In 2002, ecommerce consumers spent about $42 billion in the United States. For a brand new industry like e-retail, that figure seemed huge. Fast forward 16 years, and the numbers seem almost impossibly large. In 2018, online consumers spent over $500 billion. That’s higher than the total GDP of many countries. But in the midst of this boom, ecommerce has produced both winners and losers. While sites like Amazon and eBay have thrived, some smaller e-retailers have suffered disastrous losses. To keep you up to speed, UpSellit has compiled three of the most important, data-backed trends to watch out for in 2019.
Mobile is Only Becoming More Important
Several years ago, mobile shopping was largely seen as a novelty. Some sites offered device compatibility, but most did not. Mobile customers were mostly thought of as digital window shoppers; good for traffic, meaningless to sales.
That is no longer the case. In 2017, over 1/3 of online purchases occurred on a mobile device. In 2018, this went up even further. On Black Friday, about 40% of ecommerce purchases occurred via mobile devices. Projections hold that over half of all e-retail transactions will occur on a phone or tablet within the next three years.
Practically speaking, this information means that optimizing for mobile should be among every site’s top priorities. On a technical level, sites should be testing their website to ensure smooth transitions from homepage to checkout. In terms of copy, short and highly specific product descriptions are key. Using fewer on-entry strategies is important as well, as these are more difficult to close out of on mobile devices, and can drive consumers away.
One tried and true strategy is to ask trusted individuals – whether they’re employees or a paid focus group, to test your mobile website. Their honest feedback can often help you discover problems you never knew your website had. Although things may appear perfect on paper, minor inconveniences can make or break conversions, especially on mobile. 84% of consumers report that they’ve had problems shopping on their mobile device. Don’t let your site lose business by being part of the problem.
Return Issues are Coming to a Head
A lenient return policy has traditionally been a hallmark of good customer service. In the e-retail sphere, this has been particularly important, since customers can’t physically experience items before buying. However, in the past few years, trends have developed that have proved extremely costly to ecommerce.
In traditional retail stores, return rates are almost always under 10%. Several studies have found that these rates hover between 7% and 9%. Ecommerce sites, on the other hand, experience return rates of between 20%-30%, with some estimates ranging even higher. Further adding to the difficulty is the added complication of processing a return order. Whereas returning an item in a traditional store is fairly straightforward, online returns require great coordination. Shipping the items costs money; if the item shipped for free, that investment is essentially wasted. In addition, nearly half of companies will pay for return shipping, meaning those who don’t are largely seen as “restrictive” in their return policies. Paying for multiple rounds of shipping is costing ecommerce hugely- so what can be done about it?
The first step to remedying the situation is to avoid blaming the consumers. While there are a few who will abuse return policies, the vast majority of customers return items for legitimate reasons. That being said, if serial returners are a problem for you, implementing a generous but reasonable per-month limit on free returns can help customers shop more intelligently.
While some do abuse the system, research shows that the vast majority of returns are legitimate. One of the largest drivers of returns is poorly described items. Remember, the customer is ordering something she has never seen in person, so photos must be well lit, accurate, and shot from multiple angles. It’s also vital to ensure that you are not using an overly extreme filter for the pictures; save the effects for instagram. In addition, accurate copy is more important than ever. Every product page should also include an exact list of what does (and does not) come in the package. For electronics with a charger or batteries, clarify whether or not these are included. For clothing, ensure that sizes are correct and consistent across the site.
The Rise of Ethical Ecommerce
For 2019, experts have predicted a major population shift. For the first time ever, there will be more millennials than baby boomers in the population. This is largely good news for ecommerce. 67% of millennials prefer shopping online to shopping in physical stores. This is the case for only 41% of boomers. Although the number of baby boomers has been declining for years, 2019 is poised to be the first year where boomers are outnumbered by any other generational group.
While the millennial transition is likely to be good for the industry, it also presents its fair share of challenges. According to many studies, millennials hold significantly different values than the formerly dominant boomer generation. Boomers, whose parents lived through great depression, have tended to put more emphasis on economic well-being than social issues. Millennials, on the other hand, have consistently demonstrated a willingness to pay more for products they view as “high quality,” “artisanal,” and “ethical.” A Nielsen study found that 73% of millennials are willing to pay more for an ethically sourced product. Furthermore, more than 4 out of 5 millennials expect companies to make public declarations of corporate citizenship. So what does this mean for ecommerce?
Let me be clear; this does not mean your company needs to start tweeting “hot takes” on major social issues. Rather, in the coming months (and years), it’s going to become more important to demonstrate social responsibility. Millennials are interested in how your company works to promote positive cultural changes. This could be through use of recyclable packaging, ethically sourcing materials, or taking on philanthropic efforts. Simply emphasizing a couple of ways your company gives back can make a world of difference to younger consumers. If nothing is leaping to mind, something as simple as a charitable donation to worthy cause can make a huge impact on your brand’s image and perception by “socially conscious” consumers.
In addition to a good deed being its own reward, demonstrating a commitment to social responsibility can pay big dividends. Demonstrating a desire to give back sets you apart from other brands, and allows for excellent PR and advertising opportunities. Plus, as the buying power of millennials continues to rise, you’ll be ahead of the curve.
Just as ecommerce presents unique opportunities for growth, it also present unique challenges. The e-retail landscape is constantly changing, so understanding what customers want from a digital brand is a vital aspect of success in the industry. By adapting to the changing needs of customers, individual brands can thrive along with the industry overall for years to come.