all countries except those in North America.

Although mobile traffic to e-commerce sites is very high, the actual sales made there are lower than those through network access from a desktop computer. This low conversation rate via the smartphone is worrying. The nature of the interaction a person has with their smartphone is quite different from the way they interact with a desktop computer. The smartphone is always with you, you interact with it very frequently, but these interactions are very short-lived. To improve the conversation rate of e-commerce via handsets, marketers need to develop a deep understanding of an individual’s relationship with this gadget. This knowledge should be the basis on which appropriate persuasive stimuli are developed for smartphone users.

Studies show that shoppers are more likely to buy online on Wednesdays, Thursdays and Fridays. Saturday saw the biggest drop in online sales volume. This idea is consistent with some of the previous studies showing that e-commerce is a “middle-of-the-road” activity. Unlike physical shopping, the idea that online shopping is a low-effort activity has a significant impact on the type of stimuli created for e-com. During those short in-between moments, for example, the client is not in the mood to absorb too much information. Communication of a more visual nature, with less cognitive load, would therefore be ideal.

According to the Sales Cycle Report, 43.8% of people visiting an e-commerce site make the effort to visit product detail pages. This is surely a sign that these buyers have some interest in buying this product. 14.5% of total visitors take another important step in their shopping journey and add the product to their cart. But only 3.3% of e-commerce site visitors complete a purchase transaction. These data on the dropout rate are quite surprising. These are customers who added items to their cart but did not continue to purchase them. An 84% drop rate for jewelry is understandable as these are infrequent and expensive purchases. But abandonment rates of 61% for groceries and 72% for pharmaceuticals are surprising since these are mostly essential items.

Today, with the massive developments in search engine optimization and data analytics capabilities, the focus is on targeting the right buyer. But high abandonment rates indicate that the real challenge of e-commerce is not initiating browsing behavior, nor in managing search behavior. The real business challenge starts where the shopper adds a product to their cart.

To alleviate the abandonment problem, we need to know the “why” of this behavior. One explanation is that researching a product online is much like window shopping in the physical world. But in the digital world, you can also add the desired product to your shopping cart, a “reward experience” close to the actual purchase of the product. Another explanation is that while putting a product in a physical shopping cart is an indication of purchase intent in a regular supermarket, adding something to a shopping cart in the e-commerce world does not indicate the same. Instead, adding to an online cart is a way to compare a few nearby options before the final buying decision is made.

The most effective mediums to solve the abandonment problem are product thumbnails and product display pages. These are available closest to the drop off point. But, unfortunately, while millions of dollars are spent on the brand’s website and a lot of thought goes into developing TV commercials and other promotions for the brand, very little importance is given to the design. product thumbnails and product display pages. Even the basic lessons of persuasive communication seem to be overlooked in their design.

Much more thought needs to be put into designing persuasive product thumbnails and display pages. What is the predominant emotion at the time of purchase? Do stimuli like reviews work for categories like toothpaste that people have been buying for decades? Is the final price the best persuasive stimuli, or is the perception of a significant price drop more convincing? Will a product’s climate sustainability credentials be the ideal boost to seal the buying decision? We need to find answers to many questions before we can design a truly compelling product thumbnail or product display page.

The truth is, no one has really understood the last mile allure of the e-commerce business. Even for many companies that have been around for a long time, it’s still day one on this score. The game is to identify small incremental changes that, as they accumulate over time, could accelerate the growth rate of the business. It is about seeking progress rather than perfection.

Biju Dominic is Chief Evangelist, Fractal Analytics and President, FinalMile Consulting

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